Long-awaited reforms to parental and bereavement leave, sick pay, and unfair dismissal rules will be laid before Parliament today under the new Employment Rights Bill
Millions of workers will get protections from their first day in the job from next year under the biggest shake-up of employment rights in a generation.
Long-awaited reforms to parental and bereavement leave, sick pay, and unfair dismissal rules will be laid before Parliament today under the new Employment Rights Bill.
Deputy Prime Minister Angela Rayner said: “After years of stagnation under the Tories, we’re replacing a race to the bottom with a race to the top, so employers compete on innovation and quality. It’s by making work more secure and modernising workplaces that we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people.”
She said the Government was “calling a time on the Tories’ scorched earth approach to industrial relations” with reforms that are pro-worker and pro-business. The bill would change the law to make flexible working the default option and establish immediate rights to paternity, parental and bereavement leave.
Sick pay will be available from the first day of illness, ending the standard three-day waiting period which leaves workers struggling. 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 day one right.
The changes would help an estimated 1.7 million people who are out of the labour market because they are looking after family.
The new legislation will ban exploitative zero-hours contracts, and offer guaranteed hours to more than a 1 million workers who are on insecure contracts. People would be given notice on their shifts and if it’s cancelled or cut short, they would be entitled to a payment.
Businesses will also be banned from unscrupulous fire and rehire practices.
Some 9 million workers will also benefit from a shake-up of rules around unfair dismissal, with the two-year qualifying period scrapped. Instead the Government will consult on a nine-month statutory probation period for new hires instead, which is expected to come into force in 2026.
A new Fair Work Agency will be created to enforce holiday pay for the first time and strengthen statutory sick pay. Other commitments like the right to switch off, allowing workers to avoid being bombarded by their bosses out of hours, will be brought in using existing legislative powers.
The news was welcomed by trade unions, who hailed a “seismic shift” away from the Tory low-pay, low-productivity economy. TUC general secretary Paul Nowak said: “After 14 years of stagnating living standards, working people desperately need secure jobs they can build a decent life on.
“Whether it’s tackling the scourge of zero-hours contracts and fire and rehire, improving access to sick pay and parental leave, or clamping down on exploitation – this Bill highlights Labour’s commitment to upgrade rights and protections for millions. Driving up employment standards is good for workers, good for business and good for growth.
“While there is still detail to be worked through, this Bill signals a seismic shift away from the Tories’ low pay, low rights, low productivity economy.”
Matt Wrack, Fire Brigades Union general secretary, said: “The banning of zero-hour contracts, the outlawing of fire and rehire, and other despicable working practices promoted by the Tories, are long overdue.”
Gary Smith, GMB general secretary, said: “This is a significant and groundbreaking first step to giving workers the rights they’ve been denied for so long. Fourteen years of Conservative rule has seen squeezed pay packets and attacks on working people and their unions; this Bill is hugely welcome.”
But Tina McKenzie, Policy Chair at the Federation of Small Businesses, said it would make firms reluctant to hire new staff. She said: “This legislation is rushed job, clumsy, chaotic and poorly planned – dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.
“Beyond warm words, it lacks any real pro-growth element and will increase economic inactivity, seriously jeopardising the Government’s own 80 per cent employment target. There are already 65,000 fewer payroll jobs since Labour took power, and the new Government is sending out a troubling signal to businesses and investors.”