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Second Reading of the Employment Rights Bill

Published: 27 Mar 2025

Photo of the Houses of Parliament

As the Employment Rights Bill returns to Parliament for its second reading in the House of Lords, led by Baroness Jones of Whitchurch, the Government minister responsible for the Bill in the Lords, Working Families now has the opportunity to assess its contents and the expected changes it will bring. The Bill remains subject to change and amendment as it continues through the parliamentary process. As it progresses through the legislative process, we will continue to provide updates on any significant changes, as well as its final passage into law.

This guide focuses on the employment rights aspects of the legislation, as they relate to working parents and carers. While we acknowledge that the Bill also introduces significant changes related to union activity, analysis of those provisions is provided by organisations such as the TUC rather than Working Families.

Changes made when the Bill becomes law are not expected to take effect until at least Autumn 2026.

Key Legislative Changes for Workers’ Rights

Zero-Hours Contracts

The Bill aims to ban exploitative zero-hours contracts by requiring employers to offer qualifying workers guaranteed hours based on their regular work patterns; making it easier for parents to plan their lives around their jobs. The Bill also includes provisions for reasonable notice of shifts and shift changes, giving parents more control over their time and reducing the stress of last-minute schedule changes. While it doesn’t eliminate zero-hour contracts, it shifts more control to employees, allowing them to better balance work and family commitments. These changes are designed to create a more supportive and flexible work environment for parents, helping them manage their responsibilities more effectively.

Flexible Working

The Bill introduces changes that will make it harder for employers to refuse flexible working requests outright. Employers will only be able to refuse a request if it is reasonable for them to do so, and they must give the grounds for the refusal and provide an explanation as to why their decision is reasonable, going beyond just stating a business reason. 

Whist we expect parents and carers will welcome these changes, at present, employers can still rely on the same 8 business reasons to refuse requests and no changes have been made to the compensation limit for a successful claim if an employer fails to comply with legislation (eight weeks’ pay capped at statutory limits). This means that unless the employee is making a flexible working request for a reason related to a protected characteristic under the Equality Act 2010, such a claim is unlikely to lead to high compensation awards.

Unfair Dismissal

Changes to unfair dismissal law will provide greater job security from the very start of employment by abolishing the current 2-year qualifying period to claim unfair dismissal. Although the precise details are not yet known, it is expected that there will be a simplified procedure by which an employer can lawfully dismiss an employee during the first 9 months of their employment, but following this initial period, employees will be protected in full against unfair dismissal.

The government is expected to carry out further consultations about how this reform will work in practice and what compensation schemes will apply.

Rights for parents

The Bill seeks to strengthen parental rights by expanding leave entitlements. This will see parents be able to take unpaid parental leave and Paternity Leave from day one in their employment.

There are proposals for greater protections for maternity returners. Where currently in redundancy situations, women have the right to be offered suitable alternative employment (if available) once they have told their employer they are pregnant and for up to 18 months after their child was due to be born, the Bill would extend this protection to other dismissals and other forms of family leave.

Bereavement leave provisions are expected to be extended to introduce a day 1 right to Bereavement leave for employees where the death relates to other family members, and for pregnancy loss before 24 weeks.

Further details are expected as the regulations that would enact these change are drafted.

Sick Pay

Employees will be entitled to statutory sick pay (SSP) from the first day of illness, rather than after the current 4 day waiting period. All eligible employees, regardless of earnings, will be entitled to SSP and those learning less than £123 per week (£125 from April 2025) will have a right to SSP at a rate of 80% of their weekly earnings.

Protection from “Fire and Rehire”

The Bill aims to curb the practice of dismissing and rehiring employees in order to change terms and conditions. Dismissal would be automatically unfair where the reason is that the employee did not agree to the employer’s attempt to vary their terms and conditions of employment, or because they intended to employ another person on varied terms to carry out substantially the same role. There would be a limited qualified exception where the employer is facing financial difficulties affecting their ability to carry on business as a going concern. 

Creation of the Fair Work Agency

The Bill provides for the delegation of certain powers, such as the enforcement of minimum wage, holiday pay and sick pay, to a new public authority; expected to be called the Fair Work Agency. Discussions are ongoing as what precise powers the agency would have, and how it would be funded, but it is expected to play a key part in enforcing workers rights within the UK.

Changes Still Under Review or Removed from the Bill

  • The ‘Right to Switch Off’ provision, which was initially expected to be included, does not appear in the Bill. Some reports say that this provision has been dropped, however, this has not been confirmed in our conversations with the government.
  • The government have acknowledged that the current parental leave and pay system is inadequate to support working parents and whilst there’s nothing in the Bill as it stands, a full review of parental leave and pay is expected as well as consideration of the introduction of paid carers’ leave.