The Employment Rights Bill is looming large. Currently under scrutiny in the Lords, it is due for phased implementation from April 2026.
However, with less than a year to go, there remain plenty of points of contention for unions and employers.
Last week, the Bakers, Food & Allied Workers Union (BFAWU) warned it would consider industrial action in its campaign to strengthen the bill.
On the flip side, employers say it goes too far – potentially resulting in fewer jobs and jeopardising the government’s growth ambitions.
So, what are the sticking points in the bill? And is trouble brewing for industrial relations if they are not ironed out?
Business concerns
The BRC and FDF have both welcomed the bill’s intent. But they have sticking points: the requirement to offer guaranteed-hours contracts and restrictions on ‘fire and rehire’ practices.
The bill says employees need to be offered a guaranteed-hours contract after 12 weeks of service. That could force businesses to “monitor and make offers to hundreds of thousands of employees”, says the BRC’s HR policy advisor Luiza Paludo Gomes. Plus, it could impact the ability to offer flexible roles.
The BRC would like to see a ‘right to request’ guaranteed hours, rather than a duty to offer a contract.
“In its current form, some clauses in the ERB could backfire, leading to significant job losses,” warns Gomes.
Meanwhile, the FDF fears seasonal workers will be swept up in the protections. It is calling for a 26-week qualification period rather than 12 weeks.
Unamended, the bill will “significantly increase” the admin load for employers – especially the 98% of food and drink manufacturers that are SMEs, says FDF head of industry growth Caroline Keohane.
Union reaction
Unions aren’t so convinced by employer concerns.
“The bill doesn’t ban flexible work, it simply stops it being exploitative,” says GMB. “Plenty of retail employers already plan rotas weeks in advance, so the idea this is unworkable doesn’t withstand scrutiny.”
Unions have broadly welcomed amendments made in March, including extending guaranteed hours to the UK’s 900,000 agency workers and bolstered statutory sick pay. However, they want to see the bill go further.
For example, rather than banning fire and rehire outright, the bill sets out criteria for employing the move. Among them, the employer must show evidence of financial difficulties affecting viability, and demonstrate a change to contracts was “unavoidable”. For Unite, this is a loophole that needs closing.
What happens now?
One thing everyone can agree on is a need for more clarity.
“The big frustration” is the bill’s “lack of detail”, says Matt Jenkin, partner at law firm Herrington Carmichael.
More detail should come in October, when the bill is expected to receive royal assent.
We will then see “an awful lot of case law” as courts interpret the bill, Jenkin anticipates.
Courts will feel the effect beyond that initial stage, too. The government estimates tribunals will jump by 15% permanently after the bill. But there will be far more if the final bill lacks clarity, warns Jenkin.
Given the average wait time for an unfair dismissal claim to be heard is about year, it would leave plenty of time for industrial relations to sour.
As Keohane points out, that makes it all the more important the government “gets it right first time”.
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