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October 14, 2024
How Labour's New Employment Rights Bill Will Impact Your Business
As a local recruitment agency with over 25 years of experience in the Staffordshire and Cheshire regions, we’ve seen plenty of shifts in employment law, but the new Employment Rights Bill could bring some of the most significant changes we’ve witnessed in decades.
With the Labour government’s focus on a “New Deal for Working People,” this bill will reshape how businesses handle everything from employee rights to industrial action. To ensure your business remains compliant and competitive, here’s a breakdown of what you need to know.
Key Reforms in the Bill
- Day-One Protection from Unfair Dismissal - One of the most anticipated changes is the right for employees to be protected from unfair dismissal from the very first day of employment. This marks a departure from the current two-year qualifying period and could affect how you handle hiring and probation. While it adds protection for workers, it also means businesses will need to be more cautious about dismissals, ensuring that robust procedures and fair practices are in place from day one.
- Restrict ‘Fire and Rehire’ Practices - The bill is also expected to crack down on the controversial ‘fire and rehire’ method, which has often been used to reduce staff costs by rehiring employees on less favorable terms. While this practice might not be entirely outlawed, it will become far more restricted, and businesses will need to explore alternative ways of restructuring if this has been a common practice in your industry.
- Zero-Hours Contracts and Predictable Work Hours - Labour is planning to introduce tighter regulations on zero-hours contracts, a common feature in sectors like hospitality and retail. The bill proposes a shift toward more predictable work patterns, with employees entitled to an average-hours contract based on a 12-week reference period. Additionally, businesses will need to provide reasonable notice for shifts and compensate employees for any last-minute cancellations, which could impact how you schedule and manage your workforce.
- Improved Work-Life Balance Measures - The bill will likely also enhance work-life balance by expanding rights such as flexible working from day one. The “right to switch off,” aimed at preventing work encroaching on personal time, is another measure expected to be included. This means employers may need to review communication policies and ensure that employees are not expected to be “always on.”
- Fair Pay and Youth Employment - Labour’s emphasis on fair pay includes plans to abolish the lower minimum wage rate for 18-20-year-olds, meaning all adult workers will be entitled to the same National Living Wage. This will impact sectors like retail and hospitality, where younger workers often fill entry-level roles. Moreover, unpaid internships will be banned unless they are part of a formal training or educational programme, so if your business offers internships, you’ll need to re-evaluate these arrangements.
- Trade Union Reforms - The bill is also set to reverse some of the limitations on trade unions introduced by previous Conservative governments. This includes simplifying the process for union recognition and repealing laws that restricted the right to strike, such as the 2023 Strikes (Minimum Service Levels) Act. Employers will need to be prepared for potential increases in union activity and ensure they’re aware of the legal framework surrounding industrial action.
What This Means for Employers
For businesses in Staffordshire, Cheshire, and beyond, these changes will require careful adaptation. It’s essential to review your current HR policies, contracts, and employment practices to ensure they align with the new legislation. You may also need to consider updating training for managers and HR teams to handle these new responsibilities effectively.
How We Can Help
At our recruitment agency, we’re here to support you through these changes, we have the local expertise and industry knowledge to guide you every step of the way.
The new Employment Rights Bill is just around the corner, and staying ahead of these changes will help protect your business and ensure your employees thrive in a fair, compliant environment. If you’d like to discuss how this impacts your recruitment needs or your current workforce management, don’t hesitate to get in touch with our team today.
By preparing now, you’ll be in the best position to navigate these changes with confidence and keep your business compliant in this new era of employment law.
