The Employment Rights Bill has now cleared the House of Lords. Following some compromises and debates, the Bill is still attracting worry and criticism from the recruitment and HR world. According to the Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry the Bill is ‘an important milestone’, but businesses are clear that there is a great deal to sort out in the implementation of what he terms as “these worrying new regulations”.
“Got wrong, there is a risk to job creation and economic growth,” says Carberry, “From guaranteed hours to trade union rights, businesses expect that the government will live up to its promises and spend 2026 working with them to get the details around implementation right. There can be no return to freezing businesses out of discussions on how their workplaces are regulated.”
Peter Cheese, chief executive of the CIPD said the Bill marked a significant shift in employment rights. “It now provides clarity for employers and sets a timeline for businesses to prepare for the many changes, and in reviewing key people management practices and policies, some of which must start now,” he said.
“The backdating of the now agreed six-month qualification period for unfair dismissal, which comes in to effect from January 2027, means it applies to anyone who has by then completed at least six months in employment, emphasising the importance of clear accountabilities, performance management and feedback practices, and policies,” he said.
Other areas for concern on provisions raised by the bill, include compensation caps for unfair dismissal, the need for the wider review of the tribunal system and enforcement practices, along with reference periods for zero contracts, changes to trade union recognition, and proposed reforms to collective consultation rules. “These should all be part of proper consultation and we welcome the government’s statements in this regard,” he said. “With so much change, it will be crucial for the government to provide clear advance communication, alongside practical guidance and support for employers. And to provide this in good time, particularly for smaller organisations that don’t have in-house HR support.”
James Townsend, Employment Partner at leading law firm Payne Hicks Beach believes the Bill still falls short of delivering a balanced pro-growth framework businesses need to prosper for the benefit of working people: “At a time where employers are already facing ever increasing numbers of claims, rather than re-balancing the existing framework by placing further burdens on business, the government would have been better focussed on modernising dispute resolution practices to cut current delays in cases being heard and re-introducing industrial juries, which were previously abolished in favour of Judges sitting alone in the majority of cases,” he said. “Making a sensible reversal of earlier government policy on industrial juries would have brought back workplace reality and common sense to the Employment Tribunal system.”
