The Employment Rights Bill is progressing through the House of Commons and aims to fulfil the government’s commitment to “make work pay”. Key provisions include enhanced worker protections, such as “day one” safeguards against unfair dismissal, stricter regulations on zero-hour contracts and measures to curb “fire and rehire” practices. While implementation is unlikely before autumn 2026, these reforms will significantly impact employers, including those in the rail sector. NSAR members should be aware of the Bill’s key provisions and potential implications, which are outlined below.
Changes to unfair dismissal rules
The most notable change proposed in the Employment Rights Bill is the removal of the two-year qualifying period for unfair dismissal claims.
However, this change is not entirely straightforward. Instead of the two-year period, a statutory probationary period, referred to as the Initial Period of Employment (IPE), will be introduced, lasting for the first nine months of employment. During this IPE, employees will not be able to pursue unfair dismissal claims.
While the exact details of the IPE are still to be clarified, it is expected that performance issues will need to be addressed with the employee, who will have the right to be accompanied during these discussions. Importantly, this process will apply regardless of any probationary period set out in the employment contract.
In practice, this means that during the first nine months of employment (the IPE), employees won’t have the right to claim unfair dismissal. This provides employers with more flexibility to manage employees in the early stages without the risk of unfair dismissal claims. Once the IPE concludes, employees will have full access to unfair dismissal claims, as the two-year qualifying period will no longer apply. Essentially, this strikes a balance: employees will gain quicker protection against unfair dismissal, but only after completing the IPE, which gives employers greater flexibility during the initial months of employment.
Zero-hours contracts
The bill introduces a new right for zero-hours workers to receive a contract guaranteeing the hours they typically work, determined by a 12-week reference period.
It is worth noting that, for the rail sector, this is likely to apply to agency workers. There has been some debate over this, but the government has made clear through amendments to the bill that it intends to extend these rights to agency workers. Much of the detail is yet to be confirmed.
Moreover, those on zero-hours contracts will also be entitled to:
- Advance notification of work schedules, with financial compensation if shifts are altered, shortened, or cancelled with minimal notice.
- Protection from employer exploitation, with an amendment allowing workers to file complaints if their employer deliberately restricts their hours to avoid providing guaranteed hours contracts.
- Potential exemptions via collective bargaining, as another amendment permits employers to exclude guaranteed hours and shift notification requirements through agreements integrated into employment contracts.
A new framework for industrial relations
The government has proposed various changes to industrial relations within the Bill.
Proposed changes to industrial action regulations:
- Reduced strike notice period: Unions will now need to give only 10 days’ notice before taking strike action, down from 14 days.
- Extended mandate for industrial action: A successful ballot will remain valid for 12 months rather than six.
Additionally, the government has indicated that it will table an amendment to remove the minimum voter turnout requirement for industrial action ballots. It is important to note that the implementation date for this change has not been specified, and it will occur after the broader provisions of the Bill take effect.
Statutory Sick Pay
The bill will make Statutory Sick Pay (SSP) available from day one of illness and expand eligibility to those earning below the Lower Earnings Limit (LEL).
Fair Work Agency
The bill also proposes the establishment of a new regulatory body, the Fair Work Agency (FWA). While details are still limited, the agency is expected to have the following responsibilities and powers:
- Employment rights enforcement: The FWA will have the authority to enforce compliance with employment law.
- Worker representation: The agency will represent workers in tribunals or provide legal assistance, with costs potentially recovered from awards.
- Cost recovery from employers: Businesses that violate labour laws may be required to cover the enforcement costs.
- Statutory payment enforcement: The FWA will have the power to issue underpayment notices and impose a 200% penalty for failure to meet statutory payment obligations.
Parental bereavement leave
The government is also likely to support a non-government amendment extending parental bereavement leave and pay to employees who experience pregnancy loss before 24 weeks, making it highly probable that the change will become law.
Looking forward
Overall, the Employment Rights Bill will necessitate a significant shift in how some rail employers manage their workforce. Proactive planning will be crucial for navigating these changes and mitigating potential risks.
As noted, several key details still need to be clarified, particularly regarding the amendments and their specific scope. We will continue to keep NSAR members updated as the bill progresses.
If you are an NSAR member, and would like to discuss this further, please contact Edward Hughes: Edward.hughes@nsar.co.uk