JT: Robert, thank you for sitting down with me, could you tell us a little about your background in the UK Government, your involvement with employment laws whilst in Government and your role at PHB?
RB: Thanks for our conversation, James. I held several significant roles in the UK Government from 2014 to 2022, most notably as Lord Chancellor and Secretary of State for Justice, where I oversaw the justice system in England and Wales. As Solicitor General for England and Wales, I regularly provided legal advice to the Government and representing the Crown in legal matters. I particularly remember working in 2020 and 2021 with the then Business Secretary, whose department had direct responsibility for Employment Tribunals, on the necessary response to the Covid lockdown challenge. Although the MOJ, for obscure historic reasons, did not hold the pen on ETs, I strongly felt that it should and thankfully was given the leeway to operate as if my department had full and exclusive responsibility!
I also recall having to advise on the somewhat vexed question of Welsh legislative consent for the Trade Union Bill of 2015/16 which introduced a minimum 50% turnout for strike ballots and other restrictions on strike votes and picketing. Cardiff insisted that the UK Government was legislating on devolved matters, but we strongly disagreed and the legislation was passed without a Legislative Consent Motion. The Senedd later passed its own legislation reversing some of the effects of the new Act, but we were right to hold the line on the question of devolved matters.
JT: As you know well, in October 2024, the present UK Government published its Employment Rights Bill (“Bill”) which looked to introduce significant reform to UK employment law. Whilst those changes are unlikely to come into force this year, it is expected that the majority of reforms will come into effect in late 2026 and even 2027. More recently, the Government published a Roadmap for the delivery of the Bill, ending speculation on potential implementation dates. What are your thoughts on the introduction and progress of the headline points from the Bill?
RB: Yes, as you say, James, the Bill is a critical step for the UK Government and contains a significant number of policy measures affecting different parts of UK employment law; it represents the biggest change to workers’ rights for a generation. Estimates from the UK Government itself state that the cost to business will be between £900m and £5 billion, depending on the final version of the Bill.
One of the most significant changes is to the qualifying period for ordinary unfair dismissal claims:
the House of Lords recently voted to reduce the qualifying period for unfair dismissal from two years to six months. The UK Government has announced in a recent press release that is has agreed to this, rather than removing the qualifying period entirely and making unfair dismissal a ‘day one’ right as it originally proposed in the Bill.
To further strengthen employee protection, the UK Government has also proposed to lift the current compensation cap (which limits compensation to 52 weeks’ gross salary or the statutory cap, whichever is the lower).
What are your thoughts on this, James?
JT: The proposed reduction in the qualifying period for unfair dismissal is a significant and still potentially unwelcome change to businesses – it is a more balanced approach than abolishing the qualifying period: shorter than the current two-year period, but not as administratively disruptive as a day-one right would have been. It also aligns reasonably well with typical probationary periods seen today. So, for many businesses and some workers, this may feel like a reasonable, pragmatic compromise — improving protections while preserving a buffer for employers to manage hiring risk. However, I do not believe that this will necessarily result in less litigation once these proposals are enacted; even if only a small percentage of employees bring claims, the pool of those eligible to present such a claim will expand dramatically, so the overall number of claims will likely rise.
When Tony Blair’s government reduced the qualifying period for ordinary unfair dismissal in the 1990’s, it was reduced to one year. Despite the UK Government agreeing to reduce the qualifying period to six months, I believe it would have been more reasonable to reduce it to nine months, instead. From a worker-rights perspective, six months still leaves a substantial “unprotected” window — a period in which an employer could dismiss someone without the protections of ordinary unfair-dismissal rights. However, this may lead to job insecurity or precariousness of employment early on. Interestingly, the Roadmap indicates that these changes will take effect in 2027, although the recent UK Government press release does not confirm this and so whilst this may be far on the horizon, employers will need, if they have not already done so to review disciplinary and dismissal policies and processes and ensure that managers are trained on managing conduct and performance issues.
Turning to the proposed lift on the current compensation cap, the UK Government’s recent press release on this point is ambiguous. Currently, the statutory cap for unfair dismissal compensatory awards is set at the lower of 52 weeks’ gross pay and £118,223 (for 6 April 2025 – 5 April 2026). Whilst the agreement to reduce the qualify period to six months may provide immediate relief to employers, it remains unclear what ‘lift the current compensation cap’ means – and this could be hugely significant.
We await further confirmation as to whether the intention is to “lift the cap” to a higher level or its partial or complete removal.
RB: I think some of the arguments put forward by their Lordships in support of the amendment were very strong. The six-month period they supported was seen as a reasonable compromise that matched the length of probationary periods commonly used by employers. Many peers were concerned that day-one protection would lead to a spike in unfair dismissal claims, placing more strain on the Employment Tribunal system. There was a fear that candidates without prior experience or from unusual backgrounds would not be taken on due to a greater degree of caution being exercised by employers.
RB: What about the right to request guaranteed hours?
Instead of implementing a duty on employers to offer a guaranteed hours contract to eligible workers, the House of Lords has amended the Bill to make it a right to request a guaranteed contract.
JT: It’s important to note that zero hours contracts are, at least, not being banned completely, but the new changes appear to ensure that zero-hours or casual workers who in practice work fairly regular hours, can have a contract which reflects this. In turn, this will mean that such workers will have increased reliability and certainty around their working arrangements.
