The Employment Rights Bill seeks to bring about seismic change to the employment law landscape, requiring employers to adapt their current practices and policies.

Published  31 January 2025

Author  Antonia Blackwell

Our latest webinar focused on the common questions we are seeing in relation to the draft Bill and how the changes proposed by the Bill will operate in practice. The most frequently asked questions are highlighted below:

Overview

• The Bill was introduced into Parliament on 10 October 2024 and marks the first phase of the government delivering the Plan to Make Work Pay.
• The Bill brings forward 28 employment law reforms although most of the changes will not come into force straight away and some require further Regulations or Codes of Practice to set out the detail.
• Amendments to the initial draft of the Bill have been proposed, the most notable of which is the proposed increase to the time limit for bringing employment tribunal claims from 3 to 6 months.

Frequently asked questions

How will probationary periods work under the Bill?

• Alongside the removal of the two-year qualifying period for unfair dismissal claims from Autumn 2026, the Bill introduces an initial period of employment (suggested 9 months) during which a modified process will be required to ensure fairness where the reason for dismissal is related to the employee.

• Details of what steps the modified process will take are awaited, although suggestions are that it will include meeting with the employee to explain the concerns about their performance at which the employee would be entitled to be accompanied.

• The modified process would apply regardless of whether there is a probationary period clause set out in the employee’s contract of employment. However, it would be sensible to align contracts with the new process once the details are known.

Will it be possible to vary employment contracts when the new rules on fire and re-hire take effect?

• The Bill states that it will be automatically unfair to dismiss an employee in a fire and re-hire scenario unless dire financial circumstances or variation cannot be reasonably avoided.

• This will significantly increase the risk for employers looking to introduce contractual variations unless they can obtain agreement from employees to the change.

• As a result, the negotiations between employer and employees to achieve agreement to any changes will be critical.

Will it still be possible to use zero hours and low hours contracts?

• The Bill introduces requirements on an employer to make a guaranteed hours offer to a qualifying worker after the end of a set period (suggested 12 weeks).

• Qualifying workers are also to receive reasonable notice of cancellation of or change to a shift and compensation is to be paid to the worker where a shift is cancelled, moved or curtailed at short notice.

• The proposed rules place a heavy administrative burden on employers, particularly as the requirement to offer guaranteed hours will arise at the end of every set period until the worker is no longer regarded as a qualifying worker. The result could be that employers have to make multiple offers to a worker in any given year. The guarantee of hours could also increase costs for employers.

• This is likely to make the use of such contracts less appealing to employers. However, indications are that there will be exceptions made for genuinely temporary work, which may retain some flexibility for employers.

When will the changes take effect?

• Consultations on the various Regulations and Codes of Practice that will be needed to bring the provisions into force have been promised and, in fact, consultation on some areas has already started.

• It is therefore likely that the majority of reforms will take effect no earlier than 2026.

• Once in force, employers may have to make changes to the way they recruit, contract with and manage their workforce.