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Small and medium employers are used to juggling checklists. Payroll, recruitment, line-manager training, etc. But 2026 is different: the rules aren’t just changing, and the way decisions are judged is shifting. That makes everyday choices (flexible-working replies, sickness pay, probation calls) more likely to land a business in trouble, even when managers act in good faith. Below are the practical changes UK SMEs should prioritise now, what they mean in everyday terms, and a short checklist you can action this week. Quick summary From 6 April 2026 , some family and sick-pay rights become day-one entitlements. That affects paternity, unpaid parental leave and statutory sick pay. Statutory Sick Pay (SSP) waiting days are being removed and entitlement rules change — payroll must be ready. Collective redundancy penalties increase: protective awards can double, so consult properly or risk larger fines. These changes are rolling in across 2026; employers should focus on process, documentation and manager training , not just policy wording. What’s changing (and why it matters) 1. Day-one family rights — paternity & unpaid parental leave From April 2026, employees can give notice for statutory paternity leave and unpaid parental leave from their first day of employment. That removes the old 26-week / 12-month service tests and brings more people into scope immediately, which is good for families, but means employers must be ready to process, record and respond to requests from day one. Practical impact: update your parental-leave procedure, train whoever handles returns and leave, and make sure your contractual templates and employee handbook reflect the new eligibility rules. 2. Statutory Sick Pay: waiting days gone, wider entitlement The current three waiting-day rule for SSP is being removed from 6 April 2026, and entitlement rules are being widened (for example, the lower earnings threshold is being removed). SSP rates are also updated for 2026–27. Payroll teams need to be able to pay SSP from day one and to calculate linked periods correctly. Practical impact: talk to payroll/your software provider now. Test scenarios: short absences, linked periods, low-paid staff. Confirm how your payroll will apply the new SSP rules from 6 April. 3. Redundancy and collective consultation: higher protective awards The maximum protective award for failing to consult properly in a collective redundancy situation will increase (reports indicate a doubling to 180 days’ pay). That makes getting consultation, records and redundancy planning right far more important. Practical impact: audit your redundancy playbook, update consultation steps, and ensure you have a clear paper trail showing how decisions were reached and who was consulted. 4. The broader shift: process matters more than ever Across the Employment Rights Act and related reforms, a repeated theme is that tribunals and regulators are looking for defensible processes: consistent handling, documented reasoning and fair communication. That means the smallest missing note in a file, an informal chat that wasn’t recorded, or inconsistent treatment of similar cases can be costly. Practical impact: build manager scripts, standard templates for decisions, and a simple central filing system for HR notes. Train managers to log reasoning, not just outcomes. What SMEs should do this week (practical checklist) Immediate (this week) Talk to payroll: confirm SSP changes will be applied from 6 April 2026 and test a Day-1 absence scenario. Update your parental-leave and paternity-leave procedure to reflect day-one entitlement. Put a ‘how to’ note in the employee handbook and your manager guidance. Identify who handles redundancy consultation and map the steps — confirm who will lead and document each stage. Short term (2–4 weeks) Run a 30-minute manager briefing: how to record decision reasoning, where to save notes, how to respond to flexible-working and SSP queries. (Make it practical, use examples.) Review and update contract templates and staff handbook sections that reference qualifying periods, waiting days or eligibility tests. If you have uncertainties Keep a short list of questions and seek a 15-minute HR/ employment-law clinic rather than overhauling everything at once. Many small fixes (clear wording, a consistent file note template, payroll checks) remove most risk. FAQs Q: Do I have to update every contract before 6 April? A: Not always. Prioritise payroll and policies for SSP and parental rights, and ensure your core contract wording doesn’t contradict the new rules. Plan a phased update for full contract refresh. Q: What happens if I get it wrong? A: For individual disputes, you might face claims (and back-pay for SSP). For collective redundancy failures, protective awards can be materially higher from April 2026, so weak process can be costly. Q: Should I panic and rewrite every policy now? A: No. Start with the high-risk items: payroll SSP, parental-leave eligibility, and redundancy consultation steps. Fix the data and the decision flow; wording and full rewrites can follow on a schedule. Want a hand? If you’d rather not puzzle through the detail alone, we’re running a short, practical webinar that covers these exact points and gives you an immediate checklist to act on. Learn more about it here.