Again, the Roadmap suggests that these measures will take effect in 2027. In advance of this, employers who rely heavily on casual or zero hours workers may wish to consider and review their arrangements to assess which workers may be entitled to a regular hours contract. Also, if shifts are usually offered at short notice and/or regularly cancelled or curtailed, then it would be advisable to assess how this may be improved, to reduce the exposure to compensation when the changes come into force.
RB: Let’s discuss harassment at work,
The UK Government seeks to strengthen the existing duty to take reasonable steps to prevent sexual harassment at work, introduce whistleblowing protection for sexual harassment complaints, introduce protection from third-party harassment and a ban on confidentiality provisions.
JT: Employers who put in place reasonable steps to prevent sexual harassment at work in order to comply with the October 2024 duty should be in a better position when this duty is strengthened in 2027, according to the UK Government’s Roadmap. However, it is important to review all anti-harassment measures regularly in any event.
The new whistleblowing protection for employees who complain of sexual harassment means that if they are dismissed or subjected to a detriment in connection with their complaint of sexual harassment they will have a whistleblowing claim in addition to victimisation which could be significant – this change is due to take effect in April 2026. The proposed ban on confidentiality provisions may be a disincentive to employers (and potentially also to employees) to enter into settlement agreements – so we will need to see how this evolves, particularly in circumstances where this measure was not included in the UK Government’s Roadmap for implementation.
The new third-party harassment provision, which, according to the Roadmap, will take effect in October 2026, will extend to all types of harassment, and employers will need to ensure that they have measures in place, such as appropriate wording in contracts with clients and suppliers.
RB: Whilst I think it can be argued that the change in the harassment liability test to a failure by employers to take “all reasonable steps” to prevent third party harassment adds welcome clarity, proper statutory or regulatory guidance will still be needed in order to avoid inconsistent or varying interpretations of the duty by tribunals. However, balanced against that are a number of major concerns.
The new third-party harassment duty seems to me to be an absolute minefield as the behaviour of customers in pubs, restaurants or other public-facing workplaces, for example, is very hard indeed to predict. Notions of “prevention” or” control” seem to me to be wholly unrealistic and potentially a huge burden or obstacle for businesses. Are prospective customers expected to sign up to a code of conduct before coming into a pub, for example. There are legitimate questions about freedom of expression, and when someone’s “banter” becomes someone else’s harassment. This is a world away from the landlord’s traditional discretion to bar customers whose behaviour crosses the line, for example.
RB: What about the proposed increase to time limits in the Employment Tribunal?
The time limit for workers to bring claims in the Employment Tribunal is to increase from three, to six months and the UK Government plans to introduce a single enforcement body for workers’ rights.
JT: with the increase in Employment Tribunal time limits, which according to the Roadmap is expected to take effecting in October 2026, it will be interesting to see if employers face an increase in Employment Tribunal claims – ironically, some employees may be less likely to proceed with claims because they have more time to find another job or otherwise move on. We are already seeing a significant backlog and delay in the Employment Tribunal with existing claims so it will be interesting to see what impact this has, if any.
JT: What are your thoughts on the introduction of the Fair Work Agency, Robert?
RB: The Government intends to introduce a single enforcement body for employment rights – this will be called the Fair Work Agency and the Roadmap indicates that this will be established in April 2026. The UK Government believe this will make it easier for workers to enforce their rights and I expect this proposal will be welcomed by trade unions. As I understand, whilst the Agency will have significant powers much will depend on how they are used in practice. The Agency will be able to enforce holiday pay, statutory sick pay, national minimum wage and other rights. The power to enforce holiday pay is potentially significant – this is a complex area and one which is not often litigated currently but this may change under the Agency.
JT: Well, this will no doubt cost the public purse significantly. I have always been a proponent of individuals enforcing their own rights and there is something a little sinister about this proposal whereby the UK Government may start to finically benefit over the individual where claims are successful.
RB: Let’s discuss the other headline proposed change of ‘fire and rehire’. The UK Government intends is to restrict the use of fire and rehire?
JT: Yes, under the UK Government’s proposals it will become automatically unfair to dismiss an employee for refusing to agree changes to their employment contract where the change relates to pay, pension, hours of work, holiday entitlement or anything else set out in regulations.
It will also be automatically unfair to dismiss an employee where the main reason is to replace them with someone else, or re-engage them, on new terms relating to pay, pension, hours of work, holiday entitlement or anything else set out in regulations.
The Roadmap suggests that these changes will take effect in October 2026. If this proposal goes ahead, it will be a significant change, as it will mean employers will have much less flexibility when seeking to change terms and conditions of employment and a significantly higher onus on showing the need/reason for the change. It may also lead to additional redundancies, given the limited scope for employers to force through changes to terms and conditions.
This proposal is bad for business and employers will need to ensure that employment contracts are drafted so that they contain as much in-built flexibility as possible.
RB: So, what can we take away from this all, James?
JT: Employers should prepare for change now, make sure policies and procedures are fit for purpose and up to date and any necessary restructuring is undertaken now and before further restrictions are imposed on how an employer runs and manages its business.
Thank you, Robert.
For more information on the issues discussed in this article, contact James Townsend. Alternatively, please call 020 7465 4300.
This article featured in our Winter edition of ‘IN CASE’, our Employment newsletter for HR Directors. Click here to read more or subscribe.
