Employment Rights Bill is ambitious project of reform, covering 28 areas of employment law
However, businesses are to be given significant time to input via consultation on the details and to prepare before implementation of key reforms
Most changes likely to come into force until 2026, and unfair dismissal reform will be no sooner than autumn 2026
Government hasn’t budgeted extra funding for tribunal system that may be overwhelmed by surge in employment litigation
Employment tribunals already straining at the seams
Comments from Ben Smtih (Senior Associate) and Stephanie Compson (Professional Support Lawyer) at GQ|Littler, the leading specialist employment law firm.
“For most employers the scale of the employment law changes will take some time to sink in. Now that the Employment Rights Bill has been introduced into Parliament, its clearer what a daunting task employers will face.”
“But much of the detail is still to come. This is both blessing and curse: employers will have the opportunity to consult with the government on the detail such as the length of probation periods, but will have to wait longer until they are able to prepare for the detail of reforms!”
“However, the Bill is a really ambitious programme of reform and if the detail isn’t altered fundamentally in consultation, employers will have to radically overhaul internal management processes, retrain managers and face an increase in tribunal claims. The costs and time involved should not be underestimated.”
Unfair dismissal, probation period and Day 1 rights
“In a last-minute concession to businesses it looks like the government’s position is that employers should now be able to keep new recruits on probation for up to nine months. This will be welcomed by employers as it will allow them more time to evaluate to new hires. However, there is likely to be some backlash from trade unions who will see the reversal as undermining Labour’s original promise of day one rights for all employees. This is a detail that will be subject to consultation, so while we know the government’s preferred position, that is not necessarily what the law will be.
“Nine months feels like a pretty significant concession to business and in practice probation periods this long are unusual. However, a balance has to be made between employers being fearful of hiring (if a probationary period is shorter) and not being so long as to undermine the policy objective of introducing day one rights.”
“Another point for consultation is what is required to dismiss during probation. But Labour has been fairly clear that probation is not a free pass to dismiss, unfair dismissal still kicks in at day 1. Certainly, if today’s announcements are anything to go by, employers may be relieved that there may be some lighter form of fair process required in respect of such probationary period.”
“In addition, it is interesting that there is a recognition on the impact this might have on tribunal compensation – as the government has said it also intends to consult on what a compensation regime for successful claims during the probation period will be, with consideration given to tribunals not being able to award the full compensatory damages currently available.”
New single enforcement body
“The proposed ‘Fair Work Agency’ introduces a potentially unwelcome level of extra regulatory burden for businesses.”
“The proposed agency is ambitious and could result in a much more proactive enforcement regime that employers will have to deal with.”
“Agency officers will have the power to inspect companies they believe are breaching current and new employment legislations and enforce penalties for employers that aren’t compliant.”
“Rumours suggest that the timeline is for the new enforcement body to be in place by autumn 2026 giving businesses some time to prepare. However, for that timeline to be realised the enforcement body will need funding set aside. The Government have yet to set out any spending commitments here so employers may enjoy an extended timeframe to adapt.”
Employment tribunals already straining at the seams – an additional surge in employment disputes will put tribunal system under unbearable strain
“The Government needs to supply proper additional funding to help the tribunals cope with the likely surge in litigation, but currently there are no proposals for this.”
“Employers and employees are already having to wait years to have employment disputes resolved – that’s just not fair on either party.”
“The last time the Employment Tribunals published data for this – it was 49 weeks just to get a preliminary hearing. They have more recently told us that their systems are now in such a state that they can no longer provide this information on the backlog.”
“The employment tribunals currently have an enormous backlog of cases – changes in the Employment Rights Bill will only worsen the backlog without additional funding to the Tribunal.”
“Making unfair dismissal a “day 1” right, even with probation periods permitted, is likely going to result in a big surge in claims. But other reforms Labour include in the Bill will also feed into this increase in cases, from the expansion of the right to request flexible working, the right to switch off to the reforms of collective bargaining.”
“A longer term ambition, though, not included in the Bill, is that the Government wishes to consult with Acas on enabling employees to collectively raise grievances about conduct in their place of work. This would be a huge shift from the current position of employees raising individual grievances against their own employers. This may alleviate the strain on tribunals if implemented in the long run, but will depend upon Acas resources, funding and the detail of how this would operate. It also seems a much longer way down the track.”
Working from home and expanded right to request flexible working
“While many employers already have flexible working policies, this change will probably cause increased demands for flexible working and employers may struggle to keep employees happy.”
“The enhanced right to request flexible working may also make the ‘return to work’ policies that many bigger employers have been introducing far more difficult to enforce.”
“The Bill includes an expanded and enhanced right to request flexible working, with employees still able to request flexible working from day one and employers facing a higher hurdle to refuse those requests because employers will not only have to have a statutory reason for refusing the request but it must be reasonable for the employer to refuse the request on that ground. Though this does create statutory right to work from home (albeit that WFH can be a flexible working arrangement that could be requested).”
“What isn’t included in the Bill is the proposed introduction of the Right to Switch Off. However, the Government has indicated that this hasn’t fallen from the agenda and this policy will be delivered through a statutory code of practice alongside the Bill’s passage. The aim of this right will be to prevent employees from being contacted out of hours, except in exceptional circumstances, to allow them the rest and get the recuperation they need to give 100%.”
5. Harassment
“Some potentially significant inclusions in the Bill include amending the new duty on employers to prevent sexual harassment coming into force later this month from the duty to take “reasonable steps” to prevent sexual harassment to “all reasonable steps”. This is a much higher hurdle for employers to demonstrate. In addition, the Bill proposes the introduction of third party harassment, a concept that would be tricky for employers to manage in practice which is why it was dropped during the passage of the Worker Protection (Amendment of Equality Act 2010) Act 2023.”
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