As employment solicitor Tony Bertin explains, the upcoming Employment Bill isn’t just about big businesses - it has something important for all employers to consider. While it’s easy to think this new legislation targets only large companies, the reality is that these provisions could impact organisations of any size. Whether you’re managing a small team or overseeing a large workforce, getting to grips with these changes now will put you in a stronger position when they take effect in October 2026.
The new Employment Bill was largely shaped by the widely publicised actions of P&O Ferries in 2022, where staff were pressured to accept new terms or face dismissal. This incident raised significant concerns throughout the industry, prompting the government to step in and introduce provisions to prevent similar practices.
Under this bill, "hire and rehire" practices will be prohibited in almost all cases, and any dismissal on this basis will automatically be deemed unfair. Notably, employees won’t need to meet a qualifying period to make a claim. Once the bill is in force, employers who attempt “hire and rehire” risk facing serious legal repercussions. For those in HR or managing employment contracts, understanding these changes now is essential for developing a compliant approach to workforce management.
A key concern with the new bill is how it impacts the Transfer of Undertakings (Protection of Employment) (TUPE) regulations, particularly when it comes to harmonising the terms and conditions of employees transferring from one employer to another.
In theory, harmonising terms upwards is always possible - most employees won’t refuse an increase in pay or benefits. However, difficulties arise when an employer attempts to make downward adjustments in employee conditions. This is especially relevant for employers in sectors like outsourced cleaning or catering, who often gain new staff through contract transitions and will face compliance challenges.
For example, if you’re taking on an outsourced contract, like catering, a thorough understanding of the benefits provided by the outgoing employer - such as Permanent Health Insurance (PHI) or death-in-service coverage - can make all the difference between a seamless transition and potential legal issues.
Imagine an employer pitches for a contract that includes PHI or death-in-service benefits. Large employers commonly provide these benefits, often including "previous risks accepted" clauses from insurers, meaning that transferring employees are automatically covered. If, however, the new employer cannot offer equivalent benefits, this could effectively be a termination of employment, triggering unfair dismissal claims under the new legislation.
To demonstrate the effects of these changes in practice, consider the following scenarios:
A mid-sized accounting firm might consider taking on a client’s department as part of a TUPE transfer. Without carefully reviewing the existing employee benefits, the new employer risks inadvertently reducing the rights of transferred employees. If a transferee discovers that their previous sick leave or death-in-service benefits no longer apply, they may have grounds to bring a claim under the new protections for unfair dismissal.
Solicitors who take on outsourced legal work from large financial institutions must also tread carefully. Many financial institutions offer comprehensive benefits that can be challenging for new employers to replicate. If an employee suffering from a terminal illness loses valuable sick leave or death-in-service benefits following a transfer, it could lead to distress and, potentially, legal claims.
Since “hire and rehire” is no longer a viable last resort, employers must conduct deep due diligence in any TUPE scenario. This approach not only reduces risk but also helps to ensure a fair transition for incoming employees. The Employment Bill’s focus on employee protection makes it essential for employers to thoroughly understand their obligations and benefits when dealing with TUPE cases.
To stay prepared, employers should consider the following:
If you’re handling TUPE transfers, harmonising employment contracts, or want to ensure your business remains compliant, Tony Bertin is here to support you.
Contact him at
t.bertin@woodstocklegalservices.co.uk or complete the form below.