United Kingdom: Proposed stronger employment rights for employees

Employer Action Code: Monitor

The new Labour government has introduced the Employment Rights Bill to enact many of its plans to improve working rights for employees. The wide-ranging bill includes 28 different reforms, including establishing employees’ rights to family and sick leaves from the first day of employment and greatly restricting employers’ use of zero-hours contracts and “fire and rehire” practices. Separately, a draft Equality (Race and Disability) Bill expected to be introduced later this year would require equal pay reporting based on ethnicity and disability for firms with 250 or more employees.

Key details

First day employment rights would apply to:

• Statutory Sick Pay (SSP), paternity and additional parental leave: The three-day statutory waiting period for employer-paid SSP would be removed as would the service requirements for employer-paid paternity leave (currently 26 weeks) and additional parental leave (one year).
• Bereavement: The service requirement for employer-paid leave in the event a child’s death (or stillbirth after 24 weeks of pregnancy) would be eliminated, and eligibility for unpaid leave would be expanded to cover deaths of other relatives/relations (to be specified).
• Protections against unfair dismissal: The two-year service requirement for such protections would be replaced by a “light touch” initial employment period to be determined by regulation (proposed to be nine months).

Right to guaranteed hours under zero-hours contracts

• Workers on zero-hours contracts would have the right to guaranteed-hours contracts reflecting hours regularly worked over a 12-week reference period as well as “reasonable” notice of any shift changes and compensation for shifts that are cancelled or cut short.

Stricter controls on “fire and rehire”

• The practice of dismissal and re-engagement on less favorable terms would be restricted. Dismissals where employees do not agree to changed employment terms or where the intent is to replace or to re-engage employees under less favorable terms would automatically be deemed unfair unless the employer can demonstrate that the changes are an unavoidable effect of financial difficulties.

Stronger flexible working rights

• Employers would be required to explain their reasons for denying requests for flexible work arrangements.
• Companies with 250 or more employees would be required to create action plans outlining support for female employees experiencing menopausal symptoms (e.g., allowing employees to work from home or adjusting start/finish work times).

Enhanced redundancy rights

• Advanced notice and consultations would be required for dismissals of 20 or more employees across an employer’s workforce (rather than in a single establishment). The government is also considering lifting the cap on protective awards (up to 90 days of pay per employee) or eliminating it entirely, in cases where an employment tribunal finds the employer failed to follow the collective redundancy process.

Employer implications

These are only some of the proposed measures. Companies should consult with their legal counsel to review the impact of the changes on their operations. If approved, the changes are not expected to come into effect until fall of 2026.