New bill could reshape how construction firms hire, manage and engage with their workforce

UK employment law is set to receive a major shake up by virtue of the Employment Rights Bill (ERB). Designed to give workers more rights, the ERB could reshape how construction firms hire, manage and engage with their workforce. As well as the headline changes (such as making unfair dismissal a day one right and removing the “waiting period” for statutory sick pay), we have picked out a few key proposals which are likely to have a significant impact on day-to-day life at a construction firm.

Less flexibility, more complexity

Construction thrives on adaptable staffing to meet shifting project demands, but the ERB’s push for job security could tighten the reins. The idea behind the ERB is to create job security, but this will inevitably limit flexibility.

Zero-hour contracts have not been banned, but one notable proposal is the duty to offer guaranteed hours to zero (and low) hour workers which reflects the hours they have worked over a set “reference period” (essentially a lookback period of – we expect – 12 weeks). This would extend to agency workers, with responsibility for offering the guaranteed hours likely falling on the end hirer, as opposed to the agency.

Beyond guaranteed hours, the ERB also introduces three key rights for workers:

• Reasonable notice of any shift that the employer requests or requires a worker to work;
• Reasonable notice of shift changes and cancellations; and
• Payment for cancelled or changed shifts at short notice.

On Monday 15 September, the ERB entered a parliamentary “ping-pong” stage between the House of Lords and the House of Commons. After reviewing the Lords’ proposed amendments, the Commons rejected most of them. For example, the Lords had proposed changing the right to be offered a guaranteed hours contract into a right to request a guaranteed hours contract – a move the Commons declined to adopt.

It’s worth keeping an eye on how this proposal develops as it passes through Parliament, and on the impact of consultation. This change will increase operational costs and introduce further complexity in workforce management and contractual arrangements. Employers will need to monitor working patterns closely and potentially reassess their staffing models.

Fire and re-hire

Picture this: work on a new project is going well, but your client decides that they need you to start and finish two hours earlier. This doesn’t align with your employees’ contractual working hours, so you consult with employees to move their start and finish times, but you can’t come to an agreement. What can you do? For a long time, one option here would have been to consider dismissing the employees and offering them re-engagement on new terms (with new working hours).

From October 2026, this won’t be an option – it will be automatically unfair to dismiss an employee for refusing to agree to restricted variations such as changes to pay, leave entitlement and shift patterns, unless the employer is facing severe financial difficulties. Exactly what this will look like is still being debated, but regardless, it’s safe to say that this proposal would limit an employer’s options.

Higher thresholds to prevent third party harassment

Under the current proposals, employers must not permit third parties (such as clients or subcontractors) to harass their employees – and an employer will have “permitted” this if they have failed to take all reasonable steps to prevent it from happening.  Employers naturally have less control over third parties, so this could prove a particularly onerous requirement for the construction sector, given that employees are frequently asked to work alongside subcontractors.

To prepare for this change, we suggest that a practical next step for employers would be to review their terms and conditions in place with subcontractors, and consider introducing clear obligations around conduct, particularly in relation to harassment.

Lucy Gordon is a partner at Walker Morris