Employment Rights Act: Business braces for shorter strike notices, stronger unions
The first batch of reforms, following the passage of the Employment Rights Act, came into effect on Wednesday, granting employees new trade union powers.
As of Wednesday, measures under the legislation kicked in, including the repeal of most of the Trade Union Act 2016 and the introduction of protections against dismissal for taking industrial action.
In addition to new rights around trade unions, employees will also be newly eligible for ‘day one’ paternity leave, and unpaid parental leave can give notice. The changes have been backed by union bosses but criticised by business leaders.
Mayer Brown partner Miriam Bruce explained: “The removal of the 12-week qualifying period for dismissal related to industrial action is also a game-changer. It will now be automatically unfair to dismiss an employee for participating in protected industrial action, regardless of timing.”
“This puts even greater onus on employers to have clear evidence that the dismissal of a striking employee is entirely unconnected to industrial action. Resolving disputes through dialogue rather than confrontation has never been more important,” she added.
The next batch of measures from the controversial legislation, set to come into effect on 6 April, includes whistleblowing protections and the removal of limits on statutory sick pay.
Job losses coming ahead of rights
Lawyers recently told City PM that businesses plan to carry out a “clean up” of redundancies by the end of the year in anticipation of unfair dismissal reforms coming into force next January.
In January 2027, the reduction of the unfair dismissal qualifying period to 6 months, the uncapping of compensatory awards, and fire-and-rehire protections come into effect.
Currently, compensation for unfair dismissal is capped at £118,223 or one year’s salary, but the Employment Rights Act will remove this cap.
Stefan Martin, partner at Hogan Lovells, explained that when this cap is removed, it “could become quite a significant issue”, especially for high earners, as it’ll cost the employers even more.
This comes as the labour market continued to loosen at the end of last year, according to Office for National Statistics (ONS) data on Tuesday, unemployment climbed to 5.2 per cent between October and December, the highest level since early 2021.