UK Employment Rights Bill:
6 key changes employers need to start preparing for now.

The UK government has announced significant amendments to the Employment Rights Bill. As these changes will reshape the employment landscape, here’s what your business should be focusing on right now and some practical steps in response:

1. Day One Unfair Dismissal Rights & Extended Claim Periods.

The time limit for tribunal claims is doubling from 3 to 6 months, and employees will have unfair dismissal rights from day one of employment.

Action Steps:

• Review and strengthen your recruitment processes to ensure you’re hiring the right people (eg incorporating cultural fit evaluations with multiple team members involved in the hiring decision);
• Implement systems to record information in a timely manner and avoid memory lapses (eg a centralized repository for employment records where managers can upload contemporaneous notes from performance discussions);
• Consider updating your probation procedures to identify issues early (eg designing Design 30-60-90 day check-in templates with specific performance metrics).

2. Fair Work Agency and compliance enforcement.

The new Fair Work Agency will enforce compliance with employment laws such as holiday and sick pay and national minimum wage including holiday pay, with potential penalties of 200% of underpayments (up to £20,000 per individual). Changes to the Working Time Regulations will require holiday entitlement records to be kept for six years. Failure to comply will be a criminal offense with potentially unlimited fines.

Action Steps:

• Conduct a thorough audit of your holiday pay calculations and record-keeping
• Set up robust systems to track and document holiday entitlements for the required six-year period
• Ensure payroll systems are updated to reflect current regulations

3. Collective Redundancy Changes

The Bill introduces a new trigger for collective consultation when redundancies occur across multiple sites, and the cap on protective awards for failure to consult will double to 180 days’ gross pay.

Action Steps:

• Create company-wide tracking systems for proposed dismissals across all sites
• Review your redundancy procedures and train managers on the enhanced consultation requirements
• Factor in increased financial risk when planning any restructuring

4. Sick pay

Employees will be entitled to 80% of their normal weekly earnings if it is less than the SSP flat rate and because ‘waiting days’ are being removed from the SSP regime, they will be entitled to receive this payment from day 1 of absence.

Action Steps:

• Factor increased cost into future employment costs
• Consider ways to reduce sickness absence levels, such as focusing on the mental wellbeing of employees

5. Zero-Hours Contract Reform

Employers will be required to offer guaranteed hours to zero-hours and low-hours workers based on their average hours worked over a reference period (likely 12 weeks) and protections are extended to agency workers fitting the profile of zero/low-hours workers. Responsibility for providing agency workers with reasonable notice of shifts will be on the end hirer in addition to the employment agency. Responsibility for paying for short-notice shift cancellation, movement or curtailment will be on the agency. New anti-avoidance provisions will prevent employers from manipulating shift patterns and offers.

Action Steps:

• Consider your current casual workforce usage patterns and processes for communicating shifts to reflect what is reasonable in your circumstances.
• Begin planning for how to structure work to accommodate the guaranteed hours requirement
• Be prepared for employment businesses allocating liability for short-notice cancellation/movement/curtailment which may need ot be negotiated.

6. Enhanced Trade Union Rights

The Bill makes industrial action easier to initiate by removing minimum turnout requirements for strike ballots and extending the validity of ballot mandates from 6 to 12 months. Notice periods for industrial action changes to 10 days.

Action Steps:

• Strengthen relationships with trade unions through regular engagement
• Establish well-defined negotiation processes in collective agreements
• Develop contingency plans to manage potential industrial action with shorter notice periods

These changes signal a significant shift in UK employment law. While some elements remain subject to further clarification, now is the time to review your HR practices, consider updating your policies, and ensure your business is prepared for compliance when these measures take effect.