New workers' rights law - the key changes from sick pay and parental leave

Labour's Employment Rights Bill is expected to become law next year and will be the 'biggest shake-up to employment rights in a generation'

The Labour party is set to unveil its highly anticipated workers' rights legislation, touted as the most significant overhaul of employment rights in a generation. Deputy Prime Minister Angela Rayner has pledged to "turn the tide" for millions of Britons who have struggled with low pay and precarious work under Tory rule.

The Employment Rights Bill, first proposed in 2021, has undergone intense negotiations with unions and business leaders before being presented to Parliament today (Thursday, October 10). The bill, which the Government aims to pass into law next year, comprises 28 separate changes.

Although some of Labour's commitments on workers' rights are not included in the bill, other promises, such as the right to switch off - preventing bosses from hounding their employees out of hours - can be implemented through existing legislation. Key aspects of the bill include "day one" rights for paternity, parental, and bereavement leave, benefiting millions of workers.

Here's what we know about the bill so far - and what it means for you.

Parental and bereavement leave

Approximately 30,000 fathers or partners will be eligible for paternity leave, while an additional 1.5 million parents will have the right to unpaid leave from day one. The bill will also establish a new right to bereavement leave for workers.

Pregnant women and new mothers are set to receive enhanced protections against dismissal while pregnant, on maternity leave, and for six months after returning to work.

Flexible working

The right to flexible working is also poised to become a standard expectation for all employees, with employers required to justify any refusal as "unreasonable", reports the Mirror.

Currently, there are eight grounds on which employers can deny such requests, including additional costs or difficulty in meeting customer demand. However, the scope of this change remains to be clarified.

The Government anticipates that around 1.7 million individuals who are currently not in the labour market might rejoin the workforce due to flexible working arrangements and other policy initiatives.

Sick pay

In terms of sick pay, statutory provisions will be bolstered by eliminating the lower earnings limit for all workers and cutting the waiting period before entitlement begins. Presently, workers earning less than an average of £123 per week do not qualify for sick pay, affecting approximately 1.5 million people in the fiscal year 2022-23.

The proposed legislation will also remove the three-day waiting period, allowing workers to receive sick pay from the first day of illness.

Unfair dismissal

Furthermore, the bill aims to scrap the two-year qualifying period for protection from unfair dismissal, granting workers this right from their first day on the job. This amendment is expected to benefit an estimated 9 million workers who have been with their employer for less than two years.

A government proposal for a consultation concerning potential business changes is underway, which includes revisions set to occur in 2026. The new plan suggests that businesses might be given a "lighter touch" process when it comes to dismissals during the suggested nine-month statutory period.

Zero hours contracts

The legislation aims to deal with zero-hour contracts by guaranteeing workers set hours. This change could impact approximately 1 million individuals across sectors.

Businesses will be expected to provide contracted hours calculated from the average over a 12-week period, with employees on such contracts also safeguarded with the rights to a certain number of shifts and financial compensation if their work hours are abruptly changed or slashed.

Yet, instead of the complete ban originally anticipated, the bill will enable workers to remain on zero-hours contracts if preferred, avoiding an absolute prohibition. Unions have expressed their concerns regarding this concession, as some had lobbied for a total eradication of these unpredictable and insecure work agreements.