Employment law changes, rising costs and tribunal risks: Employers brace for reform

James Austin (Employment Partner) and Brendan Bah (HR Advisor). | John Steel Photography

Employers are entering a challenging period as the Government pushes forward with ambitious plans to strengthen workers’ rights. With sweeping reforms proposed under the Employment Rights Bill, the landscape of employment law is set to shift significantly, raising questions about how these changes will impact businesses.

Among the proposed reforms are major changes such as the right to claim unfair dismissal from ‘day one’ of employment*, a ban on zero-hour contracts, more onerous requirements when rejecting flexible working requests and the removal of the three-day waiting period and lower earnings limit for statutory sick pay eligibility.

While these changes aim to protect workers, they also present new challenges for employers.

The Government has since published amendments to the Bill, proposing several changes and clarifications, some of which are significant. For example, workers will have six months to bring an employment tribunal claim rather than the current three months. This is likely to lead to a rise in tribunal cases, placing further strain on HR departments and tribunals.

There may also be further changes to come as many organisations have raised concerns about the proposals. Not least of these is the Regulatory Policy Committee (RPC), which assesses the quality of evidence and analysis used to inform Government regulatory proposals. This stated that many of the proposed measures lack clear justification and further consideration is needed of their potential impact on employers and the broader economy. This means employers cannot yet be sure what the future employment law landscape will be.

On the plus side, most of the proposed reforms are unlikely to take effect before 2026, so employers have some time to prepare. However, rising costs – such as the incoming higher minimum wage and increased National Insurance contributions – mean that many businesses are already facing tough decisions.

Now, more than ever, businesses need robust HR support to navigate these turbulent times. Whether you’re reviewing internal processes or considering external expertise, being proactive can help mitigate risks and ensure compliance as the new legislation unfolds.

Tailored HR support with LCF Works

LCF Works is a flexible HR advice package designed to meet the evolving needs of employers. From unlimited phone and email support to staff training and in-house HR solutions, our experienced employment law and HR professionals are here to help you manage challenges with confidence.

To learn more, please contact Employment Law Partner James Austin on 01132 384 046 or [email protected], or download our brochure at www.lcf.co.uk/business-services/employment-law-employers/lcf-works

* Unless dismissed in accordance with a procedure during a probationary period, which is likely to be either six or nine months.