If you’ve been following the news, you’ve likely heard about recent proposals to reform employment law. They will mainly affect rights around unfair dismissal, zero-hour contracts, sick pay, and remote working. These reforms come in the Employment Rights Bill, which, according to the Department for Business & Trade, was ”developed through collaboration with business and trade unions.”
The bill aims to keep more people in work by supporting productivity and improving the quality of life. Many hurdles in employment have harmed mental health and living standards. By rolling out legislation from 2025 to 2027, employers will have time to adapt gradually, rather than facing a sudden shift. With some changes taking effect immediately, workers can expect to see real improvements.
What has changed, and how will it impact your team?
Changes to zero-hour contracts won’t take effect until 2027, giving you time to adjust hiring. For many employers, zero-hour contracts allow a flexible workforce when needed. Employers don’t guarantee hours, and staff are not required to accept work.
Zero-hour contracts have issues, as many workers hold multiple contracts since one role doesn’t provide a stable income, causing insecurity. Overall, ZHCs benefit employers more than employees, which is why these changes will be introduced:
If you’ve worked on a zero-hour contract for over 12 weeks, your employer must offer a guaranteed-hours contract.
Workers on zero-hour contracts will get more notice of shifts and compensation for late cancellations.
These changes aim not to eliminate ZHCs but to make them fair for both sides. If your business relies on ZHCs, you may need support adapting. People Matters can help you stay compliant.
Day-one right to unfair dismissal claims
Before the Employment Rights Bill, employees needed two years’ service to qualify for an unfair dismissal claim. After making a claim to Acas, going through early conciliation, and possibly a tribunal, employees may receive compensation if their dismissal is unfair.
Now, employees can claim from their first day of work. This doesn’t affect existing day-one protections, such as those related to pregnancy or whistleblowing. Employees can also request written reasons for dismissal from day one.
There will still be an “initial employment period,” where dismissals are easier for certain reasons, but redundancies must follow fair process from the start. The period length isn’t confirmed but may be set at 9 months.
Benefits for employees:
- Stronger job security
- Greater transparency
- Higher chance of fair compensation
- Fairer treatment, as harsh action can’t be disguised as probation
Benefits for employers:
- Staff may work harder, knowing jobs aren’t temporary.
- Clearer dismissal rules help avoid legal issues.
- HR practices create more consistency.
Statutory sick pay
From April 2026, statutory sick pay will commence on the first day of absence, rather than the fourth. It will also apply to all workers, not just those earning above £123 a week. Sick pay will be either 80% of average weekly pay or the SSP flat rate, whichever is lower.
This helps vulnerable workers below the threshold receive pay while protecting their health. Previously, many people worked while ill, risking the health of others. Financial protection means that low earners won’t lose three days’ wages.
Employers also benefit from healthier staff. While costs and absences may rise, it reduces long-term health issues and boosts productivity.
Flexible and hybrid working rights
In 2027, employees will gain more rights regarding flexible and hybrid work arrangements. From day one, they can request flexible arrangements. The new law also creates a “reasonableness test” for approval.
Employers will face more requests, and denials will be subject to stricter review to ensure valid reasons. It isn’t just yes-or-no — employers must consider alternatives and compromises.
At the same time, employees may see more requests denied, as employers apply stricter processes.
The bill includes many additional changes to various aspects of workplace management. There are too many to go over in a single blog, but if you keep an eye out next month, we will cover the topic of workplace discrimination, including how the Employee Rights Act introduces stronger protections against harassment.
If your business needs assistance with adapting to these changes, it’s essential to work with a team of experts. If you have People Matters HR by your side, we can help guide you through the new bill, highlight how it may affect your business, and implement policies that will support employees and employers.