Quick Answer: What You Need to Know About the Employment Rights Bill

The Employment Rights Bill represents the most significant overhaul of UK employment law in 50 years. This landmark legislation will eliminate the two-year qualifying period for unfair dismissal protection and introduce day-one rights for sick pay and flexible working, fundamentally reshaping workplace protections for millions of British workers.

Key Changes Coming in 2026-2027:

• Enhanced unfair dismissal protection: Government proposes day-one rights with initial period protections
• Day-one statutory sick pay: Three-day waiting period eliminated with expanded eligibility
• Zero-hours contract restrictions: Guaranteed hours rights after regular work patterns
• Default flexible working:Employers must prove requests are “not reasonably feasible”
• Enhanced pregnancy protection: Extended safeguards against dismissal and redundancy

Introduction

If you’re employed in the UK, you’re about to witness the biggest shake-up in workers’ rights since the 1970s. The Employment Rights Bill, introduced to Parliament in October 2024, isn’t just tweaking existing laws – it’s fundamentally reimagining the relationship between employers and employees.

The Employment Rights Bill aims to end what ministers call “one-sided flexibility” in the UK job market. Instead of workers bearing all the risks of economic uncertainty, this legislation shifts the balance towards genuine security and predictability for employees.

These changes will roll out between 2026 and 2027, following extensive consultations currently underway. For UK workers, understanding these reforms now means you can better protect your interests and plan for significant improvements to your workplace rights.

The bill directly addresses longstanding issues that have left millions of workers vulnerable: the notorious two-year cliff edge for employment protection, inadequate sick pay provisions, exploitative zero-hours contracts, and barriers to flexible working arrangements.

Enhanced Protection Against Unfair Dismissal

The Current Two-Year Problem

Under existing law, you must work for the same employer for two full years before gaining protection against unfair dismissal. This “qualifying period” has left millions of workers effectively powerless during their first 24 months of employment.

The Employment Rights Bill seeks to change this dramatically, though the exact approach remains under parliamentary debate.

Government Proposals vs Lords Amendments

The government originally proposed complete elimination of the two-year waiting period with day-one protection. However, the House of Lords has amended this to a six-month qualifying period, creating a political debate about the final form.

Government’s Preferred Approach:

• Day-one unfair dismissal protection for all workers
• “Initial Period of Employment” lasting up to nine months
• Lighter-touch dismissal process during this period
• Lower compensation caps for claims during initial period

Lords’ Amendment:

• Six-month qualifying period before full protection
• Reduced administrative burden on employers
• Compromise between current system and government proposals

How Enhanced Protection Will Work

Regardless of the final parliamentary outcome, workers will gain significantly stronger protection than currently exists:

Immediate Benefits:

• Protection against discriminatory dismissal from day one
• Right to written reasons for dismissal
• Protection against dismissal for asserting statutory rights
• Enhanced tribunal compensation available

Procedural Requirements:

• Employers must follow fair processes even during probationary periods
• Redundancy dismissals require full fair procedure from day one
• Detailed justification requirements for any dismissal

Practical Impact for Workers

This change particularly benefits workers in sectors with high turnover rates – hospitality, retail, and construction – where employers have historically exploited the two-year rule.

Real-world example: Sarah, a retail assistant, experiences workplace bullying from day one. Under current law, she has limited recourse for nearly two years. With the Employment Rights Bill changes, she can file an employment tribunal claim much sooner while maintaining stronger job security.

Implementation Timeline

The unfair dismissal changes are expected to take effect in 2027, following further consultation on the specific procedures and compensation arrangements.

Revolutionary Sick Pay Changes from April 2026

Current Statutory Sick Pay Limitations

Britain’s Statutory Sick Pay (SSP) system currently fails millions of workers:

• Three-day waiting period: No pay for first three days of illness
• Minimum earnings threshold: Must earn £123 per week to qualify
• Fixed amount: Just £118.75 per week regardless of actual wages
• Exclusions: Part-time and low-paid workers often ineligible

Employment Rights Bill SSP Transformation

Starting April 2026, the Employment Rights Bill introduces comprehensive sick pay reform with confirmed details:

Day-One Sick Pay:

• Immediate payment from first day of illness
• No more three-day waiting period
• Applies to all employment contracts

Low-Earner Support (Confirmed at 80%):

• Minimum earnings threshold abolished completely
• Workers earning under £148 weekly receive 80% of wages
• Capped at current SSP rate of £118.75 per week
• Expanded eligibility for 1.3 million additional workers

Enhanced Weekly Rates:

• Low earners: 80% of weekly wages (capped at SSP rate)
• Standard earners: Maintain current £118.75 weekly rate
• Some workers earning just above current threshold may see slight reduction

SSP Calculation Examples (Confirmed Rates)

*However, removal of waiting days typically offsets any reduction for short-term absences.

