The Employment Rights Bill (“the ERB”) was introduced in the House of Commons on 10 October 2024. It has passed through both Houses and is now in its Final Stages. Royal Assent is expected before the end of 2025.  As the Bill passes through Parliament, we can expect further changes and revisions. The below represents the status of the Bill as of October 2025.

The ERB promises to reshape the employment landscape. This update covers the key proposals, the effect they are likely to have on commercial transport operators, and recommendations on how best to prepare for the changes.

Zero-Hour Contracts

The government has called for an end to zero-hours contracts, calling them “exploitative”. The ERB provides workers with the right to a guaranteed hours contract if they work regular hours over a defined period.

In the ERB’s original format, the responsibility for offering guaranteed hours fell on the end hirer (the operator), with the power for workers to refuse the guaranteed hours if they wished. There was also an exception where there was a “genuine temporary work need” for zero-hour contracts, such as seasonal demand.

However, the Lords have now passed an amendment which changes the provision from a requirement to offer guaranteed hours to a right to request guaranteed hours by the employee. This has been criticised by Labour supporters, who have asserted that it weakens the provision and is particularly unlikely to be effective given the potential for employer coercion.

It is unclear at this point what format the clause will take, and there is likely to be a back and forth between the Houses prior to Royal Assent. Operators are urged to keep a keen eye on developments.

In any event, it will be important for operators who use zero-hours contracts to keep an accurate record of drivers’ hours. This will be necessary in order to determine who might be entitled to guaranteed hours. It would be advisable to start collecting this information now in order to be prepared for when the changes come into effect.

Workers will also have the right to be given reasonable notice of shifts and changes in shifts. Short notice can be reasonable in some scenarios, and this will be outlined in secondary legislation. The Lords have proposed that reasonable notice means 48 hours.

Workers will have the right to payment for any cancelled, moved, or curtailed shifts without reasonable notice. Responsibility to make these payments will be on the employment agency but they will be allowed to recoup this from the hirer where they have arrangements covering this.

Time Limits

The time limit for bringing a claim in the Employment Tribunal is to be extended from 3 months to 6 months. This includes unfair dismissal, unpaid sick pay and unpaid holiday pay. Put simply, operators will be at higher risk of litigation as employees will have more time to issue a claim.

Operators should reconsider their document retention policies and archiving policies. Records will need to be retained for at least nine months following any incident, given the fact that ACAS Early Conciliation will still “stop the clock” while conciliation takes place.

Operators would also benefit from reviewing their internal complaints, grievance and appeal mechanisms. A benefit of the extended time limit is that there will be more time to handle grievances and resolve issues before tribunal proceedings must be lodged. This presents an opportunity to avoid litigation, provided operators handle complaints effectively and are willing to negotiate with potential Claimants. Early resolution will be key to avoiding an increase in claims.

Day One Rights

The ERB intends to remove the qualifying period for unfair dismissal, currently set at two years. This means that employees will be protected against unfair dismissal from day one of employment, subject to a statutory probationary period, which will also be introduced, likely to be nine months.

Operators should consider how they seek to recruit and discipline newly-recruited drivers, and ensure that they have a comprehensive disciplinary and grievance policy to enable them to take action when necessary and ensure they have effective control over their transport operations.

Pregnant women and new mothers will get increased protection against dismissal by placing a ban on dismissing employees who are pregnant, on maternity leave, or who have returned from maternity leave in the last 6 months. In addition, parental leave and bereavement leave are to be protected from day one.

Fair Work Agency

The ERB will create a new state enforcement agency for specific employment rights – the Fair Work Agency. Their function will be to assist workers in employment cases. If the claim succeeds, the Fair Work Agency’s costs will be recoverable from the employer.

The idea is that the Fair Work Agency will be able to:

• bring Tribunal claims on behalf of workers,
• chase employers for unpaid sick pay and holiday pay,
• impose financial penalties on top of any compensation,
• compel people to attend interviews.

In addition, enforcement officers will be given powers of arrest and will be able to access a business’s computers or other equipment. They will also be able to enter people’s homes in the course of their investigations, provided they obtain a warrant from a magistrate and have reasonable grounds to believe there are documents or equipment in the premises which they require. How the FWA will work in practice and the range of its enforcement powers is yet to be seen.

Operators should regularly review their document retention and compliance procedures in order to be ready for enforcement officers and investigations at any time.

Other proposals

• The Bill makes statutory sick pay (SSP) a legal right for all workers for the first time by removing the requirement that an employee must earn above the Lower Earnings Limit, and eliminating the three ‘waiting days’ before statutory sick pay will be paid.
• The ERB introduces a new type of "automatically unfair dismissal" where workers are dismissed for not agreeing to variations in their contract, or because their employer wants to rehire them on different terms. In this way, it seeks to end “fire and rehire”. There will be a limited exception where the employer is experiencing severe financial difficulty and is about to collapse, making firing and rehiring crucial to the survival of the business.
• The Bill establishes new rights for trade unions to access workplaces, simplifying information requirements for industrial action ballots, introducing e-balloting, extending the expiry of mandates for industrial action from six to 12 months, and streamlining the trade union recognition process.

What do these changes mean for you?

The Bill will introduce the most far-reaching changes to UK employment law in a generation, with a large and arguably disproportionate impact on employers and businesses, including transport operators. However, the detail will be in the secondary legislation, in which operators will have the opportunity to have their say during the various consultations surrounding the Bill.

The ERB is currently in its final stages, with Royal Assent expected soon. Some provisions may be in force this year, but it is expected that the majority of reforms will come into effect in 2026.

Commercial transport operators and employers in general are advised to maintain accurate records for all employees, and keep a careful eye on developments to be well-prepared for when the changes come into force. This will help them avoid major consequences, including costly tribunal claims and reputational damage.