Employment Rights Bill 'seismic shift' in rights for workers

Ministers described the Employment Rights Bill as the biggest boost to pay and productivity in the workplace in a generation.

Unions warmly welcomed the measures as a “seismic shift” from the low pay, low productivity economy they accused the previous Conservative government of presiding over.

There are 28 separate changes in the Bill, with most of them not expected to be implemented before the autumn of 2026.

Some measures, such as the right to “switch off” at the end of a working day, are not in the Bill but will be included in a so-called Next Steps document for further consideration and consultation.

Deputy Prime Minister Angela Rayner (Image: Chris Furlong/PA Wire)

Under the Bill, the existing two-year qualifying period for protections from unfair dismissal will be removed and workers will have the right from the first day in a job.

Ministers say this will benefit nine million workers who have been with their employer for less than two years.

There will be consultations on a new statutory period, with ministers promising employers a “lighter touch” process covering dismissals.

The Bill also spells out day one rights for paternity, parental and bereavement leave for millions of workers, while statutory sick pay will be paid from the first day of a worker being sick rather than having to wait until the fourth day.

Around 30,000 fathers or partners will be eligible for paternity leave, while an extra 1.5 million parents will have the right to unpaid leave from day one.

Flexible working will be made the default position “where practical”, while large employers will be required to create action plans on addressing any gender pay gaps.

On the controversial issue of zero-hours contracts, employers will have to offer a guaranteed hours contract based on a 12-week reference period.

Workers on zero-hours contracts will also be entitled to a reasonable number of shifts and financial compensation if a shift is cancelled or cut short.

Deputy Prime Minister Angela Rayner said: “This Labour Government’s plan to make work pay is central to achieving our growth mission, boosting productivity.

“After years of stagnation under the Tories, we’re replacing a race to the bottom with a race to the top, so employers compete on innovation and quality.

“It’s by making work more secure and modernising workplaces that we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people.

“We’re calling a time on the Tories’ scorched earth approach to industrial relations. A new partnership of co-operation between trade unions, employers and government will put us in line with high-growth economies that benefit from more co-operation and less disruption.”

TUC general secretary Paul Nowak said: “After 14 years of stagnating living standards, working people desperately need secure jobs they can build a decent life on.

“Whether it’s tackling the scourge of zero-hours contracts and fire and rehire, improving access to sick pay and parental leave, or clamping down on exploitation – this Bill highlights Labour’s commitment to upgrade rights and protections for millions.

“Driving up employment standards is good for workers, good for business and good for growth.

“While there is still detail to be worked through, this Bill signals a seismic shift away from the Tories’ low pay, low rights, low productivity economy.”

Mick Lynch, general secretary of the Rail, Maritime and Transport union, added: “This is the most significant set of reforms in workers’ rights that we’ve seen in decades and is a far cry from the Tory government’s attempts to suppress the aspirations of working people.”

Conservative shadow business secretary Kevin Hollinrake said: “Despite a chorus of opposition and the fastest decline in confidence from business owners large and small on record, Labour are rushing this legislation through Parliament to appease their trade union paymasters, ignoring the inevitable negative economic impact on jobs and wages.

“This is a thinly veiled reward for the trade unions after they donated £28 million to Keir Starmer’s Labour Party.

“We will look closely at the detail of what the Labour Party have set out. But businesses and the economy needs certainty not the threat of being sent back to the 1970s, unleashing waves of low threshold, zero warning strikes, driving down growth and slowing productivity.”