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Employment Rights Bill is an ambitious reform project, covering 28 areas in employment law
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Businesses will have ample time to prepare and consult on details before the implementation of major reforms
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The majority of changes are not likely to be implemented until 2026 and the unfair dismissal reform won’t come into effect before autumn 2026
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The government has not budgeted additional funding for the tribunal system which may be overwhelmed by a surge in employment litigation
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Employment tribunals already stretched to the limit
Littler, the leading specialist employment law firm.
It will take time for the magnitude of the changes in employment law to sink into the minds of most employers. It’s clear that employers face a huge task now that the Employment Rights Bill was introduced in Parliament.
But much detail remains to be worked out. It’s a blessing and a curse. Employers will be able to consult the government about the details, such as the lengths of probationary periods. But they will also have to wait longer to prepare the reforms.
“However, this is an ambitious reform programme and if details are not changed fundamentally during consultation, employers may have to overhaul their internal management processes and retrain managers, or face an increase of tribunal claims. It is important to not underestimate the costs and time involved.”
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Day 1 rights, unfair dismissal and probation period
“In a concession made to the business community, it appears that the government has decided to allow employers to place new recruits in probationary status for up to 9 months. Employers will welcome this as it gives them more time to evaluate new hires. There will be some opposition from the trade unions, who see this as a reversal of Labour’s promise to give all employees day-one rights. The government will consult on this detail, so even though we know what it prefers, the final law may differ.
Nine months is a significant concession for business, and this length of probation period is unusual in practice. There is a delicate balance to strike between employers’ fear of hiring (if the probationary period was shorter) and the need to not undermine day one rights.
“Another area for consultation is the requirements to dismiss during probation. Labour has made it clear that probation does not give employers a free hand to dismiss. Unfair dismissal begins on day one. If today’s announcements were any indication, employers might be relieved to learn that a lighter version of fair procedure may be required for such a probationary period.
The government also plans to consult about a compensation scheme for successful claims made during the probationary period, taking into consideration that tribunals may not be able to award all compensatory damages available.
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New Single Enforcement Body
“The proposed Fair Work Agency” introduces an unwelcome regulatory burden on businesses.”
The proposed agency could lead to a more proactive enforcement system that employers would have to deal.
The agency officers have the authority to inspect employers who are not in compliance with employment laws and impose penalties.
Rumours indicate that the new enforcement agency will be established by the autumn of 2026, giving businesses time to prepare. To achieve this timeline, the enforcement body needs to have funding allocated. “The Government has not yet committed to any expenditures, so employers can enjoy a longer timeframe for adapting.”
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Employment Tribunals are already stretched to the limit – a surge in employment disputes would put the system under unsustainable strain
There are currently no plans to provide additional funding for the courts to cope with the expected surge in litigation.
“Employers, employees and both parties are waiting years for employment disputes to be resolved. That’s not fair to either party.”
The last time that the Employment Tribunals released data on this, it took 49 weeks to receive a preliminary hearing. Recently, they have told us that the state of their systems is such that they are unable to provide information about the backlog.
The Employment Tribunals have a huge backlog of cases. Changes to the Employment Rights Bill would only make the situation worse without additional funding for the Tribunal.
The increase in unfair dismissal claims will be a result of making unfair dismissal an “all-day” right. This is true even if probation periods are allowed. Other reforms Labour includes in the Bill are also likely to contribute to this increase, such as the expansion of the rights to request flexible work, the right of switching off, and the reforms to collective bargaining.”
“Another longer-term ambition, which is not in the Bill, would be that the Government consults with Acas about allowing employees to collectively complain about conduct at their workplace. It would be a major shift in the way employees currently raise grievances individually against their employers. It may reduce the burden on tribunals in the long term, but it will depend on the resources and funding of Acas, as well as the details of the system. “It also seems to be a longer road ahead.”
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Expanded right to request flexible work
This change may cause employers to struggle with keeping employees happy, as they will likely face increased demand for flexible work.
The right to request flexibility may also make it more difficult for employers to enforce the “return to work” policies they have introduced.
The Bill provides an enhanced and expanded right to request flexibility in working. Employees can request flexible work from the first day, and employers are more likely to be unable to deny the request because they will have to provide a reasonable reason to do so. Although this creates statutory rights to work from home.
What is not included in the Bill, is the proposed introduction to the Right to Switch Off. The Government has stated that the Right to Switch Off is still on the agenda, and will be implemented through a code of conduct alongside the Bill. This right is intended to stop employees being contacted outside of working hours, except for exceptional circumstances. It will allow them to rest and recover so they can give their best.
5. Harassment
The Bill could include some potentially significant changes, such as changing the obligation of employers to prevent harassment by sexual means from “reasonable measures” to “all reasonable measures”. This new duty will come into effect later this month. It is much harder for employers to prove this. The Bill also proposes third-party harassment, which would be difficult for employers to implement in practice, and was therefore dropped when the Worker Protection (Amendment of Equality Act 2010 ) Act 2023 passed.
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