Changes to the UK’s employment rights framework are set to have far-reaching implications for construction employers. From contracts to workforce planning, Nicola Smyrl outlines the key developments and their potential impact for the industry.
The Employment Rights Act 2025 has been described by the UK government as the biggest upgrade in employment rights for a generation, with measures intended to strengthen workers’ rights and improve workforce stability.
With the Act receiving Royal Assent in December, construction professionals and employers ought to be aware of the changes and how they may impact planning for future projects.
Some of the more significant changes are:
Unfair dismissal rights
What’s changing?
The qualifying period for an employee to be eligible to claim unfair dismissal will reduce from two years’ service to six months.
Impact
Employees will have protection from dismissal at an earlier stage. Suitability for employment will need to be assessed carefully, and proper use should be made of probationary periods.
Where additional staff are needed for projects, consideration should be given to how they should be engaged. Employees on short-term contracts that exceed six months will qualify for protection.
How to prepare
- Review recruitment practices and approach to probationary periods.
- Consider how staff are engaged and how the arrangements may be affected by the new rules.
- Introduce management training on relevant issues.
Zero-hours contracts
What’s changing?
Zero-hours contracts will not be banned, but employers will be obliged to offer guaranteed hours to qualifying workers after a reference period, which reflects the actual hours worked during that period.
Qualifying workers will be those on zero-hours and low-hours contracts, including agency workers. There will also be a new right to reasonable notice of shifts and changes in shifts, with compensation payable for short-notice changes.
Impact
Construction projects often demand a flexible workforce. As flexible work models become more difficult to implement in practice, consideration will need to be given to how this may affect issues such as timescales and pricing.
How to prepare
- Audit current workforce to understand reliance on flexible labour and how the new rules may impact current and future projects.
- Consider how to manage obligations from an administrative perspective.
Collective redundancies
What’s changing?
Under previous rules, employers proposing 20 or more redundancies “at one establishment” within 90 days had to go through a process of collective consultation before making any redundancies. If employers did not comply, they were liable to pay a protective award of up to 90 days’ pay per employee.
Under the new rules, the trigger for collective consultation will apply where 20 or more redundancies are proposed across the business as a whole, and the penalty for non-compliance will increase to 180 days’ pay.
Impact
Where workforce reductions are required across various sites, even if the total number of staff or redundancies at each site is less than 20, taken together, collective consultation obligations may be triggered.
Employers or professionals with responsibilities across multiple sites will need to be alert to collective obligations being triggered.
How to prepare
- Review processes to determine how to keep track of redundancies across sites on a rolling basis.
- Offer training for managers on new obligations, given the significant consequences of getting it wrong.
Family rights and sick pay
What’s changing?
Paternity leave and parental leave will become ‘day one’ rights. Statutory sick pay will also be payable from the first day of absence for all employees.
Impact
Employees may be more inclined to take time off due to sickness because this will be paid from the first day.
More employees will be eligible to take time off for family reasons, which will need to be factored into project planning.
How to prepare
- Review absence management procedures and ensure managers are aware of how to tackle issues with sickness absence.
- Review and update relevant policies and procedures.
- Update payroll processes.
Harassment
What’s changing?
The duty on employers to take ‘reasonable steps’ to prevent sexual harassment of their employees will change to a duty to take ‘all reasonable steps’. It also introduces an obligation on employers to not permit harassment of their employees by third parties.
Impact
Employers already had a duty to provide their employees with a safe working environment, but employers should pay specific attention to harassment under the new rules.
How to prepare
- Conduct a risk assessment to assist in determining when harassment could arise on particular projects and how this can be avoided.
- Review existing policies and processes in relation to harassment at work to assess whether they are sufficient to meet new obligations.
- Offer staff training on relevant issues.
The Act also includes various other measures which may impact construction businesses and projects.
The changes are expected to be delivered in phases across a two-year period. Construction professionals are advised to keep up to date with the Act’s progress to ensure they are ready when all of the changes come into force.
Nicola Smyrl is a partner at Taylor Walton Solicitors.
OMG, appears to have been drawn up by those who’ve not been at the coal face of construction! All very theoretically plausible, utopian & desired. But in this harsh & unpredictable real world of construction, this policy can only add to the ever increasing costs of all construction projects, in particular housing, which is already increasingly unaffordable! I suggest that Angela Rayner & the Labour Party take a real world review of this Bill, before construction goes the same way as so many U.K. businesses, as a result of becoming unviable due to Labour’s last budget, such that our economy actually grows, a fact that Labour obviously fail to comprehend!