Employment Bill: Here is everything that has happened since its inception
The third reading of the Employment Rights Bill, a controversial piece of legislation, commenced at the House of Lords on Wednesday.
Rushed out within 100 days of Labour taking office, the Bill has faced fierce debate and criticism from multiple stakeholders.
The Bill, which formed a significant part of Labour’s manifesto, was laid before Parliament last October, detailing 28 individual measures, including the end of exploitative zero-hour contracts and a ban on fire-and-rehire tactics.
The proposed overhaul of employment laws has sparked widespread criticism from businesses, lawyers, and HR experts, as the costs of the reforms amount to billions.
Additional costs for businesses
Immediately after the Bill was unveiled in its full form for the first time, government analysis revealed that the measures would incur around £5bn in additional costs for businesses.
When the Bill was having its second reading in the House of Commons, the government launched four consultations to gather feedback on key aspects of the bill, including industrial relations, ‘fire and rehire’ practices, zero-hours contracts, and statutory sick pay.
It moved through the stages at the House of Commons very quickly, having its third reading on 12 March, and was introduced to the House of Lords for its first reading on 14 March.
Lucy Lewis, partner and chair at Lewis Silkin, stated: “The government pledged a quick process for getting the Bill into Parliament. This did mean that some major fudges were made to get it over the line during the initial self-imposed 100-day deadline.”
“Now, 10-months on, it will have to grapple with a multitude of amendments, and technical modifications to ensure that the Bill is in the best possible shape for implementation,” she added.
While it made its way through the House of Lords, the government published an ‘implementation roadmap’, which outlines proposed timelines for when different measures will come into effect.
This report showed that the implementation date for day-one rights for paternity leave and unpaid parental leave was pushed back to April 2026.
Others, such as ending so-called fire and rehire practices and obliging firms to protect staff from harassment by third parties, will take effect in October 2027.
Token reform
However, the glut of its reforms, and the ones that grabbed headlines, ‘day one’ employment rights and making flexible working the default, will not be implemented until 2027.
The ‘day one’ right has been the token of Labour’s reforms, but it has been seen as a major issue for the Employment Tribunal.
Employment lawyers have been outspoken about the plan to reduce the current system of having the right to sue over unfair dismissal following two years of service to ‘day one’.
The fear is that the amendment would trigger a significant wave of litigation against businesses, leading to a Tribunal that is already facing a growing backlog of cases following the pandemic.
Just before the government went on Summer recess, the House of Lords voted in favour of a Conservative-led amendment to bring ‘day-one’ rights provisions up to six months.
Lord Sharpe proposed an amendment to reduce the length of the qualifying period for unfair dismissal to six months rather than from day one, which passed 304 to 160 at a vote.
Any amendments from the House of Lords have to be sent back to the House of Commons for consideration.
Speaking to City PM at the time, Dan Chapman, employment partner at Leathes Prior Solicitors, explained: “The government’s commitment to day one rights is at the core of their manifesto commitment, and ordinarily this means that the House of Lords would as a matter of convention not vote it down.”
The Bill is back at the House of Lords on Wednesday for its third reading, as it is expected to receive Royal Assent and become the Employment Rights Act 2025 by the end of Autumn.
“As we inch closer, more questions are being asked around how best to prepare for the first wave of measures. Whilst there is still a little breathing space from now and the Bill’s phased implementation, which could be extended by a Parliamentary ‘ping-pong’ period, it is undoubtedly sensible to be thinking about it,” Lewis added.