Lattice / Policy Translator / Employment Rights Bill
BILL · EMPLOYMENT-RIGHTS-BILL
Lords · Report stage

Employment Rights Bill

Employment Rights Bill 2024-25 · Department for Business and Trade

Introduced 10 October 2024 · Commons stages complete. Lords Committee finished March 2025. Report stage ongoing.

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Quick summary

Makes unfair-dismissal protection a day-one right (currently 2 years), abolishes most uses of zero-hours contracts in favour of guaranteed-hours offers, restricts 'fire and rehire' to genuine business-failure scenarios, and entitles workers to statutory sick pay from day one. Includes a Fair Work Agency to enforce minimum-wage and holiday-pay rules in one place.

Key numbers

Workers gaining day-one unfair-dismissal protection

~9 million

Zero-hours workers affected

~1.1 million

SSP threshold removed

£123/wk earnings rule gone

New Fair Work Agency budget (year 1)

~£80m (est.)

Who this affects

What's in the bill

Part 1 — Day-one rights

What it says

Removes the 2-year qualifying period for unfair-dismissal protection. Repeals the Lower Earnings Limit for Statutory Sick Pay; SSP payable from day one.

What it means

From your first day in a new job, you can claim unfair dismissal at tribunal if you're sacked without a fair reason and process. If you're off sick, you get SSP without waiting three 'waiting days'.

Who it affects

All employees, especially short-tenure and low-paid workers

Part 2 — Zero-hours and guaranteed hours

What it says

Creates a right to be offered a guaranteed-hours contract reflecting hours worked across a 12-week reference period. Compensation for shifts cancelled at short notice.

What it means

If you regularly work 25 hours/week on a zero-hours contract for 12 weeks, you can ask for a 25-hour contract. If your shift is cancelled with less than the prescribed notice, you get paid.

Who it affects

Workers in hospitality, care, retail, gig economy

Part 3 — Fire and rehire

What it says

Makes dismissal-and-rehire on varied terms automatically unfair unless the employer faces severe financial distress and has consulted properly.

What it means

Employers can no longer threaten to dismiss workers and rehire them on worse pay or conditions as a routine negotiating tactic.

Who it affects

Any unionised workforce; sectors with recent fire-and-rehire disputes (transport, telecoms)

Part 4 — Fair Work Agency

What it says

Merges HMRC's National Minimum Wage enforcement, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate into a single enforcement body.

What it means

One body — with one phone number — investigates minimum wage, holiday pay, modern slavery and agency-worker complaints. Civil and criminal sanctions in one place.

Who it affects

Employers; vulnerable workers in low-paid sectors

Part 5 — Trade union access and recognition

What it says

Restores the union recognition threshold to a simple majority of those voting. Trade unions gain a statutory right to access workplaces for organising.

What it means

Recognising a union becomes easier where workers want it. Unions can hold meetings on employer premises subject to a code of practice.

Who it affects

Trade unions; employers in non-unionised sectors

Stakeholder impact

Employees

●●●●●

Now

Need 2 years' service for unfair-dismissal claims. SSP withheld for 3 'waiting days' and requires £123/wk earnings.

After this bill

Day-one unfair-dismissal protection. SSP from day one with no earnings threshold. Right to guaranteed-hours offer.

Timeline · Phased over 6-18 months from Royal Assent

Employers

●●●●○

Now

Flexible probationary period in practice (2 years); fire-and-rehire legally available.

After this bill

Must follow a fair-dismissal process from day one. Statutory probationary period (likely 9 months) under consultation. Cannot routinely fire-and-rehire.

Timeline · Day-one rights need new HR processes from commencement

Workers on zero-hours contracts

●●●●●

Now

No automatic right to guaranteed hours; shifts can be cancelled with no compensation.

After this bill

Right to a contract reflecting actual hours; compensation for cancelled shifts.

Timeline · Commencement c.6 months after Royal Assent

Trade unions

●●●●○

Now

Recognition requires 40% of all workers (not just voters); workplace access at employer discretion.

After this bill

Recognition by majority of those voting; statutory access rights.

Timeline · Effective from Royal Assent

Small and medium-sized employers

●●●●○

Now

Can operate light-touch HR for short-tenure staff.

After this bill

Need formal probationary processes, written reasons for dismissal, day-one HR compliance.

Timeline · Compliance costs concentrated in year 1

Rights & freedoms

Right to a fair trial (Article 6 ECHR)

Strengthens

Tribunal access expands materially — millions of workers gain a remedy from day one that was previously two years away.

Freedom of association (Article 11 ECHR)

Strengthens

Statutory union access and restored recognition thresholds enhance the practical ability to organise.

Right to property (Article 1, Protocol 1)

Restricts

Employers face new restrictions on dismissal and contract variation, which government argues are proportionate to the social-policy aim of fair work.

SafeguardsStatutory probationary periods (under consultation); 'severe financial distress' exemption for fire-and-rehire.

Before & after scenarios

Aisha, hospitality worker in Manchester, zero-hours contract for 8 months

Worker on zero-hours, low earnings

Before

Works 28 hrs/wk most weeks but has no guaranteed hours. Shifts cancelled the night before are unpaid. If she's sick for two days, she gets nothing because SSP only kicks in on day 4.

After

After 12 weeks of 28-hour patterns, she can ask for a 28-hour guaranteed-hours contract. Last-minute cancellations get compensation. SSP from day one — full statutory amount for the two sick days.