This transformation particularly benefits part-time workers, care workers, and hospitality staff who’ve been systematically excluded from sick pay protection.

Image: H&CO

Cost Implications

Government analysis shows the total annual cost to employers will be approximately £1.07 billion, representing about £38 per employee per year across all businesses.

Zero-Hours Contract Restrictions and Guaranteed Hours

The Zero-Hours Problem

Zero-hours contracts create profound insecurity for 1.1 million UK workers. These arrangements prevent financial planning, make securing mortgages nearly impossible, and leave workers constantly uncertain about their income.

The Employment Rights Bill introduces two fundamental protections against zero-hours exploitation, expected to take effect in 2027.

Right to Guaranteed Hours from 2027

Automatic Qualification:

• After 12 weeks of regular work patterns
• Guarantee based on average hours worked
• Applies to agency workers through “end hirers”
• Cannot be waived by agreement

Calculation Method:

• Average weekly hours over qualifying period
• Excludes overtime and exceptional circumstances
• Minimum guarantee period of four weeks ahead
• Regular review and adjustment mechanisms

Reasonable Notice Requirements

Shift Changes:

• Minimum notice periods for schedule changes
• Compensation for cancelled shifts
• Premium payments for short-notice requirements
• Protection against retaliatory hour reductions

Practical Example: James works for a delivery company on zero-hours contracts. Over 12 weeks, he averages 28 hours weekly. Under the Employment Rights Bill, his employer must offer him a guaranteed 28-hour contract, providing income security while maintaining operational flexibility.

Agency Worker Protections

The Employment Rights Bill extends guaranteed hours protection to agency workers, with the “end hirer” (client company) bearing responsibility for providing work guarantees to regular temporary staff.

Flexible Working as a Default Right

Current Flexible Working Limitations

Since April 2024, UK workers can request flexible working from day one, but employers can easily refuse using eight broad statutory reasons. Many requests are denied without proper consideration or consultation.

Employment Rights Bill Flexible Working Revolution

The new legislation makes flexible working the default expectation rather than a special accommodation, with changes expected in 2026:

“Default Flexible” Approach:

• Employers must prove requests are “not reasonably feasible”
• Higher burden of proof on employers
• Mandatory consultation and alternative exploration
• Detailed justification requirements for refusals

Enhanced Consultation Process:

• Face-to-face discussion requirements
• Alternative arrangement obligations
• Trial period considerations
• Appeal mechanisms for refusals

Types of Flexible Working Protected

The Employment Rights Bill strengthens protection for all flexible working arrangements:

Time-based Flexibility:

• Flexitime: Variable start/finish times
• Compressed hours: Full-time hours in fewer days
• Part-time: Reduced overall hours
• Annualised hours: Flexible distribution across the year

Location-based Flexibility:

• Home working: Full or partial remote work
• Hybrid arrangements: Split home/office working
• Job sharing: Role division between multiple employees
• Term-time working: Work only during school terms

Implementation Timeline

The strengthened flexible working rights under the Employment Rights Bill come into effect in 2026, giving employers time to review policies and train managers on the new “reasonably feasible” test.

Image: Juan Encalada

Enhanced Pregnancy and Maternity Protection

Current Protection Gaps

While pregnant employees already enjoy significant protection, the Employment Rights Bill identifies crucial gaps in the current system, particularly around redundancy situations and return-to-work transitions.

Expanded Protection from 2027

Extended Redundancy Protection:

• Protection begins from pregnancy notification
• Continues for 18 months post-birth
• Mandatory alternative role offers where available
• Priority protection even if other candidates are better qualified

Automatic Unfair Dismissal:

• Pregnancy or maternity-related dismissal automatically unfair
• Day-one protection (no qualifying period)
• Enhanced compensation available
• Simplified tribunal procedures

Protected Period Timeline

Full Protection Coverage:

• From pregnancy announcement to employer
• Throughout maternity leave period
• Until 18 months after birth (or earlier return to work)
• Applies even without maternity leave entitlement

Enhanced Redundancy Process: During the protected period, employers must:

• Offer any suitable alternative roles before considering dismissal
• Provide enhanced consultation periods
• Offer retraining opportunities where feasible
• Demonstrate genuine redundancy necessity with documentary evidence

Fire and Rehire Practice Prohibition

Understanding “Fire and Rehire” Abuse

This controversial practice involves dismissing employees and immediately rehiring them on worse terms and conditions. While technically legal under current law, it’s been widely criticised as exploitative.

