New legislation is bringing the UK up to speed with employment rights in Organisation for Economic Co-operation and Development (OECD) countries, according to employment minister Kate Dearden. Speaking at the International Labour Organization’s ministerial conference in Geneva on Sunday on measures including statutory sick pay and guaranteed hours for zero-hours workers, she claimed the UK now has “a level playing field with most OECD countries”.
“After lagging behind, we’re now in a place where we’re matching rights in other countries and providing those opportunities for our own workforce,” she added.
According to the OECD’s Employment Protection Legislation indicators, the UK has historically sat at the employer-flexible end of the scale – lower dismissal costs, a waiting period before statutory sick pay took effect, and fewer procedural barriers than most continental European peers. But how does it stack up when looking at one of the Act’s most contested measures?
How UK Some Employment Rights Compare to OECD Peers
When it comes to sick pay – cited by 43% of employers and 36% of employees as the ERA measure with the biggest expected impact at work, according to an Acas/YouGov survey – the UK has moved significantly closer to the OECD norm. Until April 2026, UK workers received no statutory sick pay for the first three days of illness; most OECD peers have long provided income replacement from day one. From 6 April 2026, the UK joined them. The change also extended eligibility: the Lower Earnings Limit, which previously excluded workers earning under £125 per week from SSP entirely, has been removed – bringing an estimated 1.3 million additional workers into coverage for the first time.
The table below compares statutory sick pay across the UK and five of its closest OECD peers.
| Country | Waiting period | Rate | Maximum duration | Who pays |
UK (before 6 April 2026) | 3 days | £118.75/week (flat rate; employees needed to earn at least £123.25/week to qualify) | 28 weeks | Employer |
| UK (from 6 April 2026) | None | 80% of average weekly earnings or £123.25/week, whichever is lower | 28 weeks | Employer |
| Germany | None | 100% of salary for 6 weeks, then ~70% via statutory health insurer | 6 weeks (employer) + up to 72 weeks (state) | Employer (6 weeks), then state (GKV) |
| France | 3 days | 50% of daily reference salary (capped at €42.97/day gross) | 12 months per 3-year period* | State (CPAM/Sécurité sociale) |
| Netherlands | None | Minimum 70% of wages | 2 years (104 weeks) | Employer |
| Sweden | None | ~80% of sickness benefit qualifying income (SGI) | Up to 364 days at 80%, then reduced rate | Employer (first 14 days), then state (Försäkringskassan) |
| Ireland | None | 70% of normal pay, capped at €110/day | 5 days per year (statutory) | Employer |
*France: the 12-month maximum applies over any 3-year rolling period. For long-term conditions recognised as “affections de longue durée (ALD)”, benefits may continue for up to 3 years.
Sick pay is where the UK has moved most clearly. On dismissal protections, the picture is different – the UK remains towards the flexible end of the OECD scale. The OECD’s employment protection legislation indicators place most continental economies – France, Germany, Italy, and the Scandinavian countries – significantly above the UK on procedural requirements and dismissal costs. The Employment Rights Act reduces the qualifying period for unfair dismissal from two years to six months, due to take effect on 1 January 2027, which moves the UK closer to the OECD median on this measure without reaching the levels of protection common in France or Germany. From January 2027, the statutory cap on unfair dismissal compensation will also be removed, significantly increasing the potential financial exposure for employers who do not follow a fair dismissal process.
The Employment Rights Act Timeline: What’s Coming Next
From April this year, the Fair Work Agency (the enforcement body for employment rights) launched, statutory sick pay became payable from the first day of illness and day-one paternity rights came into force. The next major threshold for most employers arrives on 1 January 2027, when workers gain the right to claim unfair dismissal after six months of employment, down from the previous two-year qualifying period. The Government is also consulting on guaranteed hours provisions for workers on zero-hours contracts – a measure Dearden described as addressing arrangements where people “can’t budget around” their income.
What UK Business Groups Are Saying About the Employment Rights Act
While the Government is standing behind Employment Rights Act measures, reservations about some of them persist in some institutions and among some SMEs. Employment Hero’s research, conducted across 1,047 SME leaders in January 2026, found that 78% believe the reforms will have a financial impact on their business. Only 28% said they fully understood the specific requirements, with a further 26% reporting little to no knowledge of the reforms at all.
More broadly, research from the Institute of Directors published in May indicates that 86% of business leaders believe the Employment Rights Act will harm UK growth. In April, seven major business groups wrote to Dearden setting out concerns about the Act’s trade union access provisions. On zero hours, the British Retail Consortium’s chief executive, Helen Dickinson, has warned ministers not to “regulate flexible jobs out of existence.”
For Elissa Thursfield, a specialist employment solicitor with extensive experience supporting businesses with employment law, the unfair dismissal change represents a fundamental shift in how employers should approach probation. “Probation has long been treated as an administrative formality, with the comfort of an almost two-year runway,” she said. “From January 2027 that runway shrinks to six months, so probation becomes a period that can’t be allowed to drift.”
The particular risk, she warned, is that many employers are misreading the timing. “The trap is assuming the clock resets in January 2027. It doesn’t: anyone with six months’ service on that date is protected immediately, so much of your existing workforce is in scope from day one.” With the compensation cap also removed from January 2027, the financial cost of a flawed process is considerably higher too.
For SME leaders still finding their feet with the Act, Elissa suggests the work is manageable if started now. Her advice ahead of January 2027: “Standardise your probation and performance-management processes, check your contracts and probation clauses, and get your capability and disciplinary procedures into a state where you’d actually be comfortable relying on them for a short-service employee.
“The mindset shift is the real change, moving away from ‘they’re under two years, we can let them go’ towards running a fair, documented process from the outset. Employers who put that groundwork in now will find January 2027 business as usual rather than a cliff edge.”
A decision on guaranteed hours is expected before the end of the year. How the UK lands on that measure will be the next indicator of where it sits among its OECD peers – and another compliance obligation for the SME employers still getting to grips with the changes already in force.
