Labour’s Work Reforms: Where We Are Now
Labour’s major employment reforms, the Employment Rights Bill (ERB) are moving through Parliament.
The Bill promises day‑one rights for unfair dismissal, sick pay, and parental leave. It also aims to ban exploitative zero‑hours contracts and end fire‑and‑rehire practices.
Delivery will be phased, with some key changes not expected before 2027.
Lords Push to Delay – But Likely Day‑One Outcome
The House of Lords recently voted for an amendment that would delay unfair dismissal rights until six months of service.
This would replace Labour’s plan for day‑one protection with a probationary system.
However, legal commentators, such as Michelmores and Farrer & Co, say the Commons is almost certain to reject this change.
Thanks to the Salisbury Convention, the Lords rarely block manifesto pledges, meaning day‑one rights are still the most likely outcome.
When Will Changes Happen?
- Day‑one unfair dismissal & guaranteed hours, delayed to 2027
- Fair Work Agency – launches April 2026
- New union recognition rules – phased in during 2026
- Minimum Service Levels Act – repealed once ERB passes
The Fair Work Agency
The Fair Work Agency will enforce rules on holiday pay, minimum wage and sick pay.
It will have powers to:
- Enter workplaces (and even homes where staff work)
- Seize documents and interview witnesses
- Bring tribunal claims on behalf of workers
Zero‑Hours & Agency Workers
Labour plans to end exploitative zero‑hours deals and force employers to offer guaranteed hours based on real work patterns.
For agency workers, new rules could simplify employment status and clarify which rights apply.
But these changes are also pushed back until 2027.
Dismissal Rights – What’s Coming?
The biggest change is unfair dismissal protection from day one.
Right now, staff need two years’ service to claim unfair dismissal. Labour will remove that, but introduce a probation period (expected to be nine months) where dismissals will still be easier if handled fairly.
If the Lords’ six‑month delay survives (unlikely), rights would start later, but all signs point to day‑one protection staying in place.
What This Means for You
- For employers: Start planning for dismissal decisions to be scrutinised from day one.
- For workers: Expect much stronger protections and a watchdog ready to enforce them.
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