UK workers’ right reforms not expected until 2026

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

UK workers will have to wait until late 2025, or even 2026, for some of the main measures in the government’s flagship employment reforms to kick in, as ministers accept the need for long consultations on the contentious package.

Deputy prime minister Angela Rayner and business secretary Jonathan Reynolds will meet business and union leaders on Tuesday ahead of the government’s self-imposed deadline to publish the draft legislation.

Labour has promised an Employment Act within the first 100 days of the party taking office, with the legislation expected to be released on Thursday. 

The package of some 75 measures is central to Labour’s programme to “make work pay”, and includes protection against unfair dismissal from day one of employment, new rights on working hours, flexible work and the right to “switch off” outside contracted hours.

The government is seeking to reassure workers that it is on their side in the run-up to the Budget on October 30, which is expected to deliver tough decisions on taxes, benefits and public spending.

Officials said it will take more than a year to bring some key measures into effect, and much longer to complete more complex reforms. 

“I don’t think we’re seeing a lot of this before 2026,” said the leader of one business group, adding: “There is a sense of, let’s get this right first time . . . The mood is to use secondary legislation on anything contentious to give time for consultation.”

People involved in the meetings with officials expect the bill published next week to be a bare bones framework that allows ministers to boast they have hit the 100-day target. 

The bill is expected to contain powers for ministers to pass regulations that will eventually fill in policy blanks. 

It could take three months for the legislation to get through parliament, followed by consultations that could last another 12 weeks — with more time needed for the relevant secondary legislation.

Two government figures said it was realistic to think it could be a year or 18 months before some of the key measures were applied in the workplace.

“By the time that is all sorted it would be at least next year, maybe longer,” said one. 

This would apply to provisions such as day one protection against unfair dismissal, the “ban” on zero-hour contracts and a clampdown on employers using “fire and rehire” tactics. 

In a few areas, changes are relatively straightforward and faster to implement. These include the repeal of antitrade union legislation, a stronger right to work flexibly when feasible and the extension of statutory sick pay.

Clarifying the right to bereavement leave and strengthening protections for pregnant workers could also be done swiftly. 

But some far-reaching reforms — including a separate review of the UK’s parental leave system, a rewriting of workers’ employment status and the introduction of collective bargaining in the care sector — will not be part of the legislation and are likely to stretch into 2027.

The promised right to switch off may also be dealt with in a later code of conduct. 

Ministers had “made themselves hostages to fortune” by setting the 100-day deadline, a lobbyist at a second business group said, adding: “There is a wide range of very significant stuff that is not easy to design — they have found how much there still is to work out.”

One of the most contentious issues is how to design a statutory probation period to ensure employers follow a fair process when they dismiss new hires, once the current two-year qualifying period for protection is scrapped. 

“We still don’t know what a fair dismissal process might look like in that period and what rights might apply,” the second lobbyist said, adding that it would “take a couple of years before anything comes into effect”.

He noted ministers were alert to the risk of a surge in claims to already overstretched employment tribunals if there was any ambiguity over the new rules.

“Some businesses are really worried about being sued,” said another business representative.

Colin Leckey, a partner at the law firm Lewis Silkin, said a change to the unfair dismissal qualifying period could take effect in the first half of 2025 but was more likely to come later in the year, if ministers were willing “to consult with businesses and allow time to adjust”.

“Slippage to 2026 is also possible,” he added.

The so-called ban on zero-hour contracts could also take time to refine. Labour had planned to deliver it through a new right to a contract, to reflect the number of hours a worker regularly does over a 12-week reference period.

But businesses and unions are concerned that this could cause problems in sectors where there are big seasonal spikes in demand.