The current two-year qualifying period for unfair dismissal protection is set to be abolished. This means all employees, from day one, will have the right to challenge unfair dismissal. This is intended to ensure a level playing field, by making sure that all businesses adhere to fair dismissal practices and foster a culture of fairness and transparency. It has also been confirmed that the reforms to unfair dismissal will not come into effect any sooner than Autumn 2026, and until then the current qualifying period will continue to apply.

The government will consult on introducing an option for a 9-month statutory probation period for new hires. It is of note that nine months is much longer than many were anticipating. The probation period concept will “set out a new balance for the early months of a job” by “providing new legally binding rights for employees from Day 1, whilst also delivering a lighter-touch and less onerous approach for businesses to follow to dismiss someone who is not right for the job” (UK government: Next Steps to Make Work Pay, October 2024). The way in which Day 1 rights may be modified in this manner during statutory probation periods will not be finalised until after a period of government consultation and prior to the preparation of secondary legislation.

The Bill aims to tackle the controversial use of zero-hours contracts. Workers on these contracts, who consistently work regular hours, will have the right to request a guaranteed hours contract at the end of each period, based on the hours they have just worked in that period. It is envisaged that this will promote workforce stability and predictability. By offering guaranteed hours, the government believes that this will reduce staff turnover, improve employee morale, and enhance productivity. While this would mark a significant change, it stops short of Labour’s original commitment to completely outlaw the use of zero-hours contracts. There is also the question of whether we will see an increase in contracting workers under different terms such as short-term contracts with guaranteed hours.

The Bill intends to limit the use of "fire and rehire" and "fire and replace" tactics, which have previously been used to diminish employee rights and benefits. It is also intended to reinforce ethical business practices by providing more criteria under which “fire and rehire” would be deemed reasonable.

The Bill introduces several measures to support working families, including:

• Flexible working as the default: Unless an employer’s refusal of a request is reasonable, flexible working will be allowed. The right reflects the existing ACAS code of practice on Flexible Working, which states “employers must agree to a statutory request for flexible working unless there is a genuine business reason not to”, but widespread coverage of this particular right may lead to increases in the number of flexible working requests.
• Day-one rights for paternity, parental, and bereavement leave: This is designed to increase support for employees during significant life events, demonstrating a commitment to employee well-being.
• Strengthened protections for pregnant women and new mothers: This includes extending maternity protections, which limit dismissal circumstances, for the first six months after returning to work from maternity leave.
• An enhanced anti-harassment duty on employers: Employers will be required to take all reasonable steps to prevent sexual harassment at work. The duty is also extended to third-party harassment.

The Bill reflects the government’s commitment to reduce restrictions on trade union activity “ensuring industrial relations are based around good faith negotiation and bargaining” (UK government: Next Steps to Make Work Pay, October 2024).  The changes include wider rights of workplace access for trade unions, lower thresholds for trade union recognition, accompanied by a requirement to provide workers with a written confirmation of their right to join a trade union.

The Bill also introduces:

• A new Fair Work Agency (FWA): This agency will consolidate existing enforcement bodies, simplifying the system and providing clear guidance for businesses. It will have powers aligned to other agencies which are likely to mean penalties and the ability to name employers publicly for non-compliance.
• Enforcement of holiday pay: This ensures all workers receive their rightful holiday entitlement, promoting fairness and preventing exploitation. This will be enforced by the FWA albeit we must await detail on how this will be structured.
• Strengthened Statutory Sick Pay: The lower earnings limit will be removed (meaning low paid workers will now receive sick pay), and the waiting period will be scrapped, meaning SSP will apply from the first day of absence.

These changes are designed to create a more level playing field and reinforce the government’s commitment to safeguarding workers' rights.

The FWA will consolidate existing enforcement functions under one roof. This includes overseeing minimum wage compliance, statutory sick pay, the employment tribunal penalty scheme, and tackling labour exploitation and modern slavery. Additionally, the agency will introduce and enforce holiday pay policy, ensuring comprehensive protection for workers.

By creating a single, recognisable entity, individuals will have a clear point of contact. This streamlined approach is anticipated to enable a more efficient and effective use of resources, allowing for greater impact in upholding workers' rights. It has also been confirmed that the FWA will be given broad powers to take decisive action against those who are not compliant with the rules.