Major changes for sick pay and paternity rights agreed but zero-rights workers still wait for answers
Six-month qualifying period for unfair dismissal agreed after negotiations unlock path to Royal Assent
The Government has announced a breakthrough on the contentious Employment Rights Bill, securing agreement between trade unions and business representatives on unfair dismissal protections that will allow the legislation to proceed.
Following intensive discussions, the qualifying period for unfair dismissal protection will be reduced from 24 months to six months, rather than the day-one right initially proposed. This compromise ensures the Bill can reach Royal Assent and meet the Government’s delivery timeline.
Worker rights changes coming April 2026
The agreement means day-one rights to sick pay and paternity leave will be delivered in April 2026, alongside the launch of the Fair Work Agency. The Government warned that without this breakthrough, reforms benefiting millions of working people, including some of the lowest-paid workers, would have been significantly delayed.
Unfair dismissal: the six-month solution
The discussions concluded that reducing the qualifying period for unfair dismissal from 24 months to six months represents a workable package, whilst maintaining existing day-one protection against discrimination and automatically unfair grounds for dismissal.
To strengthen these protections further, the Government has committed to ensure that the unfair dismissal qualifying period can only be varied by primary legislation and that the compensation cap will be lifted.
What this means for temporary workers and contractors: Those on fixed-term contracts or rolling temporary assignments will gain unfair dismissal protection after six months of continuous employment with the same employer. This represents a significant improvement on the current two-year qualifying period, though it falls short of the immediate protection some campaigners sought.
Day-one sick pay: A major win for flexible workers
Perhaps the most significant immediate benefit for temporary workers, contractors, and those on zero-hours contracts is the introduction of day-one sick pay rights from April 2026. Under current rules, workers must earn above a minimum threshold and wait three days before qualifying for Statutory Sick Pay.
The new provisions will ensure all workers, regardless of earnings level, can access sick pay from the first day of illness. This change is particularly important for lower-paid temporary and contract workers who have historically been excluded from sick pay entitlements.
Paternity leave protections
Day-one paternity leave rights will also come into force in April 2026, meaning temporary workers and contractors will no longer need to have 26 weeks’ continuous employment before qualifying for statutory paternity leave and pay.
The Fair Work Agency: Enhanced enforcement
The new Fair Work Agency, launching in April 2026, will consolidate enforcement of employment rights. For temporary workers and contractors who may be reluctant to pursue individual claims for fear of jeopardising future work opportunities, this single enforcement body could prove a crucial safeguard.
The agency will have powers to investigate labour abuses, issue penalties, and potentially bring employment tribunal claims on behalf of workers.
Uncertainty remains for flexible workers
Whilst this announcement resolves the unfair dismissal dispute, the Government’s statement does not address other controversial elements of the Employment Rights Bill that are particularly relevant to flexible workers, including:
- Reforms to zero-hours contracts and guaranteed hours
- Enhanced protections for agency workers
- The status of umbrella company arrangements
- Fire and rehire restrictions
The Government has committed to “a robust process to ensure full, fair and transparent consultation and discussion on the detail and application of the secondary legislation,” suggesting these details will be worked out following Royal Assent.
Business concerns
The Government acknowledged “the need to support small businesses in the effective adoption of these changes,” with businesses requiring time to prepare for what are described as a series of significant changes.
Sectors heavily reliant on flexible staffing arrangements, including retail, hospitality, and healthcare, face particular challenges in adapting to the new framework, especially once the full scope of reforms affecting temporary workers becomes clear.
What happens next
Following the agreement between unions and business representatives, the Bill can now progress toward Royal Assent in line with the Government’s delivery timetable and manifesto commitments to Make Work Pay.
The Government stated it “remains committed to continue engaging with trade unions, business and employers to make working lives better, support businesses and, vitally, deliver economic growth and good job creation,” with constructive dialogue and consultation continuing beyond the Bill’s passage.
For the millions of temporary workers, contractors, and flexible workers across the UK, the April 2026 implementation date for sick pay and paternity leave rights represents a concrete milestone. However, the full impact of the Employment Rights Bill on flexible working arrangements will only become clear as the Government publishes detailed secondary legislation in the coming months.
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