What the Employment Rights Act means for your job

Employment law reforms giving workers immediate sick pay and parental leave rights from the day they start a job are now live.

One of the Labour government’s flagship pieces of legislation is the Employment Rights Act, which aims to give employees ‘day one’ rights rather than having to wait to pass a probation.

The legislation was first unveiled in Parliament in October 2024, putting forward 28 workplace reforms. This is on top of other changes that businesses have to content with such as the rising minimum wage and tax hikes.

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But not all parts of the original proposals have made it through parliament.

Proposed immediate protections from unfair dismissal have been removed during the amendments stage.

The government had previously promised a “right to switch off” to ban bosses from contacting staff outside office hours, but that did not appear in the legislation despite queries from MPs during debates.

There were reports that this legislation would ban the practice of staff being contacted out of hours or on weekends by their bosses but the government has since suggested there will be a Code of Practice on the issue.

The government claims the changes will help more than 18 million workers.

A new Fair Work Agency has also been launched where workers can report poor treatment such as unfair pay and poor working conditions.

Here is what the Employment Rights Act could mean for your job.

Day one rights

Under current employment laws, staff are protected against unfair dismissal after two years and may only qualify for certain benefits after a few months or even years.

Rather than waiting to pass a probation period, staff will have rights from day one for paternity, parental and bereavement leave.

Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in, the government said.

Pregnant women and new mothers returning to work will also be protected from dismissal whilst pregnant, on maternity leave and within six months of returning to work.

Business Secretary Peter Kyle said: “Day one rights mean exactly that: rights that are there for you from the moment you start a job, and from the moment you get sick.

“Whether you’re a low-paid employee who’s been forced to work while unwell, or a new parent who wants to be there for their family, these changes are for you. We’re delivering the most significant upgrade to workers’ rights in a generation.”

However, the legislation was set to remove the existing two-year qualifying period for protections from unfair dismissal, making it a ‘day one’ right, but that has been watered down following lobbying and will now apply after six months.

Trade unions are not happy about this.

Unite general secretary Sharon Graham said: “The Employment Rights Act is a shell of its former self. These constant row backs will only damage workers’ confidence that the protections promised will be worth the wait. Labour needs to keep its promises.”

A right to flexible working

Working from home or more flexibly has become popular since the pandemic but there is currently no legal requirement for employers to support this.

The Employment Rights Act will let staff ask for flexible working from day one and an employer can only reject the request if they can prove it’s unreasonable.

Additionally, the Employment Rights Act will require large employers with 250 or more employees to produce Equality Action Plans on how they will support staff going through the menopause.

The government will also publish guidance to help smaller employers make changes in the workplace such as better uniforms to help with hot flushes, flexible working and recording menopause-related leave and absence.

“From an employee perspective flexible working typically improves motivation, especially for colleagues motivated by autonomy,” says Carole Gaskell, a leadership expert at business consultancy Full Potential Group.

“This is something we see the multi-generational workforces struggling with. The younger generation are more vocal and decisive about ensuring they get their need for flexibility met."

What will the Employment Rights Act mean for businesses?

The Department for Business and Trade said the reforms will “benefit millions of working people, including some of the lowest paid workers.”

It does mean extra admin for employers though on top of minimum wage rises announced in the Autumn Budget, but increasing statutory sick pay, and maternity and paternity pay will at least impose no additional costs as it is paid by the government.

There are warnings that the new requirements may make employers more wary about taking on staff.

“Whilst the changes are positive for employees there is a risk that the changes will not have the desired effect of boosting levels of employment and living standards,” says Vicky Schollar, head of employment at law firm Gardner Leader.

“Although larger employers may be able to absorb the additional costs associated with the changes, smaller employers are likely to struggle. This along with the introduction of day one rights for unfair dismissal and strict rules on probationary periods may lead to a downturn in recruitment and, in turn, hamper business growth.

“There is also a risk that employers will see an increase in claims for unfair dismissal, leading to more time and costs in dealing with them.”