Employment Rights Act receives Royal Assent

Under the Act, employees will obtain ‘Day 1’ rights to paternity leave, unpaid parental and bereavement leave - allowing 32,000 more fathers and partners each year to take paternity leave and 1.5m more parents to take unpaid parental leave, according to the Government.

Alongside this, there will be “enhanced protections” against dismissal for pregnant women and new mothers.

Meanwhile, strengthened Statutory Sick Pay (by removing the lower earnings limit) will mean 1.3m workers will now be able to take time off when they are unwell without worrying about being paid, the Government suggested.

The number of workers on zero hours contracts has risen over the past decade to over 1 million.

The Government said: “These workers, who are often the lowest paid in society, will now benefit from new protections against exploitative contracts – ranging from the right to a contract that reflects the hours they work, to compensation if their shifts are cancelled at short notice.”

Further, while people used to have to wait two years before being protected from unfair dismissal, they will now be entitled to this right six months after starting a new job.   

According to the Government, the changes will be introduced “gradually” over a two-year period, while it continues to consult with businesses, trade unions and civil society.

Prime Minister Keir Starmer said: “Today we have proved what a pro-business, pro-worker government can achieve – a modern framework for worker’s rights.” 

“This Act sets in motion an increase in living standards, supporting productivity and importantly, more security and dignity for people in work.” 

“When we said we’d bring work into the 21st century, we meant it – and today we’ve delivered it.”

Secretary of State for Business and Trade, Peter Kyle said: “The landmark Employment Rights Act will transform workplace law for the 21st century – bringing stronger protections and the fairness every worker deserves.  

“We believe this change is a vital part of creating and maintaining good jobs and fair pay. This government is championing responsible businesses, driving fair competition, and creating a future where hardworking people enjoy real security and opportunity.  

“We will deliver this change in partnership with businesses, trade unions and civil society.” 

Lee Ashwood, Partner in employment at law firm Browne Jacobson, said: “While the Employment Rights Act represents the most comprehensive overhaul of UK employment law in decades, its challenging passage through Parliament has somewhat watered down the original Bill’s promise to fundamentally reform workers’ rights.

“In particular, the government has been forced to make compromises on key proposals such as ‘fire and hire’ and unfair dismissal protections, while there is still some uncertainty on how other key reforms will look given there are more legislative steps to take."

Ashwood added that most of the changes in the law require commencement regulations to bring them into force and many require further substantive regulations, together with associated consultation before they can be brought into effect.

“Therefore, some of the biggest changes – including to collective redundancy consultation, guaranteed hours contracts and unfair dismissal – won’t come into force until 2027. Equally, the final detail of the secondary legislation may be impacted by the responses to the various consultations," he said.

Ashwood added: “That said, the Employment Rights Act still delivers significant impacts on employees and their employers across all sizes and sectors. Its 28 major reforms will reshape worker protections across England, Scotland and Wales by strengthening employee security, tackling exploitative practices and modernising workplace rights.

“For employers and HR professionals, this legislation requires a reassessment of employment practices across all sectors. Organisations should be reviewing and updating their policies and procedures covering a wide range of areas, including recruitment, probationary periods, disciplinaries, collective redundancies, trade union relations, non-disclosure agreements and protection from workplace harassment.”