“If this Bill is implemented as it stands, which is perfectly possible, it’s nothing short of a revolution. It’s a game changer and it’s going to be the biggest change in employment law for a generation.”
Earlier this week, experts from Rising Edge and Browne Jacobson LLP delivered a market briefing to update brokers on the recently unveiled Employment Rights Bill – and what it could mean for their clients. The bill is scheduled for implementation in 2026, noted Raymond Silverstein (pictured centre), head of employment, London, for Browne Jacobson LLP, but with 2025 on the horizon, now is the right time to think about what it means.
The bill, which is going through Parliament, contains 28 Employment Law reforms and one that should be high on the radar of employers, and their brokers, is the introduction of day-one protection for ordinary unfair dismissal. That represents a significant change from the current state of affairs, wherein an employee has to be employed for two years in order to claim unfair dismissal.
The transformative bill also talks about the end of ‘fire and rehire’ wherein an employer replaces an existing employment contract with a new one that’s less beneficial, under the threat of the employee losing their job if they don’t sign the new agreement. It’s a practice which has come under fire in the Press, particularly given that some of the larger employers have been using it quite extensively. Under the proposed new law, the practice will still be permitted - but only in extreme situations where it’s a matter of the survival of the company.
“An area that has received a lot less Press interest is that of collective redundancy rights,” Silverstein said. “I think this is interesting because, currently, an employer only needs to consult on a collective basis, oftentimes with trade unions, if it is proposing to make 20 or more employees redundant at one establishment – which is one office, or one shop, effectively in one workplace.
“What the bill is saying is that when an employer is proposing to make redundancies, it’s about the grand total of people at risk across the organisation. It’s not workplace-by-workplace, you gather everybody together and if it’s 20 or more people, you have to consult on a collective basis, oftentimes with the trade union. And that is a major change, if that comes into effect, which it probably will.”
Another component of the bill pertains to protection from third-party harassment, which goes beyond sexual harassment to include race, age, sex and disability. There are also a lot of pro trade union changes in the bill that would look to reverse a lot of the breaks put on trade unions by the previous government in terms of their involvement, recognition etc.
“So, there’s a lot in this bill,” he said. “Consultation starts next year, and we're expecting it to come into effect in 2026. The government has to conduct an impact assessment on the bill, and its own impact assessment has predicted a 15% increase in tribunal claims, as a result of these changes.” Silverstein suspects the actual increase is likely to be higher than that estimate, which he noted is further complicated by the fact that the tribunal system in the UK is already “underwater”.
“I think, if the tribunal system gets another 15% or 30% of claims coming through, that’s going to be pretty messy,” he said. “The same government impact assessment has also estimated that these changes will cost UK employers overall £5 billion a year in terms of implementing, educating and dealing with them.”
Exploring the day-one unfair dismissal piece further, he said the UK is likely to mirror what’s happening across EU countries at the moment, where you have a probationary period during which you have rights as an employee, but not the full set. The UK is likely to adopt that model of an initial probationary period wherein after it’s completed, you have complete unfair dismissal protection. However, he noted that the new law on unfair dismissal will likely cement how long a probationary period is allowed to be – with his estimate hitting the six-month mark.
Part of Silverstein’s clear warning to employers and their brokers alike is that many are not aware of, or have forgotten, what they knew about unfair dismissal. A particularly surprising fact is that one in 10 people have never remained with the same employer for more than a single year. As a result, a lot of employers have never been in the position of facing a charge of unfair dismissal. So, the pressure is on employers to educate themselves ahead of the rollout of this legislation, particularly given that the burden of proof for unfair dismissal is on the employer.
So, what should employers do – and what should brokers be encouraging them to think about? For Silverstein and his team, the first is better recruitment practices. “You can’t just bring people in thinking you’ve got two years to try them out and you’ll just see how it goes,” he said. “No, you’ve got to be more scientific, you’ve got to be more careful.”
The second consideration is around probationary periods which too few employers take seriously enough because, previously, they had that protection of the two-year unfair dismissal period. Employers now need to manage their probationary periods and procedures much more carefully and to educate their managers on what a successful probationary period looks like because it is going to matter. In order to manage effectively, managers need to be given the right guidance and training.
More employee rights inevitably bring more risks for employers, which is especially true because employers have had it relatively very easy for a long time. The future of employment law is going to look very different, Silverstein said. “When unfair dismissal was first introduced years ago, there was an initial period of six months of no protection. Then it went up to one year, then up to two years. I think it’s been a long time since many employers have had to think about unfair dismissal - but it’s coming back in a big way.”
