The UK government has published a policy paper on Implementing the Employment Rights Bill, setting out its planned timetable for further consultations and the implementation of various measures set out in the Employment Rights Bill; which is currently working its way through Parliament. The measures in the Employment Rights Bill, once they become law, will see a number of fundamental changes to employment law in England, Scotland and Wales, including the introduction of day-one unfair dismissal rights for employees and changes to Statutory Sick Pay.
FSB’s Westminster team continues to outline to the Government the issues these changes in employment law will have for small businesses and have worked with the House of Lords to make amendments to the Bill, which would mitigate the damage. While we will try our best to argue for these changes to remain in the Bill, it is unfortunately likely that the Government will remove them.
As is typical for employment legislation, the detailed policy of the measures set out in the Employment Rights Bill will be set out in secondary legislation or regulations, supported by Codes of Practice and guidance. Given the huge scope of the bill, the new legislation will be introduced under a phased approach.
Under its Roadmap, the Government has confirmed that the following new employment changes, among other measures, are planned to come into effect under the following proposed timetable. This timetable is subject to change depending on the outcome of consultations and the implementation of secondary legislation and regulations to bring the measures into effect:
April 2026:
1. Increase in the maximum period of the collective redundancy protective award. This is the award which an employment tribunal may order an employer to pay to its employees for larger scale redundancies, where the employer has failed to inform and consult the employees' representatives when proposing to make 20 or more employees redundant in a 90-day period.
2. Day one rights to paternity leave and unpaid parental leave (the current 26-week qualifying period for entitlement to paternity leave pay will remain in place). Currently, employees need to have been employed for one year to be eligible for unpaid parental leave.
3. Establishment of the Fair Work Agency. This new public body will have new powers to enforce employment legislation and inspect employer records and issue notices of underpayment, including for the payment of the National Minimum Wage and payment of holiday pay; as well as new powers to bring employment claims on behalf of workers.
Removal of the lower earnings limit and waiting period for Statutory Sick Pay (SSP) across the UK. This means that SSP will be payable from day one of sickness absence (by removing the current three-day waiting period) and will remove the lower earnings limit for SSP. Those who earn less than the lower earnings limit (currently £125 a week) will become entitled to SSP at a rate of 80% of weekly earnings. FSB has made clear its concerns about the financial impact the widening of SSP will have on small business employers in particular and has continued to lobby the Government for an employer rebate on SSP to help small business employers manage the costs of SSP.
October 2026
The following provisions are expected to come into force:
1. Ban on dismissal and re-engagement (fire and re-hire), which is the process of dismissing employees and re-employing them on new contractual terms and conditions in relation to restricted variations involving pay and working hours. Similar measures will be introduced in Northern Ireland.
2. Requirement for employers to take “all reasonable steps” to prevent sexual harassment (rather than simply “reasonable steps” as currently) and a new requirement for employers to prevent third-party harassment of employees i.e. sexual harassment by clients, suppliers and customers of the employer. Since the introduction of new legislation in October 2024, employers have been required to take “reasonable steps” to prevent sexual harassment of employees and workers by their colleagues in the course of their employment (see the fact sheet on ‘Sexual harassment’ on the hub). Currently, employers are not directly liable if their employees are harassed by customers/clients or other third parties.
3. Extension of tribunal time limits to six months. Currently, there is a three-month time limit for bringing most employment tribunal claims
4. Duty for employers to inform workers in writing of their right to join a trade union.
5. New rights and protections for trade union representatives.
6. Strengthening of trade unions' rights of access to workplaces. This includes digital/virtual access. Currently, there is no general right for trade unions to access workplaces for recruitment and organisation of members. Exceptionally unions can currently only come onto an employer’s premises if the employer agrees.
2027
Measures that are expected to come into force in 2027 include:
1. Day one right to protection from unfair dismissal. Currently, in most cases, employees need two years’ continuous employment with their employer to claim unfair dismissal (with the exception of certain automatically unfair dismissals and discriminatory dismissals, which don’t require a minimum period of employment).
2. Zero hours contracts measures for zero hours and low hours contract workers and agency workers, including the duty to offer guaranteed hours contracts, provide reasonable notice of shifts and pay compensation for cancelled, moved or curtailed shifts. Similar measures will be introduced in Northern Ireland.
3. Increased rights for pregnant workers. The proposal is to ban dismissals of women who are pregnant, on maternity leave, and during a six month return to work period, except in specific circumstances.
4. Day one right to (unpaid) bereavement leave. Currently, there’s no general statutory right to bereavement leave for employees unless an employee’s child dies under the age of 18, or is stillborn after 24 weeks of pregnancy, whereby statutory parental bereavement leave and pay may apply. There is also currently a right to unpaid reasonable time off for family and dependants in an emergency.
5. Day one right to (unpaid) bereavement leave for pregnancy loss. Currently, there is no entitlement to leave for pregnancy loss that takes place before 24 weeks.
6. Introduction of a new statutory duty for employers to act reasonably when refusing employee flexible working requests.
The government will provide more detail on its policies and timelines for implementation following consultations on the proposed measures.
Earlier this year, FSB research revealed that 92% of small employers fear some of the proposals under the Bill (including day-one unfair dismissal rights) will lead to job losses, with 67% planning to hire fewer staff. FSB is concerned that the Bill's provisions, including changes to unfair dismissal laws and Statutory Sick Pay, could deter hiring and exacerbate the UK’s benefits bill, ultimately impacting living standards across the UK. FSB is concerned that if employers fear they will be sued, fewer will hire - with knock-on effects including a rising benefits bill and a lasting drag on living standards across the UK.
Significant changes in employment law in Northern Ireland are proposed in the ’Good Jobs’ Employment Rights Bill. The Department for the Economy of Northern Ireland has responded to its consultation on the Bill.
In addition to guidance and template documents on current employment law requirements, FSB members can find a summary and analysis of the proposals under the Employment Rights Bill in the ‘Employment Rights Bill’ fact sheet on the FSB Legal and Business Hub.