The Employment Rights Bill clears the final parliamentary hurdle and is set to become law
Labour’s Employment Rights Bill has cleared its final hurdle in parliament and is expected to become law before Christmas, marking the biggest increase in workers’ rights in a generation.
The legislation passed its final stage in the House of Lords after Conservative peer Lord Sharpe, the business and trade minister, withdrew the amendment at the last minute during parliamentary “ping pong”. This step removed the final hurdle to the passage of the bill.
Prime Minister Sir Keir Starmer hailed the moment as a milestone for workers across the country.
“This is a great victory for working people in all parts of the country,” he said. “We have just introduced the biggest improvement in workers’ rights in a generation. Today our plans have passed parliament, and will soon become law.”
The bill applies to England, Scotland and Wales, but not Northern Ireland, and is expected to receive royal assent later this week. Most of these steps will require a second rule before they can take effect.
Under the new law, workers will receive statutory sick pay and paternity leave from their first day on the job. The law also introduces strengthened protections for pregnant women and new mothers.
Labor initially pledged to give workers the right to seek unfair dismissal from day one, but backtracked in November following concerns from business groups. Instead, enhanced protection against unfair dismissal will apply after six months of employment – now the most important changes in the bill.
Trade unions welcomed the passage of the bill but warned against further purges. Unite general secretary Sharon Graham said it must now be implemented “without further dilution or delay”.
“The bill has already been heavily cut, especially the failure to close the fire and rehire and zero hours contracts,” he said.
TUC general secretary Paul Nowak described the vote as “a historic day and a Christmas present for working people across the country”.
“Finally, working people will enjoy more security, better wages and dignity at work because of this bill,” he said, urging the government to make changes “quickly”.
The Conservatives, however, have criticized the timing of the legislation, saying it risks hurting employment.
“It’s ironic that the job-destroying labor bill was passed on the same day official figures confirm that unemployment has risen every month this government has been in power,” said a party spokesperson, referring to data showing unemployment rose to 5.1% in the three months to October.
Shadow Business Secretary Andrew Griffith warned the bill would “pile up costs on small businesses, stop hiring, and ultimately leave young people and jobseekers paying the price”.
Business groups including the British Chambers of Commerce and the Federation of Small Businesses said earlier this week they were still concerned about parts of the changes, but accepted that as the six-month grace period was kept, the bill should be passed to provide certainty.
Employment advocates said employers should now remove the guesswork and focus on implementation.
Florence Brocklesby, founder of Bellevue Law, said: “Regardless of the views on the pros and cons of change, employers will welcome confidence and planning skills. Implementation should be seen as a major undertaking, with adequate senior management and HR resources.”
He warned that the new six-month unfair dismissal limit would require stricter hiring practices and early performance management, while the increase in compensation would be more important for employers with large numbers of high-wage workers.
Jo Mackie, employment partner at Michelmores, expressed concern about unfair dismissal damages, saying they could “incentivize claims and instill fear in employers”, which could discourage employment.
Dave Chaplin, CEO of ContractorCalculator, said these changes are at risk of reducing the overall employment of small businesses.
“For SMEs, the six-month window greatly increases the risk of employment,” he said. “The irony is that while this bill strengthens protections for those already working, it raises barriers for people trying to find work.”
With royal assent looming, employers and workers alike are now looking at one of the biggest shifts in workplace regulation in decades – with the real impact to be seen as the changes take off.
