Since the Labour Party released its manifesto, there’s been a lot of talk about the upcoming legal changes. It promises significant reforms, but the specifics for employers are still unclear. One huge change is that unfair dismissal will become a day-one right. Right now, employers can only face unfair dismissal claims after an employee has been with them for two years. This gives businesses time to see if someone is a good fit.
In the fast-paced IT sector, where specialized skills are crucial, turnover can be high. The new Bill, expected to take effect in 2026, will force employers to approach hiring with extra caution. If they want to let someone go, they’ll need a valid reason and a fair process from day one. This will likely make it harder for businesses to take chances on new talent. Companies might also start using AI to perform basic tasks, cutting down on staff to avoid expensive tribunal claims.
There’s a proposed consultation about a nine-month statutory probation period, but it’s unclear how this will work alongside the new day-one right. Ideally, it should mean fewer claims during probation, giving some flexibility back to employers. Until then, refining hiring practices is crucial. Teams involved in interviews need to be well-equipped to spot the best candidates. Introducing more interviews or skills assessments can help mitigate the risk of hiring mistakes.
For IT firms relying on flexible or zero-hours contracts, changes are also coming. Workers on zero-hours contracts may soon be guaranteed a set number of hours based on their past work, and shift workers will have the right to reasonable notice before shifts are changed or canceled. Employers should assess their use of flexible workers and consider restructuring these agreements now. It’s crucial to refine how shifts are tracked and communicated to avoid risks down the line.
Flexible working is another area that’s changing. Employers now have to be specific about why they refuse a flexible working request. This could be a challenge, especially in tech, where remote work is often expected. While this change doesn’t require immediate action, it’s wise for employers to reevaluate how they handle requests and whether they can accommodate them better.
On to public sector contracts—a key concern for IT companies. The reinstated two-tier code means that when public sector employees transition to private firms, they cannot be treated any less favorably than they were in their previous roles. This could push suppliers to enhance terms and conditions, including pay and benefits, for all staff involved in these contracts.
Lastly, changes to how collective redundancies are handled are significant. If a company plans to lay off 20 or more staff, even from different locations, all those redundancies count together under the new rules. This makes the collective consultation process more demanding and something employers often try to avoid.
With many changes ahead, including adjustments to sick pay laws and increased parental leave rights, it’s essential for businesses to review their hiring processes and employment practices now. Delaying these changes until the Bill is enacted could create complications later on.