The Employment Rights Act Must Work for the Voluntary Sector

The Employment Rights Act, passed by the UK Government in December 2025, represents the most significant overhaul of UK employment law in a generation, a significant opportunity to strengthen workers' rights and improve job security across Scotland, and the rest of the UK.

SCVO has welcomed the new rights for employees and workers that the Employment Rights Act introduced, including:

• The right to claim unfair dismissal after six months (reduced from two years).
• The right to guaranteed hours (for workers on zero hours and low hours contracts)
• Sick pay from day one.
• And earlier access to parental rights.

All measures that support Fair Work, an SCVO priority.

With new rights, however, comes new responsibilities which voluntary sector employers must be supported and resourced to understand and implement.

While the Act is now law, some of the most significant changes affecting voluntary sector employers are still being considered by the Government through secondary legislation, including regulations and guidance, prompting a flurry of consultations over the summer break. Every Policy Officer's dream…

Of these, the Government approach to ending one-sided flexibility- or in laymen’s terms, zero hours contracts- is likely to be of most interest to voluntary sector employers.

In the voluntary sector, like in other sectors, zero hours or sessional contracts are often used for legitimate reasons, for example, to provide cover for permanent staff or to cover busy periods. Despite this, SCVO recognises that for voluntary sector staff, job security- including guaranteed hours or Living Hours - is an essential element of Fair Work.

The Living Wage Foundation and Living Wage Scotland define Living Hours as a guaranteed minimum of 16 hours a week unless the worker requests otherwise. Similarly, the Foundation and Living Wage Scotland state that contracts should accurately reflect hours worked, positions SCVO supported in our consultation response.

To deliver meaningful change, it is essential that these reforms recognise both the voluntary sector as a significant employer - the sector employs 136,000 people, 5% of Scotland’s workforce- and the significant challenges faced by voluntary organisations, both in Scotland and across the UK.

Persistent financial and operational challenges impact job and financial security for organisations and staff across the voluntary sector, including the availability of hours. In the latest wave of the Scottish Third Sector Tracker, 97% of voluntary organisations reported facing challenges.

Plans to expand employment rights must recognise that poor funding practice undermines job security in the voluntary sector, creating uncertainty for both employers and staff. A Fair Funding approach which addresses short-term funding cycles and ingrained operational issues, including delayed decision-making and poor communication, is central to realising the UK Government’s employment rights ambitions and progressing the Scottish Government’s Fair Work First initiative. It is also essential that these overlapping initiatives are complementary and collectively progress Fair Work and employment rights, requiring joint working between the UK and Scottish Governments. The extent to which joint working has taken place is unclear.

To support implementation both governments must also produce clear and detailed statutory guidance, informed by engagement with the voluntary sector.

The voluntary sector workforce makes a huge contribution across Scotland and the UK, offering a lifeline to people, families, and communities as the ongoing cost-of-living crisis bites. This lifeline shouldn’t need to be extended to voluntary sector staff.

However, it must be recognised that progress on Fair Work and employment rights cannot be achieved without improving the funding environment in which voluntary organisations operate.

For these reforms to succeed, they must recognise the voluntary sector as a significant employer, support organisations through implementation, and ensure grants and contracts from Government, their agencies, and other public bodies, resource Fair Work and employment rights and cover the full costs of employing staff (including at least the Real Living Wage, increased NICs costs, inflation-based salary and other uplifts at least on a par with those offered to the public sector, and any new costs associated with the revised legislation). The availability of additional hours for workers in the voluntary sector, and the success of the Act's wider ambitions will depend on these issues being addressed.

Similarly, strengthening the sustainability of the voluntary sector and its workforce should be a priority for employment rights legislation. To achieve this, a more equitable way of working between the voluntary and public sectors, proportionate, community-led commissioning approaches, and progress on Fair Funding, is needed. The legislation is some way off recognising these challenges.

The UK Government can and should go further to recognise the voluntary sector's significant contribution and role as an employer by working with the voluntary sector to understand challenges, develop guidance, and ensure both the Act and secondary legislation are understood across the sector and complements the Scottish Government’s existing Fair Work agenda.