New regulations are boost for zero hours workers and trade union rights but are ‘somewhat watered-down’

Employers will claim lack of clarity and flexibility present risk to productivity

Responding to the Employment Rights Bill announced by government today, Robert Holland, Head of Employment Law at Aberdein Considine said: “The Bill unveiled today is undoubtedly the biggest employment rights shake-up since the 1999 Employment Relations Act 25 years ago, and in legislative length only matched by the 1975 Employment Protection Bill. However, it is clear the government has drawn back on a number of measures and concentrated a lot of the Bill on public policy and trade union rights and recognition.

“The much-rumoured removal of the two-year qualifying period has been enacted, meaning claiming unfair dismissal is now effectively a day one right for employees, and requires employers to justify any dismissal using one of the five fair reasons to dismiss: conduct, capability, redundancy, some other substantial reason (SOSR), or statutory regulation or restriction.

“But that doesn’t mean employers can’t – or won’t – continue to dismiss employees; this is where probation periods come in. The Bill sets out the government’s intention to consult on the introduction of a new ‘statutory’ probation period, and effectively provide a ‘light touch’ right to dismiss during this initial period, although the Bill doesn’t make clear the rationale that will be required.

“Naturally, trade unions and other workers’ rights groups were calling for a ‘claim free’ probation period of as long as a year, much longer than the three- to six-month period most organisations currently employ. The government has a delicate balance to strike between protecting employees from unfair dismissal and, at the same time, protecting employers from being forced to retain employees that are genuinely unsuitable for their role. It seems as yet they have not made up their minds on which way to lean.

“The Bill also provides a boost to those on zero hours contracts, including guaranteed hours and compensation for cancelled shifts, but falls short of an outright ban, which may disappoint some. But many workers – especially those in the gig economy, like delivery and taxi drivers – want, and even need, the flexibility of being able to check in and out of work as and when suits them. It will be interesting to see how such companies address the new requirements, to ensure these industries remain viable.

“Many of the measures announced today will not take immediate effect, instead being subject to lengthy consultations, with day one right not to be unfairly dismissed not expected to be enacted until August 2026, which again is a watering-down of the government’s previous suggestions. The announcement still signals the government’s intention to substantially evolve employees’ rights, but employers are sure to receive them with scepticism, as they now must work to figure out how they will comply with the new requirements, while avoiding the real risk of decreases in productivity and flexibility. The next month will see employers and employee representatives alike trying to clarify the new landscape in the employment space.”