The Employment Rights Bill was published in October 2024 has completed its third reading in the House of Commons and is now at the Committee stage in the House of Lords. The Bill is expected to receive Royal Assent at the end of 2025, with many of the provisions likely to take effect in 2026.
Overview
Its key provisions include day-one employment rights, the banning of exploitative zero-hour contracts, the ending of unscrupulous “fire and rehire” and “fire and replace” tactics, enhancing flexible working, strengthening worker’s protections, introducing mandatory equality action plans for large employers and addressing gender pay gaps.
Statutory Sick Pay
SSP will become a right from the first day of sickness absence, abolishing the current three-day waiting period. The requirement for employees to earn above the lower earnings limit (currently £123 per week) to qualify for SSP will be removed. Instead, low earners will receive either 80% of their average weekly earnings or the prevailing SSP rate, whichever is lower. These changes are expected to entitle around 1.3 million more workers to SSP for the first time. There is no amendment to extend SSP to self-employed individuals. The requirement for medical evidence remains unchanged—still only needed after the first seven days of absence. These reforms are designed to prevent workers, especially those on lower incomes, from having to choose between working while ill or losing income.
Zero Hours Contract Workers
Zero-hours and low-hours workers will have the right to request a contract that reflects the number of hours they have regularly worked during a defined period, expected to be 12 weeks. Following criticism of a potential loophole, the Bill has been amended to extend these rights to agency workers as well as directly employed workers. The end hirer (the company where the agency worker is placed) will be responsible for offering guaranteed hours contracts to qualifying agency workers. Both the employment agency and the end hirer must provide reasonable notice of shifts. Employment agencies must pay compensation for short-notice cancellations or changes to shifts. Parties may contract out of the guaranteed hours requirement through a collective agreement with a trade union. Businesses can offer temporary contracts where there is a “genuine temporary work need,” with further details to be set in secondary legislation. These amendments aim to close loopholes and ensure that agency workers are not excluded from protections against exploitative zero-hours contracts.
Conclusion
The Employment Rights Bill is advancing through Parliament with significant amendments to expand access to statutory sick pay and to guarantee more predictable hours for zero-hours and agency workers. These changes are expected to have a substantial impact on both employers and workers, particularly those in lower-paid and insecure roles.
Barbara Zeitler