Day-one protection for workers against unfair dismissal has been delayed until 2027 under a new timeline for the government’s Employment Rights Bill.
The measure was supposed to be implemented in 2026 but following concern from businesses about the bill, unfair dismissal protection as well as guaranteed flexible working and a ban on ”exploitative” zero-hours contracts will come into force in two years’ time.
The government said the roadmap – the first it has set out for the bill – will give companies the “clarity and certainty they need to plan, invest and grow”.
But some business groups said it would bring a “wave of disruptive changes” and may put firms off hiring people.
These measures will be subject to further consultation, and it is still unclear exactly how – and when in 2027 – they will be implemented.
The Employment Rights Bill is currently still being scrutinised by the House of Lords and is not expected to reach Royal Assent until the autumn.
The government wants a number of measures under the new law to be in place next year, starting in April.
These include removing the current limits on statutory sick pay. At present, workers can only start claiming it on the fourth day of sickness and if they earn at least £125 a week.
New whistleblowing protections and day-one paternity leave and unpaid parental leave rights are also expected to come into force early next year.
From October next year, the government says measures to be implemented will include ending “unscrupulous” fire and rehire practices, and changes to the tipping law to ensure a fairer tip allocation.
Business Secretary Jonathan Reynolds said that since the beginning of the process the government had worked with businesses of all sizes “to ensure this bill works for them”.
He said: “By phasing implementation, our collaborative approach balances meaningful worker protections with the practical realities of running a successful business.”
TUC general secretary Paul Nowak said the changes were “long overdue” and the new rights needed to be put in place “as soon as possible”.
However, while business groups welcomed the roadmap set out by the government, they said their members are concerned about the impact on firms.
“Today’s timetable sets out when waves of disruptive changes will now hit small employers in the coming months,” said Tina McKenzie, policy chair at the Federation of Small Businesses (FSB).
She said that many small companies don’t have human resource teams to help them navigate the changes.
“The clock is now ticking,” Ms McKenzie said. “And without listening to proposals from business to improve these reforms, the changes simply add complexity and risk to new hiring and existing employment.”
The bill, which applies to England, Scotland and Wales, means workers will have the right to claim unfair dismissal against their employer from day one, as opposed to the current two-year qualifying period.
However, staff will be subject to a nine-month probation period, during which employers can dismiss someone more easily and without the full process required.
Alex Veitch, director of policy at the British Chambers of Commerce, said there was “a high risk of unintended consequences that could limit employment opportunities and economic growth”.
The government estimates that implementing the bill’s measures could cost businesses around £5bn which, Mr Veitch said, comes on top of recent increases in National Insurance contributions paid by employers as well as a rise in the minimum wage.
“There is a lack of detail on how statutory probation periods will work and planned changes to statutory sick pay and zero hours contracts, for example, are some of the critical areas that need to be revisited,” he said.
Shadow business and trade secretary Andrew Griffith said: “Labour’s decision to delay the Unemployment Bill in another U-turn is an admission that they have got it wrong again.”
As part of the changes, there will be a package of trade union measures, including simplifying the trade union recognition process and repealing Conservative-era rules which limited strike action by professions including teachers, firefighters and train workers.
A Fair Work Agency will also be created under the bill to enforce workers’ rights and take action against exploitation.