Labour’s employment rights bill: what key changes will it bring?

Labour’s employment rights bill is the biggest step towards enacting one of its key election offers: to make sweeping changes to rights at work and improve pay. Here are the main details of the legislation, though much of it will take more than two years to consult on and implement.

Day-one rights

Workers will qualify for protection against unfair dismissal from day one – a benefit for 9 million people. Previously, employees must have been at their place of work for at least two years in order to qualify.

There will also be day-one rights for paternity leave and unpaid parental leave. Maternity leave is already a day-one right. A full review of all parental-leave rights is promised alongside the bill.

An extra 30,000 fathers or partners will be brought into scope for paternity leave, while an additional 1.5 million parents will gain flexibility, with unpaid parental leave becoming a right from day one. There will also be a requirement for employers to establish a policy for bereavement leave.

Sick pay

There will be a universal entitlement to sick pay from the first day of illness for employees. Workers will get rights to sick pay from day one, rather than from day four.

Statutory sick pay is £116.75 a week and can be paid for up to 28 weeks, as long as the employee is earning an average of at least £123 a week. The government says this will be “strengthened” by removing the lower earnings limit for all workers; though the rate could be lower for workers who aren’t eligible for sick pay at all.

Probation

The government will consult on a statutory probation period for new hires; employees will still be able to claim for unfair dismissal. Ministers say this means there will be a “lighter touch” approach to letting an employee go during the probation period if the role is not working out.

The probation period will be consulted on and introduced in autumn 2026 to coincide with the enforcement of the new rights. The government now favours a limit of nine months– lengthened after pressure from businesses – which caused some disquiet among trade unions which had asked for a limit of six months.

Zero-hours contracts

More than 1 million people on zero-hours contracts will gain guaranteed working hours if they want them. Those workers, along with those on low-hours contracts, will have the right to a guaranteed-hours contract if they work regular hours over a defined period, which Labour’s original proposal said would be 12 weeks. Employees can also request to remain on zero-hours contracts if that is what they would prefer.

Fire and rehire

Fire and rehire practices will be banned in all but the most extreme circumstances, meaning employers cannot sack employees and rehire them on worse terms and conditions. There will be carve-outs, however – a move that has caused consternation from unions. Businesses at risk of complete collapse may be able to alter terms and conditions if it is the difference between going bust.

Flexible working

The law will change to make flexible working the default “where practical”, and action plans must be drawn up to address gender pay gaps and to support female employees through menopause.

There will also be stronger protections against dismissal during pregnancy and after returning to work from maternity leave.

Enforcement

The bill will establish an enforcement body called the Fair Work Agency, bringing together existing enforcement bodies, which will also enforce rights such as holiday pay. The remit of the new body is not likely to be fully clear until all the measures in the bill have been consulted on or enacted.

Minimum wage

The government plans to change the remit of the Low Pay Commission so it must take into account the cost of living when setting the minimum wage and remove all the age bands that set lower minimum wage for younger staff. It will mean a pay rise for hundreds of thousands of young workers.

What’s missing?

There are significant gaps in the bill compared to the promises Labour made in its original “new deal for working people”. But a document is planned that will promise to implement at least 30 more proposals, including:

• Guidance – but not legislation – on the right to switch off, preventing employees from being contacted out of hours, except in exceptional circumstances.

• Legislation to end pay discrimination, which is expected to come separately in a draft bill that will include measures to make it mandatory for large employers to report their ethnicity and disability pay gap.

• A consultation on a move towards a single status of worker – one of the most important changes that has been left out of the bill, which Labour sources have said needs a much longer consultation period.

• Reviews into the parental leave and carers’ leave systems.

Trade unions

Union rights were a big part of the plans, though the commitments are often being delivered through other means. Angela Rayner has written to government departments telling them not to enact the Tories’ minimum level of service bill and changes will be made to other union restrictions enacted by the Tories.

New rights to online balloting are also expected to be introduced but no new legislation is required to do this.