UK Labor Law – Legislation For Proposed Significant Reforms Unveiled

The UK’s new Labour government published its highly anticipated Employment Rights Bill last week. In total, the draft Bill contains 28 stand-alone employment law reforms (including many of the changes that we outlined in our blog post earlier this year - see Significant UK Labor Law Reforms on the Horizon).

The key measures in the Employment Rights Bill are:  

• Removing the two-year qualifying period for unfair dismissal protection (meaning employees will have this protection from day 1 of employment). The Government will consult on introducing a ‘statutory probation period’ in which employers can assess the suitability of new hires – the government’s preference is for this probation period to be nine months, during which employers could follow a ‘lighter touch and less onerous’ procedure to dismiss an employee who is not suitable for their role.
• Introducing ‘day 1’ rights for employees to take paternity, unpaid parental and bereavement leaves, as well as giving employees an entitlement to receive statutory sick pay from day 1 of sick leave (rather than day 4). The entitlement to bereavement leave is a new right (currently, eligible employees only have a right to take parental bereavement leave).
• Strengthening the flexible working request regime by requiring employers to explain in writing to an employee why any rejection of the request is reasonable. This is with the intention of flexible working becoming the ‘default position’, unless it is not practical.
• Enhancing protections for pregnant women and new mothers, including dismissal protection during pregnancy, maternity leave, and the first six months of returning to work after maternity leave. There will also be equivalent protections for employees returning from adoption and shared parental leaves.
• Requiring large employers to create action plans on addressing gender pay gaps and supporting employees through the menopause.
• Introducing employer liability for third party harassment when the employer failed to take all reasonable steps to prevent it, whilst also enhancing the obligation for an employer to take all reasonable steps to prevent sexual harassment (as opposed to ‘reasonable steps’ only).
• Making it automatically unfair for employers to dismiss employees for refusing to agree to variations to their contract (other than in very limited circumstances).
• Banning ‘zero hour’ (i.e., casual worker) contracts if they are deemed to be exploitative and entitling zero hour workers to a guaranteed hours contract if they work regular hours over a defined period.

The government also published a separate document (see here) outlining other proposed changes that it hopes to implement in the future (subject to stakeholder consultation). These proposals include the introduction of a ‘right to switch off’, expanding pay gap reporting to cover disability and ethnicity, removing a category of employment status so that all individuals would be either a “worker” or “genuinely self-employed”,  and reviewing the unpaid leave systems for carers and parents. No timeframe has been given for implementing these proposals.

The government does not anticipate implementing the reforms bullet pointed above before 2026, and has stated that the unfair dismissal reforms will not take place before Fall 2026. Further, these are proposed reforms, and it is entirely possible that changes will be made following stakeholder consultation, including decisions not to proceed with certain elements. Nonetheless, it will be important for UK employers to start considering how these changes would impact its workforce and employment practices, and to what extent it can contingency plan for them.