‘Biggest upgrade to worker rights’ or ‘chaotic rush job’?: Labour’s employment rights bill, explained

After 98 days in office, Labour has published its employment rights bill.

The landmark legislation – touted by government as the “biggest upgrade to rights at work for a generation” – includes a ban on exploitative zero-hours contracts and “unscrupulous” fire and rehire practices.

Other measures include extending statutory sick pay for millions of workers and beefing up unfair dismissal laws.

“We’re raising the floor on rights at work to deliver a stronger, fairer and brighter future of work for Britain,” deputy prime Minister Angela Rayner declared.

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But several key measures – including a plan to create a single status of “worker” to protect gig economy employees – have been left out. And many of the planned changes will be subject to a prolonged period of consultation.

Depending on who you ask, it’s a “positive new chapter” for working people, a “chaotic rush job”, or kicking the can down the road.

Lets dig into the detail.

What’s in Labour’s employment rights bill?

The government’s 150-page bill contains significant reforms – and significant omissions.

Under the new laws, millions of people will be able to get statutory sick pay from the first day they are unwell. Currently you are not eligible until the fourth day of your illness, and don’t qualify if you earn less than £123 a week.

Workers will also be entitled to parental and bereavement leave from day one.

TUC general secretary Paul Nowak hoped that these changes would bring about a “positive new chapter” for the UK.

“[They] will give workers more predictability and control and it will stop good employers from being undercut by the bad,” he said

“While there is still detail to be worked through, this bill signals a seismic shift away from the Tories’ low pay, low rights, low productivity economy.”

The existing two-year qualifying period for protections from unfair dismissal will be scrapped. However, it will be easier for employers to fire workers during a proposed nine-month probation period. The probation period will be introduced in autumn 2026 following a period of consultation.

The details of this are still vague, explained Caspar Glyn, chair of the Employment Lawyers Association.

“Day-one unfair dismissal rights are in. The two-year wait for rights is out,” he said. “But a long, perhaps nine-month probation period is in. Whether this makes day-one rights introduced with much fanfare through the front door but smuggled out the back door with a liberal probation period will depend on the wording.”

The vagueness around probationary periods is present throughout the bill. Many of the measures will be subject to further consultation, or be brought in via secondary legislation.

Fire and rehire, for example, will be banned in most circumstances. Sacking workers and re-employing them on different terms is still technically allowed, though it has been restricted except in extreme cases where a business might go bust.

The details will again be decisive, said Glyn.

“We haven’t seen the language and whether [fire and rehire] will be like getting a camel through the eye of a needle, which might strangulate business flexibility or if it will be a restriction one can drive a bus through so that the legislation is simply performative lip-service for the unions,” he said. “It is likely to fall between the two.”

Unions called for an outright ban. Sharon Graham from Unite the union claimed the bill “ties itself up in knots trying to avoid what was promised”.

“Failure to end fire a rehire and zero hours contracts once and for all will leave more holes than Swiss cheese that hostile employers will use,” she said.

Flexible working rights will be enshrined in law, with it becoming a default day-one right “where practical”. Again, it will take some years to work out what this right means in reality.

“Unless firms get good statutory guidance on this, then it will take some years of litigation and case law before business and workers know what is and what is not ‘practicable’,” Gwyn explained.

“For instance, it may be practicable for everyone to work from home but if the team is better when it meets together once a week at work will that allow the business to order its staff to work that day from the office? What evidence will be required?”

Joe Ryle, director of the 4 Day Week Campaign, welcomed this commitment, which he said might pave the way for more radical working pattern changes in the future.

“This will help to normalise new ways of working, such as a four-day working week, and relegate the traditional nine-to-five, five-day working week to a phenomenon of the past,” he said – adding that “more detail” is needed.

What isn’t in the employment rights bill?

The bill does not contain all the promises that Labour made in its “new deal for working people”. Instead, many will be part of a non-binding “next steps” document.

The right to switch off – which would stop employers contacting staff out of hours – has been postponed. So too has the commitment to create a “single status of worker”, a reform that would see Uber drivers and other self-employed gig economy workers gain rights like sick pay.

Speaking to the Big Issue before the publication of the bill, Ewan McGaughey – a professor of law at King’s College London – said any delays to this would be “very disappointing”.

“We’ve got lots of examples around the world: it’s very easy to write an amendment to the existing law to make sure that everybody, including Uber drivers, Deliveroo riders, people in the gig economy, that they’re all covered by all employment protections.”

For now, however, it appears that Labour have put the reforms in the ‘too-hard’ basket.

How will the employment rights bill be enforced?

Enforcement may prove to be the government’s biggest hurdle, said Nye Cominetti, principal economist at the Resolution Foundation.

“As well as getting the details right, the biggest challenge now is ensuring they deliver meaningful change for workers at the sharp end of our jobs market,” he said. “Employment rights are only effective if they are upheld. A lot of this package rests on the new Fair Work Agency having sufficient resources and legal teeth to ensure that all employers play by the rules.”

The bill will establish a new enforcement body called the Fair Work Agency. The watchdog will combine existing enforcement organizations and enforce rights such as holiday and sick pay.

Once again, the agency’s full responsibilities will only become clear once all the bill’s measures are consulted on.

Despite these omissions, it is undeniably an extremely significant bill, arguably the first significant pro-worker legislation in 15 years. By contrast, the previous governments laws made it harder to strike, mandating minimum service levels during industrial action.

The legislation will, Cominetti added, simply catch Britain up with most other democracies.

“For all the supposed controversy about these new rights, the main change will be to make Britain look more normal compared to our peers,” he said. “Currently, only five out of 38 OECD countries have weaker employment protections than British workers.”

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