Employment Rights Bill: What Employers Need to Know

WHAT YOU WILL LEARN

1. The Employment Rights Bill will overhaul employment rights. Royal assent is expected in Q4 2025, though most changes will happen over 2026 and 2027 in stages.

2. Key changes include (i) guaranteed hours for people on zero hour contracts (ii) a day one right to protection from dismissal, albeit following completion of a 9 month probationary period (iii) day one SSP entitlement (iv) enhanced protections from harassment and (v) enhanced rights to flexible working.

3. Employers should not wait for Royal Assent before making changes to their employment practices and policies.

INTRODUCTION

The Employment Rights Bill represents the biggest overhaul of employment rights law in a generation. It is part of a broader plan to help more people to stay in work, raise productivity and improve living standards.

This article provides a summary of the key proposals, where the Bill currently stands in Parliament and offers guidance to employers on what they should do now to prepare.

KEY PROPOSALS

Addressing one-sided terms:

– For those who want to exercise their right, the Bill is likely to introduce guaranteed hours for workers currently on zero hour contracts, reasonable notice for shifts and compensation for short-notice cancellations of shifts.

– It will put an end to “fire and rehire” practices where employees are terminated and then re-hired on less preferential terms. Such scenarios are expected to be treated as automatic unfair dismissals, except where no reasonable alternatives exist.

– The 2-year requirement to qualify for the right to claim unfair dismissal is expected to be removed, making it a day-one right, but simultaneously introducing a statutory nine-month probationary period, allowing for a simpler dismissal process within this period.

Pay

– From April 2026, SSP will be payable from day one and for all workers, regardless of what an employee earns.

– The government is expected to double the maximum ‘protective award’ for failure to properly carry out collective redundancy consultations, from 90 days’ pay to 180 days’ pay.

Family and flexible working

– Paternity and unpaid parental leave to become day-one rights.

– Plans to introduce new protections against dismissal for pregnant women, employees on maternity leave and returning mothers for a six-month period after they return to work.

– A new unpaid right is expected to be introduced by 2027 for bereavement leave.

– In relation to flexible working requests, employers will be expected to provide reasonable grounds when refusing requests and explain their decisions.

Equality measures

– Employers must take all reasonable steps to prevent sexual harassment of their employees. This potentially represents a materially higher standard for employers.

– Introduce an obligation on employers to not permit harassment of their employees by third parties including customers and other persons outside of their business.

– Changes to the laws around non-disclosure agreements is expected, rendering clauses that would prevent workers from reporting harassment or discrimination void.

– Employers to be required to produce action plans relating to gender pay gap issues and supporting employees through menopause.

Trade union reforms

– An immediate repeal of Strikes (Minimum Service Levels) Act 2023. This legislation seeks to ensure that public services are kept working during strikes to prevent strike action from entirely stopping vital public services.

– Stronger union access and protections including a duty to inform workers of union rights and new rights for union representatives.

Enforcement and tribunal reform

– A new body (the ‘Fair Work Agency’) to be established to enforce employment rights. Its powers will allow it to investigate, inspect and act against businesses that are disobeying the law.

– Tribunal time limits will increase from 3 to 6 months for employees to bring a claim.

– Umbrella companies to be regulated under the Employment Agencies Act.

Current Status of the Bill

The Bill is currently under consideration (and may evolve before becoming law) and is expected to receive Royal Assent in Q4 2025, though most changes will happen over 2026 and 2027 in stages.

Some of the immediate changes will include trade union reforms taking effect, starting with the immediate repeal of the Strikes (Minimum Service Levels) Act 2023.

In April 2026, it’s anticipated that key changes to sick pay, parental leave and whistleblowing will take effect.

In October 2026 most structural reforms will take effect, including unfair dismissal (ending fire and rehire practices), enhanced anti-harassment duties and a suite of trade union measures.

Over 2027, remaining changes will be implemented including zero-hours protections and the unfair dismissal day one right.

WHAT EMPLOYERS SHOULD DO NOW

1. Employers are encouraged to carry out an audit of their current policies and contracts to identify what their arrangements are in relation to (among others) zero-hour contracts, sick pay, maternity and paternity pay/leave and flexible working. In addition, employers should review their dismissal, redundancy and probation policies and processes.

2. Prepare for the introduction of new day-one rights for employees and extended tribunal limits, ensuring internal processes reflect these changes.

3. Consider extending probationary periods to 9 months for all employees to ensure that the new statutory probationary period is not deemed reduced by contract.

4. Strengthen existing anti-harassment policies and consider arranging staff training to reinforce commitment to a respectful workplace.

5. Sign up to updates from ACAS and schedule internal reviews in line with expected milestones.

NEXT STEPS

We help employers navigate employment law changes with confidence. Whether you need a policy review, contract updates or legal advice on the impact of the Bill, our team is here to support you. Please reach out to us at [email protected] or 020 7952 1723 should you require any further assistance on any of the topics mentioned in this article.