Employment Rights Bill Prohibitions

From October 2026, the Employment Rights Bill makes most fire and rehire practices automatically unfair dismissal:

Automatic Unfair Dismissal Where:

• Primary purpose is contract variation without agreement
• Employee replaced with someone on different terms
• Inadequate consultation undertaken
• Alternative solutions not explored

Limited Exceptions:

• Genuine financial emergency situations
• Following extensive consultation processes
• With appropriate compensation offers
• Where business closure is the only alternative

Protection for All Workers

This prohibition applies from day one of employment, providing immediate protection against this exploitative practice regardless of service length.

Implementation Timeline and Preparation

Phased Introduction Schedule

The Employment Rights Bill changes roll out over two years to allow proper implementation:

Preparing for Changes

For Employees:

✅ Document current working arrangements and communications

✅ Join relevant trade unions for support and representation

✅ Understand your current rights before changes take effect

✅ Follow ongoing consultations and policy developments

✅ Prepare for enhanced rights in 2026-2027

For Employers:

• Review HR policies and procedures
• Train management on new legal requirements
• Update employment contracts and handbooks
• Prepare for increased administrative burdens
• Budget for potential cost increases

New Fair Work Agency Enforcement

Enhanced Enforcement Powers

The Employment Rights Bill establishes a new Fair Work Agency in early 2026, bringing together various employment enforcement functions under one umbrella.

Agency Powers:

• Proactive workplace inspections
• Financial penalty enforcement
• Worker support and guidance
• Cross-cutting investigation capabilities
• Collaboration with existing bodies like ACAS

Worker Benefits:

• Single point of contact for employment issues
• Faster resolution of workplace disputes
• Stronger deterrent against employer non-compliance
• Enhanced support for vulnerable workers

Impact on Different Worker Categories

Agency and Temporary Workers

The Employment Rights Bill significantly improves protections for non-permanent staff:

Zero-Hours Protections:

• Guaranteed hours apply through agencies
• End-user clients responsible for work provision
• Same compensation rights for shift changes
• Protection against discriminatory hour allocation

Pregnancy Protection:

• Both agency and client company responsibilities
• Cannot refuse work assignments due to pregnancy
• Same redundancy protection as permanent staff

Part-Time and Low-Paid Workers

Sick Pay Revolution:

• 1.3 million additional workers gain SSP eligibility
• 80% wage replacement for lowest earners
• Day-one coverage eliminates waiting periods
• Particular benefit for care workers and hospitality staff

Sector-Specific Implications

Retail and Hospitality:

• Major impact on zero-hours contract usage
• Improved sick pay for part-time workforce
• Stronger unfair dismissal protection

Construction and Manufacturing:

• Enhanced protection for short-term contracts
• Better support during illness periods
• Reduced vulnerability during probationary periods

Employer Obligations and Compliance

New Administrative Requirements

The Employment Rights Bill creates additional compliance obligations for employers:

Documentation Requirements:

• Enhanced record-keeping for flexible working decisions
• Detailed justification for dismissals during initial periods
• Comprehensive consultation records for redundancies
• Guaranteed hours calculation documentation

Cost Implications:

• Increased statutory sick pay expenditure (£38 per employee annually)
• Higher employment tribunal claim frequency
• Enhanced compensation payments
• Administrative system updates

Compliance Strategies

Best Practice Approach:

• Implement changes early to demonstrate good faith
• Provide comprehensive manager training programmes
• Update all employment documentation proactively
• Establish clear internal grievance procedures

Image: Prakasam Mathaiyan

Frequently Asked Questions

Do These Rights Apply to All UK Workers?

Yes, the Employment Rights Bill applies to all employees working legally in the UK, regardless of nationality. This includes workers with settled status, British citizens, and those with valid work visas.

What Happens If My Employer Ignores the New Rules?

You can file a claim with an employment tribunal for compensation. The new Fair Work Agency will also provide support and can issue penalties to non-compliant employers.

How Will These Changes Affect My Wages?

The Employment Rights Bill doesn’t directly mandate wage increases, but improved sick pay and other benefits provide better overall compensation. Some employers may adjust wages to offset increased costs.

When Should I Seek Legal Advice?

Consider legal support if you face:

✅ Dismissal you believe is unfair or discriminatory

✅ Pregnancy-related workplace discrimination

✅ Denial of new statutory rights

✅ Fire and rehire tactics

✅ Zero-hours contract exploitation

Can Employers Opt Out of These Requirements?