Key changes

  • →Predictable income from guaranteed-hours offer
  • →Cancelled-shift compensation
  • →SSP from day 1, no earnings threshold

~1.1M workers currently on zero-hours contracts (ONS, 2024)

James, software engineer on a 3-month-old contract at a 200-person startup

New employee in white-collar role

Before

If dismissed today, no unfair-dismissal claim (under 2 years' service). Severance is whatever's in the contract.

After

From day one, has the right to a fair process before dismissal. Statutory probationary period (likely 9 months) lets employers exit early performers on a lighter standard, but the basic process must be fair.

Key changes

  • →Day-one unfair-dismissal protection
  • →Fairer process for performance-based exits
  • →Probationary 'light-touch' standard preserved short of arbitrary dismissal

Priya, runs a 12-person bakery in Leeds

Small business owner

Before

Hires seasonal staff on zero-hours. Lets people go in the first year if they're not a fit, without formal process.

After

Must build a proper probationary process from day one. Cannot zero-hours her core staff if their hours stabilise. Statutory sick pay for everyone, every day off sick.

Key changes

  • →Formal HR processes from day one
  • →Higher payroll cost from SSP from day 1
  • →Guaranteed-hours offers required for stable rota patterns

~5.5M SMEs in the UK; ~99% of all employers

Mark, retired NHS consultant

Retired worker

Before

Not directly affected.

After

Indirectly affected as a pensioner and consumer — sector cost pass-through could reach service prices (hospitality, care). Care-sector recipients may see workforce stabilisation as zero-hours becomes less common.

Key changes

  • →Possible price effects in zero-hours-heavy sectors
  • →Improved care-worker conditions where applicable

Sam, full-time public-sector employee (council planner)

Public-sector employee

Before

Already covered by collective bargaining; longer-than-statutory rights through union recognition.

After

Marginal direct impact — most rights are already at or above the new floor. The Fair Work Agency interacts with the council's HR and contractor procurement. Easier union access could affect contractors and outsourced roles.

Key changes

  • →Minimal direct change for substantive employees
  • →Significant change for outsourced and agency staff in the same workplace

Implementation timeline

  1. Royal Assent (expected autumn 2025)

    Bill becomes the Employment Rights Act. Most provisions await commencement and consultation.

  2. + 0 to 6 months

    Government consults on statutory probationary period length, Fair Work Agency design, and guaranteed-hours reference period.

  3. + 6 to 9 months

    Fire-and-rehire restrictions and union-recognition changes commence.

  4. + 9 to 12 months

    Day-one unfair-dismissal protection and SSP-from-day-one commence.

  5. + 12 to 18 months

    Guaranteed-hours regime and Fair Work Agency stand up fully.

  6. Year 3

    Statutory review of zero-hours and probationary-period provisions.

What you need to do

If you're an employee

  • 01 Keep a written record of hours actually worked — it'll matter for any guaranteed-hours request.
  • 02 If your contract has a 'pay-only-if-shift-completed' clause, that'll likely conflict with cancellation-compensation rules after commencement.
  • 03 When the statutory probationary period is set, expect a clearer dismissal process from day one — but also more documented performance reviews.
  • 04 If your workplace doesn't recognise a union, expect organising activity to become more visible from Year 1.

If you're a business owner or run an SME

  • 01 Audit zero-hours usage now — anyone with a stable rota over 12 weeks will be eligible for a guaranteed-hours offer.
  • 02 Move to written probationary processes, including objectives and review checkpoints from day one of a new hire.
  • 03 Plan for SSP cost from day one — model the payroll impact across a typical sickness year.
  • 04 Avoid any planned fire-and-rehire restructure — it'll be presumptively unfair after commencement unless you can show severe financial distress.

If you're self-employed (genuinely)

  • 01 The Bill doesn't redraw the employment-status boundary, but the Fair Work Agency will pursue 'false self-employment' more actively.
  • 02 If you have one dominant client and work to their schedule, expect more attention to whether you're really a 'worker'.
  • 03 If you engage subcontractors, treat any zero-hours-style relationship with caution.

If none of the above applies to you

  • 01 The Bill changes the price and predictability of labour across the economy — knock-ons reach prices, public services, and unemployment data.
  • 02 Workforce conditions in care, hospitality and retail are particular pressure points to watch.
  • 03 Future jobs you take will sit under the new regime by default — useful context even if not directly affected now.

Money behind the bill

Follow the funding, lobbying and ministerial meetings around this legislation. Each figure links to the underlying public-record source.

Trade-union donations to Labour (2024)

£8.4m Electoral Commission

FSB lobbying spend (Q1 2026)

£64k Lobby Register

CBI lobbying spend (Q1 2026)

£91k Lobby Register

Ministerial meetings with TUC (2024)

27 Cabinet Office transparency

Ministerial meetings with FSB (2024)

9 Cabinet Office transparency

The debate

Supporters argue

  • +TUC, Unison, Unite and the Resolution Foundation argue UK employment law is now significantly weaker than peer economies and that the Bill brings it back to a comparable floor.
  • +Resolution Foundation modelling: ~9M workers benefit materially from day-one rights.
  • +The Confederation of British Industry (CBI) has signalled acceptance of the broad direction, with detailed disagreement on timing.

Critics argue

  • −Federation of Small Businesses warns of compliance costs that fall hardest on SMEs without HR functions.
  • −Hospitality and care sectors argue guaranteed-hours rules misread the operational rationale for variable scheduling.
  • −Concerns from some legal commentators about tribunal capacity if day-one claims expand the caseload sharply.

Neutral analysis

The Bill is the most significant reform of UK employment law since the Employment Rights Act 1996. The contested issue is calibration — the statutory probationary period, the reference window for guaranteed hours, and the FWA's resourcing will largely determine its real-world bite.

Red flags

Further resources