The Latest on the Government’s Employment Rights Bill
When the Labour party came to power in July 2024, they announced that within 100 days of their tenure that the Employment Rights Bill (‘ERB’) was going to be tabled. True to their word, the Government set out several planned changes to employment laws in the form of the ERB. Significant changes will be coming in for unfair dismissal, fire and rehire (for when contract changes cannot be agreed), zero hours contracts, and more.
In earlier articles of ours, we have highlighted some predicted dates for the implementation of the changes based upon comments made by Government papers and officials. It is still expected that the majority of the major changes will come in at the end of 2026. However, there is significant uncertainty over the bill and its implementation.
Part of the reason for this uncertainty is that the ERB is still passing through Parliament and has been subject to a huge number of amendments. The amendments are partially due to consultations that employers have been asked to contribute to (along with other stakeholders) on the most significant changes.
New Statutory Probation Period
The only change with a certain date is the new statutory probation period, which is linked to the unfair dismissal changes; this will be coming into force in October 2026.
As those familiar with unfair dismissal will know, we currently have the ‘2-year rule’ which refers to the 2-year qualifying period before employees can bring claims for unfair dismissal. This means that before an employee reaches 2-years’ service, it is generally a lot easier to dismiss them as employee are yet to attain full employment rights.
The changes made by the Government mean that this 2-year period will go, meaning you always have to use a fair process and have a fair reason for dismissing an employee from day 1 of their employment. However, to provide some much needed flexibility when the new rule comes in, the Government is implementing a statutory probation period (within which time it will remain easier to dismiss like the current 2-year rule). The length of this probation period is rumoured to be either 6-months or 9-months. It is this statutory probation period which the Government has said will come into force in October 2026.
Why is this important now?
It is expected that the changes to the 2-year rule will impact hiring people in the period from now up until October 2026. This is because, when the 2-year rule is abolished in October 2026, employees who do not have 2-years’ service yet will automatically gain protection from unfair dismissal. For example, an employee starting in April 2025 will qualify for unfair dismissal protection in October 2026, 18 months after the start of employment (before they reach the 2-year mark).
What this means is that every employer will need a fair reason for dismissal, such as conduct or redundancy, and they will need to follow any policies they have in place.
In Conclusion
Given the number of amendments being proposed, the ultimate shape of the ERB is yet to be fully defined. The Government is being put under pressure to provide sufficient details in advance of implementation so that employers can plan for the changes. We will provide a further update when the timetable for the changes is published, which it is hoped will be around July 2025.
As always, this advice is general in nature and will need to be tailored to any one situation. As a MILS member you have access to the MILS Legal advice line, as well as several industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate
