Blog- 21st March 2025, Capsticks, Corporate Partner

New Employment Rights Act – time to get ready

The most fundamental changes in employment law for a generation are fast approaching. Take note - they will have a significant impact on local authorities, so you need to be prepared.

As a reminder, the government promised and delivered a bill on employment rights within 100 days of the General Election. The Bill followed the legislative reforms the Labour Party set out in its “Plan to Make Work Pay” published in May 2024. The Bill promised to provide new “day one” rights, reform the law in relation to trade unions and industrial action, and introduce a new regime for enforcement of employment law.

It would be impossible to cover all of the reforms which are coming within this blog. Suffice to say, it’s going to keep employment lawyers and HR Directors very busy for many months to come, and will have budgetary and resource implications for all local authorities, as well as the organisations they work with.

Just two of the points which we think will be of key importance to LLG members are:

• It will be automatically unfair to dismiss an employee for refusing to accept a contract variation, unless the reason for the variation was to save the organisation and the employer could not have reasonably avoided it. (This is a much higher burden than the current test of an employer needing to have ‘a sound business reason’ to make a change to terms and conditions, and is likely to create a significant challenge for those working in public sector services); and
• Employees will have the right to bring unfair dismissal claims from day one, removing the current two-year qualifying period. This will, as anticipated, make robust management of probationary periods vital for all employers.

Over 200 amendments have been made since the Bill was first published. Points of interest arising during the debates included the Government committing to providing the Fair Work Agency with the resources required for it to perform effectively, and the extension of the time limit for bringing Employment Tribunal claims from three to six months.

So – what’s the latest position? The Bill is now off to the House of Lords, and on 4 March 2025, the Government published responses to five consultations, including on its proposals for modernising industrial relations. We expect the Bill to come into force in July 2025, with the majority of changes to come into force in early 2026. There is a lot to prepare for, so we advise you to audit your practices now, and get your teams, managers, and systems ready. We expect the reforms to lead to more Tribunal claims, increased industrial action activity, and additional cost and increased HR resourcing requirements.

Get in touch if you would like to receive our updates or discuss these changes. We can deliver bespoke training for local government Cabinets and Members, in-house legal teams and HR. We will also be recording a detailed webinar on the ERB for LLG shortly.  

Claire Gilbert