The Employment Rights Bill (ERB), the Government’s flagship Bill proposing significant changes to employment law, completed its Committee Stage in the House of Commons on 16 January 2025. The Committee considered the draft ERB alongside more than 200 proposed amendments, mostly put forward by the Government. All the Government’s amendments were approved by the Committee. Most significantly, these proposals included amendments extending the limitation period for individuals to bring employment tribunal claims from three to six months.
Key provisions of the ERB are:
New leave entitlements
Carer’s leave – introducing remuneration
In April 2024, the previous Conservative Government introduced a right to one week’s unpaid carer’s leave. Within the ERB, the new Government proposes to review the implementation of this policy and examine all the benefits of introducing paid carers’ leave. If passed, expanding the carer’s leave entitlement will be a further financial consideration for businesses to cover and consider how to best manage these arrangements. Further detail with be required before this is passed. While Carers UK have called for paid carer’s leave to cover up to 10 days, the Government has not suggested whether this will be the case.
The concept of “caring” is also proposed as an additional protected characteristic under the Equality Act 2010. This amendment would provide protection against discrimination for someone providing care to, amongst others, a spouse/civil partner, child or parent who has long-term care needs.
Extending Paternity Leave
Another family-friendly right proposed is extending paternity leave to support working families. The amendments seek to remove the requirement for employees to have 26 weeks’ continuous service before being eligible for statutory paternity leave.
The amendments also propose further flexibility for employees taking shared parental leave. This will result in businesses being required to also be flexible and consider how to manage their staffing levels during these periods of family related leave. Ultimately however since paternity leave is still capped for a maximum of two weeks, and many employees do not take parental leave because it is unpaid, it seems unlikely that there will be a significant impact on businesses from this change.
Kinship Care
Currently, kinship carers do not have any specific entitlements at work (beyond that of the entitlements under the general carer’s leave). Kinship care is where a child lives full-time or most of the time with a relative or family friend, usually because their parents are unable to care for them. The Government’s amendments propose at least 52 weeks’ unpaid leave for those who meet the kinship criteria. Kinship carers would be entitled to the same terms and conditions of employment that they would have been but for the leave (save for remuneration) and entitled to return to the same or similar role.
The impact will have limited financial implications for businesses to consider, as it will be unpaid leave. It does however expand the number of potential employees taking periods of family related leave, and so managing staffing levels during those periods will be a consideration for businesses.
Stronger worker protections
One of the significant changes proposed relates to removing the two-year qualifying period for employees to bring unfair dismissal claims against their employer.
The proposed change will give greater meaning to probation periods and will provide greater job security to individuals who have completed their probation period. Although not in the current amendments to the Bill and it is subject to Government approval, it has been suggested that statutory probation periods will be capped at nine months. During this probation period the employer could terminate employment or serve up to three months’ notice to terminate an individual, for performance or conduct reasons, by following a lighter-touch procedure.
Widening the potential number of individuals eligible to bring an unfair dismissal claim will likely increase the number of employment tribunal claims. The introduction of a day one right for all employees means businesses will need to carefully consider dismissal at the start of an employment relationship, especially if the probation period has passed. It will be important to ensure that all new starters have a probation period included in their employment contracts and that processes are implemented to ensure regular employment performance reviews. Employers will need to review disciplinary and dismissal policies and processes, and ensure managers are trained on managing conduct and performance issues. It will mean using probation periods will become of more importance to employers.
The circumstances in which an employee would be considered to be unfairly dismissed after making a protected disclosure will be extended. Whistleblowers already have a day one right to claim unfair dismissal if the reason for their dismissal was because of protected disclosures made. A proposed amendment being considered is that a complaint of sexual harassment at work will be treated as a protected disclosure under whistleblowing legislation. The change does not mean that any complaint about sexual harassment automatically counts as whistleblowing, but it will be another element for employers to consider during dismissals.
What does this mean for SMEs?
The Employment Rights Bill (ERB) will progress to its Report Stage, where further amendments may be considered, and a third reading. No dates have yet been set for those stages. We do not yet know when these changes will come into effect, however, we do know that the focus of the ERB is to expand on worker protections, rather than consider how the proposals may impact businesses.
Considering these proposals, businesses should take practical steps to prepare for these changes, if any come become law. A few points for businesses to consider include:
- Regularly updating and reviewing their policies to ensure they remain fit for purpose and are compliant with the changes in law;
- Keeping up to date with the new regulations and any changes which they need to implement within their business to ensure legal compliance; and
- Training employees to ensure awareness of the new legal protections for workers and employees and forecasting ahead with the potential increased costs related to this for businesses.
Pictured: Emily Morrison, Associate Solicitor and Alia Javid, Trainee Solicitor in the Employment Team at SA Law
