Ten employment law changes on the road ahead in transport and logistics 

The UK is on the brink of the most substantial overhaul of employment legislation in a generation. With the Employment Rights Bill now awaiting its third reading in the House of Lords and expected to receive Royal Assent as early as this autumn, the pace and volume of change appear daunting.  

The Government’s recently published implementation roadmap offers some degree of clarity on when key reforms will take effect, although much of the practical details will be set out in secondary legislation, requiring further consultation, before the changes are implemented. 

So, what do employers in the transport and logistics sector need to know, and when must they be ready? 

1. Unfair dismissal – day one rights 

One of the most debated reforms in the Employment Rights Bill is the proposal to introduce day-one protection against unfair dismissal, subject to an initial period of employment (likely to be nine months) when a modified dismissal process will apply. A House of Lords amendment to introduce a six-month qualification period is unlikely to be approved when the Bill returns to the House of Commons.  

Set to take effect in 2027, this change will significantly increase the risk of disputes and tribunal claims in the early stages of employment. Employers in the transport and logistics sector should prepare for higher costs and more complex processes when terminating staff within the first two years of employment. Well-drafted probationary period clauses, policies and processes and ensuring line managers are trained on the implications of the new day one rights will be essential to mitigate against the risks.  

2. Changes to ‘fire and rehire’ 

Likely to take effect from October 2026, dismissal and re-engagement to force through most contractual changes, commonly known as ‘fire and rehire’, will be deemed automatically unfair unless employers can demonstrate that the ‘restricted variations’ (broadly, proposed changes to pay, pensions, hours of work and holiday entitlement) are essential due to significant financial difficulties and that no reasonable alternatives were available. This sets a high bar, which will pose a particular challenge for employers in the transport and logistics sector, where operational flexibility is often critical. Compounding the risk, the maximum protective award for failing to inform and consult in a collective redundancy situation, including a proposal to dismiss and re-engage 20 or more employees, will increase from a maximum of 90 to 180 days’ pay.  

Dismissal and re-engagement is already subject to a statutory Code of Practice, which may result in an uplift of compensation awarded to an employee if the employer has failed to comply with its requirements. With the Employment Rights Bill introducing even more stringent restrictions, transport and logistics businesses needing to implement contractual changes would be well advised to act promptly while the opportunity to utilise ‘fire and rehire’ as a negotiation tool remains available. 

3. A new ‘golden age’ of trade unions? 

The minimum service levels applicable to strikes in key public services, including the transport sector, will be repealed as soon as the Bill receives Royal Assent, and the minimum notice for strike action across all sectors will reduce from 14 to 10 days soon after, potentially this autumn. From April 2026, the statutory recognition process will be simplified, making it easier for trade unions to secure compulsory workplace recognition. Transport and logistics sector business with a pro-union workforce may want to pre-empt the possibility of statutory recognition by reaching voluntary recognition agreements with unions instead, on potentially more favourable terms than might be granted by the Central Arbitration Committee (CAC) under statute.  

In addition, from October 2026, workers will have the right to be given a statement of their rights to join a union at the outset of their employment. Unions will also be granted more access to the workplace via new access agreements to meet, recruit, and organise workers and facilitate collective bargaining. The CAC will enforce this with penalties for non-compliance by employers. 

4. Redundancy changes 

A new threshold to trigger the need to collectively consult will be introduced from 2027 when redundancies are proposed across an entire organisation. This will apply alongside the existing threshold of 20 or more proposed redundancies at any one establishment. The new threshold will be subject to consultation and specified in subsequent regulations before it takes effect. It will increase the need to collectively consult for employers operating across multiple sites and, as highlighted above, the protective award for failure to collectively consult will increase to a maximum of 180 days’ pay per affected employee. 

5. Zero-hour contracts 

Expected to apply with effect from 2027, employers will be under a duty to offer low and zero-hour workers a guaranteed hours contract, based on a (likely) 12-week reference period. This will also apply to agency workers. In addition, employers will have a new duty to provide reasonable notice of shifts or changes to shifts, and workers will be entitled to compensation for cancelled, moved, or curtailed shifts. There will be an ability to contract out of this by a collective agreement, and ‘limited term’ contracts will be permitted to deal with seasonal work, but this change could pose significant financial burdens for logistics operators dealing with fluctuating demand such as in warehousing, and for gig-economy models as frequently utilised for last-mile logistics. 

6. Statutory sick pay (SSP) 

The changes will remove the existing three-day waiting period before SSP is payable and extend eligibility to all employees, regardless of their earnings. Expected in April 2026, employees will be entitled to receive SSP from their first day of sickness absence. The lower earnings limit for eligibility to receive SSP will be removed, and low earners will be paid the lower of 80% of their normal weekly earnings or the flat rate of SSP. This is likely to increase costs for transport and logistics sector employers, and it will be important to review sickness absence procedures – particularly in relation to short-term absences. 

7. Family leave rights – day one 

Statutory rights to paternity and parental leave will become day one rights from April 2026. In addition, from 2027, statutory bereavement leave will be introduced, which will provide for a week’s unpaid leave to grieve the loss of close relatives. Under a recent amendment to the Bill, bereavement leave will include pregnancy loss before 24 weeks. Employers in the sector should be prepared to update their family leave policies accordingly. 

8. Flexible working 

A new standard of ‘reasonableness’ when refusing flexible working requests will potentially make it harder for employers to justify refusing such requests. They will also be required to state their grounds for refusing a request. This will have an impact on administrative costs and may increase the likelihood of tribunal claims in respect of flexible working requests. Employers should make sure their flexible working policies are updated and be prepared to have sound reasons to justify any refusals.  

9. Extension of employment tribunal limitation periods 

With effect from October 2026, the time limit for employees to bring a claim in an employment tribunal will increase from three to six months. Employers in the transport and logistics sector should expect to see an increase in the volume of tribunal claims as a result of the larger window of opportunity, particularly in view of the various new and extended employment protections introduced under the Employment Rights Bill. 

10. Stronger duty to prevent sexual harassment, including from third parties 

Legislation came into force last year, placing a new duty on employers to take reasonable steps to prevent sexual harassment at work, including harassment from third parties. Employers found to have failed to comply with this duty risk significant financial penalties in the form of uplifted compensation. In October 2026, the Bill will extend this duty to taking all reasonable steps to prevent sexual harassment. It will also introduce employers’ liability for harassment (in relation to all protected characteristics) by third parties. The meaning of ‘all reasonable steps’ will be the subject of consultation, but employers should consider conducting risk assessments and investing in training line managers on the prevention of sexual harassment at work to demonstrate compliance with the enhanced duty. 

The Birketts view 

The Bill marks a significant shift for employers in the transport and logistics sector, introducing greater obligations and expanding employee protections. With earlier unfair dismissal rights, extended tribunal time limits and potentially stronger union influence, businesses must prepare for more complex HR challenges. A rise in administrative costs, disputes and tribunal claims is widely predicted, making it essential for employers to proactively review policies, strengthen internal processes, and seek early legal advice to reduce risk.