No, the Employment Rights Bill creates statutory rights that cannot be waived by contract or agreement. Attempts to circumvent these protections may result in automatic unfair dismissal claims.

Expert Analysis: Long-Term Impact Assessment

Economic Implications

The Employment Rights Bill represents a fundamental shift in UK labour market dynamics. While employer costs will increase, research suggests improved worker security often leads to:

• Enhanced productivity: Secure workers demonstrate higher engagement and output
• Reduced turnover costs: Lower recruitment and training expenses
• Innovation catalyst: Companies forced to improve working conditions often innovate more effectively
• Consumer spending boost: Workers with greater security spend more confidently

Comparative International Context

The UK’s Employment Rights Bill brings British employment law closer to European standards while maintaining distinctively British flexibility. Countries with similar protections – Germany, France, Denmark – demonstrate that strong worker rights can coexist with competitive economies.

Potential Challenges

Implementation Complexity:

• Significant HR system updates required
• Manager retraining across all sectors
• Potential for increased employment litigation
• Small business adaptation challenges

Economic Timing:

• Introduction during uncertain economic conditions
• Additional costs for already-pressured businesses
• Need for careful monitoring and adjustment

Preparing for the Employment Rights Bill Era

Worker Action Plan

Immediate Steps (2025):

1. Document everything: Keep records of current working arrangements, communications with management, and any workplace issues
2. Know your current rights: Understand existing protections to better appreciate upcoming improvements
3. Join a trade union: Collective representation provides stronger protection and support
4. Stay informed: Follow government consultations and industry news about implementation details

Medium-term preparation (2026):

1. Update employment contracts: Ensure new rights are properly reflected in your terms
2. Understand flexible working options: Prepare requests that align with new “reasonably feasible” tests
3. Plan for enhanced protection: Consider how improved rights might affect your career decisions

Building Workplace Relationships

Strong relationships with colleagues and management become even more valuable under the Employment Rights Bill. Collaborative approaches to implementing new rights often yield better outcomes than adversarial stances.

Effective Communication Strategies:

• Frame requests in terms of business benefits, not just personal preferences
• Propose trial periods for flexible working arrangements
• Offer solutions alongside problem identification
• Maintain professional documentation of all interactions

Conclusion: A New Era for UK Employment

The Employment Rights Bill marks the most significant advancement in UK workers’ rights since the European Union employment legislation of the 1990s. For millions of British workers, these changes promise genuine security, dignity, and fairness in the workplace.

Transformational Benefits:

• Enhanced protection against unfair dismissal (implementation 2027)
• Day-one sick pay with expanded eligibility (April 2026)
• Guaranteed hours for regular zero-hours workers (2027)
• Default flexible working with stronger employee rights (2026)
• Enhanced pregnancy protection with extended coverage (2027)

The Employment Rights Bill doesn’t just tweak existing systems – it fundamentally reimagines the employment relationship. By 2027, every UK worker will benefit from this strengthened legal framework that prioritises security alongside flexibility.

While implementation challenges exist, the long-term vision is clear: a UK job market that works for workers, not just employers. The Employment Rights Bill creates a foundation for sustainable economic growth built on genuine partnership between employers and employees.

The legislation recognises that worker security and business success are not opposing forces but complementary objectives. Companies with engaged, secure employees consistently outperform those relying on exploitative practices.

As these changes roll out between 2026 and 2027, UK workers can look forward to unprecedented protection and opportunity in the modern British workplace.

Sources

This article draws upon the following authoritative sources:

UK Parliament. (2024). Employment Rights Bill 2024-25: Parliamentary Bills. Retrieved from https://bills.parliament.uk/bills/3737

GOV.UK. (2025). Government Response: Making Work Pay: Strengthening Statutory Sick Pay. Department for Business and Trade.

Advisory, Conciliation and Arbitration Service. (2025). Employment Rights Bill: Impact on Flexible Working Rights.ACAS Guidance Publications.

Chartered Institute of Personnel and Development. (2025). Employment Law Changes July 2025. CIPD Policy Reports.

Linklaters LLP. (2025). The Employment Rights Bill: Transforming UK Unfair Dismissal Protections. Employment Law Analysis.

Institute of Directors. (2025). Day One Protection Against Unfair Dismissal: Business Impact Assessment. IoD Workforce Matters.

Travers Smith LLP. (2025). Employment Rights Bill: What Does It Mean for Employers? Legal Practice Analysis.

House of Commons Library. (2025). Employment Rights Bill 2024-25: Progress of the Bill. Parliamentary Research Briefings.

Awoc Accounting https://www.awocaccounting.co.uk/