PwC comments on the Employment Rights Bill

Ban on Zero hours contracts and the right to average hours contract 

John Harding, Employment Tax and Payroll lead at PwC UK, said:

“The proposed ban on zero-hour contracts extends beyond zero hours. Workers will have the right to a contract that mirrors their typical work patterns over a defined period. Employers will appreciate the chance to weigh in on these details, giving them time to adapt their business models. The government aims to strike a balance: too many restrictions could push businesses toward short-term contracts or agency work, undermining the bill's intent. It is important not to underestimate the operational impact on businesses of implementing contracts that reflect regular hours. This change is significant in giving workers more certainty—especially those needing flexibility—and for employers, who will have to adapt their processes, particularly with seasonal workers in mind." 

Fair Work Agency 

Anna Vishnyakov, Workforce Partner at PwC UK, said:

“The Single Enforcement Body, soon to be known as the Fair Work Agency, was born out of the Taylor Review of 2017. Employers are eager to understand its remit and the timeline for enforcement activity. This new body will play an important role in ensuring that the rules governing work are not only clear to all but are also enforced effectively. By requiring employers to demonstrate proper calculation and payment of Holiday Pay and Minimum Wage, the Fair Work Agency aims to create a level playing field for businesses. Now is the time for businesses to familiarise themselves with these complex rules before any enforcement activity by this new agency.”

Ending fire and rehire

Laura Nadel, Employment Law Partner at PwC UK, said:

“The introduction of legislation to effectively ban 'fire and rehire' practices will be a shift for employers who are seeking to modify employees’ contractual terms and arrangements.  Whilst fire and rehire is typically considered to be a last resort, due to its high impact and risks, its prohibition underlines the importance of a robust and meaningful consultation process. This change shows a clear need for strategic workforce planning, effective communication during consultations and for collaborative efforts with employee representatives.”

Day One Rights for workers

Laura Nadel, continued:

“The introduction of day one unfair dismissal and parental leave rights for workers has been a key area of interest for employers in recent months. There will be a need for employers to adapt to these enhanced protections and benefits for new hires from their first day, and be mindful of the impact of this on the existing workforce. This change highlights the importance of revisiting onboarding processes, updating the wording of employment contracts and policies, to ensure compliance, and having robust management procedures in place. The Government will consult on the use of statutory probationary periods, with the Government’s preference to have a nine month statutory probationary period in place. The statutory probationary period is intended to provide balance between offering job security for employees and giving employers a greater degree of confidence in making new hires.  The changes to unfair dismissal protections will not come into effect any sooner than Autumn 2026, meaning that employers have time to prepare.” 

Genuine Living Wage

Anna Vishnyakov, Workforce Partner at PwC UK said,

“While the genuine living wage isn’t specifically mentioned in the Employment Rights bill, this formed a crucial part of the Government's plan to Make Work Pay. The Government has already written to the Low Pay Commission to change its remit to include for the first time a consideration for the cost of living. Workers and employers are keenly anticipating the announcement of the new rates from April 2025, with significant increases expected based on the revised forecasts from the LPC. Many employers, especially those in retail, consumer and hospitality, will be considering the impact of the increase in minimum wage on the rest of the workforce as pay differentials may be squeezed. Thinking differently about how they provide value and incentives to these employees will be key.”