The Labour Party, founded 125 years ago to defend the rights of workers, is now on the verge of delivering one of the most significant reforms to UK employment law since the 1970s.
In its 2024 election campaign, Labour pledged to reverse decades of Conservative restrictions on workers’ rights and trade union freedoms. That promise is now close to being fulfilled through the Employment Rights Bill, first launched by Angela Rayner in October. After approval by the House of Commons in March, the bill has now passed its third reading in the House of Lords following 13 hours of debate.
Although some amendments remain, the government insists the bill will deliver the most sweeping upgrade to workers’ protections in half a century.
What the Employment Rights Bill Delivers
The Employment Rights Bill is designed to rebalance power in the workplace, strengthen job security, and give workers fairer treatment. Key reforms include:
Ending Exploitative Practices
- Ban on zero-hours contracts
- Restrictions on “fire and rehire” tactics
- Stronger collective redundancy rights
- Protection from unfair dismissal from day one
Fair Pay and Equal Treatment
- Strengthened statutory sick pay
- Creation of fair pay agreements in social care
- Legal clarity on tipping laws
- Equal pay and conditions for outsourced workers compared to public sector staff
- Better protections for UK-based seafarers
Supporting Families and Work-Life Balance
- Paternity and parental leave from day one
- Shared parental leave rights
- Bereavement leave entitlement
- Stronger maternity protections against dismissal
- A duty for employers to give “reasonable” grounds when rejecting flexible working requests
Equality, Fairness, and Wellbeing
- Employers must act to prevent sexual harassment and third-party harassment
- New whistleblower protections
- Mandatory gender pay gap and menopause action plans
Strengthening Trade Union Rights
- Repeal of the Strikes Act 2023 and much of the Trade Union Act 2016
- Easier trade union recognition and workplace access
- Stronger rights for union reps and better information for workers about joining a union
Enforcing Employment Law
- Creation of a new Fair Work Agency with powers to investigate, inspect, and take cases to tribunal
- Longer deadlines for workers to bring claims
- Inclusion of payment intermediaries within the law
Opposition from Conservatives and Business
Unsurprisingly, the Conservative opposition has fiercely criticised the bill. Lords Sharpe and Noakes argued that it is “bad for business, bad for jobs, and bad for the economy.”
Business leaders warn that day one employment rights could discourage recruitment, increase compliance costs, and slow economic growth. The Federation of Small Businesses (FSB) has highlighted concerns from SMEs that lack HR resources to manage the new obligations.
Independent estimates put the cost of the reforms at around £5 billion, but ministers argue much of this represents a transfer to low-paid workers, improving fairness, morale, and productivity.
Lords’ Amendments: Areas of Dispute
The House of Lords has returned the bill to the Commons with 12 amendments, including:
- Limiting trade union rights (requiring new members to actively opt in to political funds)
- Mandatory 50% turnout thresholds for strike ballots
- A six-month qualifying period for unfair dismissal rights (rather than day one)
- Allowing employees to be accompanied by a “certified professional” at grievance hearings instead of a union rep
If the Commons rejects these, the legislation will enter “ping pong” negotiations between the two houses before reaching Royal Assent.
Workers’ Rights Timeline and Implementation
The government’s “Plan to Make Work Pay” sets out a roadmap for implementation, with consultations already underway with employers and trade unions.
However, unions are concerned about delays. While the bill will likely receive Royal Assent in 2026, major changes—such as the ban on zero-hours contracts and the introduction of day one rights—will not take effect until 2027.
The Political Dilemma
Labour faces a balancing act: delivering long-promised reforms to strengthen workers’ rights while countering business concerns about costs and bureaucracy.
For trade unions, the bill is a once-in-a-generation chance to rebuild job security, fair pay, and union power. For businesses, it is a potential challenge to recruitment and competitiveness.
One thing is certain: this legislation will shape the future of workplace rights, trade unions, and employment law in the UK for decades to come.
Source: East Anglia Bylines