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The new Employment Rights Bill introduces sweeping statutory reforms, redefining dismissal protections and employer obligations. Business owners must be on the ball warns Adam Bernstein

When it took the keys to Number 10, Labour made improving rights for employees a key priority. It was no surprise, then, that three months and six days into the government’s tenure that a new Employment Rights Bill was introduced. 

The bill brought forward many proposals that had been promised in the manifesto such as an effective end to zero hours contracts, new redundancy rights, changes to trade union law including new safeguards against dismissal and clearer rules on picketing and balloting procedures. 

Beyond these changes there will be more family rights with the right to take unpaid parental leave and paternity leave from day one right and a new right to bereavement leave. 

In terms of statutory sick pay (SSP) and holidays, SSP will become payable from the first day of sickness; the lower earnings limit will be removed; new rules will require employers to keep clearer records of working hours and holiday accrual to ensure compliance with working time regulations. 

However, there will also be major changes to the law in relation to dismissals. 

This last category has the potential to create the most trouble for those running a pharmacy; the bill specifically proposes severely curtailing ‘fire and rehire’ and ‘fire and replace’ and more importantly, removes the two-year qualifying period before an employee gains unfair dismissal protection. 

Such dismissals are known as ‘short service dismissals’ and have been abused by some employers who dismiss staff just before the two-year bar. 

Nothing will change in relation to automatic dismissals which are prescribed in law for dismissals based on pregnancy, maternity leave, trade union membership, whistleblowing, asserting a statutory right (say, requesting flexible working), or discrimination based on protected characteristics (race, sex, disability, etc.). 

When the bill is enacted, employees will gain the right from day one not to be unfairly dismissed. The bill recognises that employers need some protection too against bad hires. Consequently, there is likely to be some form of process to allow a ‘light touch’ dismissal during an initial probationary period. However, this period is as yet undefined, but the government is thought to prefer nine months. This period will not apply to redundancies. 

But what will the new unfair dismissal landscape mean in practice? 

Well, the change is big. Consider that since the right to claim unfair dismissal became law in 1971, the qualifying period to bring such a claim has ranged from between six months and two years. It has never been a day-one right.  

People Management thinks that “a day-one right to unfair dismissal has significant consequences for businesses.” 

Employers are going to be more careful and restrictive. A May 2025 report from the Institute of Directors referred to an October 2024 survey that it ran on the topic. It detailed comments from members including: “We take a chance with some slightly unusual candidates who on paper may not fit the job spec. This is often very successful – but in around 25 per cent of cases we do have to let them go. This [policy] will tighten up our recruiting culture and lead to marginalised candidates not getting a chance.”

However, an October 2024 report from the Institute for Public Policy Research, written in conjunction with the TUC and Persuasion UK, found that “a significant majority of managers (66 per cent) think giving employees protection from unfair dismissal… on the first day of employment would have a positive impact on their business.” 

The IPPR reckons that the change would “make employees healthier, happier and more engaged” and would “provide employees with more security and predictability in their life.” 

The change to unfair dismissal law might on paper seem to help employees, but in reality, it may affect those candidates on the fringe of the labour market who might struggle to find work. 

Only time will tell what the change will bring. As for when the different elements of the legislation will take effect, in July the government published a policy paper, Implementing the Employment Rights Bill: roadmap, setting out how and when new workplace rights and protections will take effect. Certain provisions are expected to come into force following Royal Assent, but other changes will be introduced in stages, with the final measures rolling out by 2027.