The Employment Rights Bill: Changes your business needs to be ready to make

The Employment Rights Bill: Changes your business needs to be ready to make

The Employment Rights Bill is currently one of the most significant pieces of proposed legislation in the UK employment law landscape.

Introduced to Parliament on 10 October 2024, the Bill reflects a determined effort by the Government to deliver on its pledge to “Make Work Pay.”

This is more than a slogan: it represents a comprehensive reform of rights for workers and responsibilities for employers, some of which have remained largely untouched for decades.

This article takes a closer look at what the Bill is, why it has been introduced, the expected timeline for its passage, and most importantly what these changes will mean for employers and employees alike. Including the changes your business needs to be ready to make.

What is the Employment Rights Bill?

The Employment Rights Bill is an ambitious attempt to modernise UK employment law, consolidating protections for workers while clarifying employer obligations.

It aims to address persistent issues such as job insecurity, unfair dismissal, and the challenges posed by zero-hours contracts and the controversial practice of “fire-and-rehire.”

It also seeks to improve statutory leave entitlements, strengthen workplace harassment protections, and make flexible working a default right.

At its heart, the Bill reflects a philosophy that decent work benefits everyone employers, employees, and the economy at large. The reforms are also intended to bolster productivity and workforce participation, particularly in sectors struggling with recruitment and retention.

Why Has the Bill Been Introduced?

This Bill is born of widespread concerns that current employment protections are outdated and fragmented. The Government has engaged in extensive consultations with employers, trade unions, and stakeholders, with over 190 engagements informing its drafting.

It is also a response to long-standing criticisms of practices such as zero-hours contracts, where workers face uncertainty over income, and “fire-and-rehire,” where employers impose new terms under threat of dismissal. Additionally, the Bill addresses shortcomings in family-friendly rights and statutory sick pay, aiming to provide a stronger safety net for those in vulnerable positions.

When Will These Changes Take Place?

The Bill is currently at the House of Lords report stage (as of July 2025) and is anticipated to gain Royal Assent towards the end of 2025, subject to Parliamentary timetabling and potential amendments. Once enacted, the reforms will be implemented in stages through 2026 and 2027, allowing businesses time to adapt.

Key milestones outlined in the Government’s implementation roadmap include:

• Immediately upon Royal Assent: Repeal of the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016.
• Spring 2026: Introduction of day-one rights to parental, paternity, and bereavement leave; removal of waiting days and lower earnings thresholds for statutory sick pay; and establishment of the Fair Work Agency.
• Autumn 2026: Prohibition on “fire-and-rehire” practices, strengthened workplace harassment protections, and reforms to zero-hours contracts.
• By 2027: Mandatory gender pay gap reporting for smaller employers, menopause action plans, and flexible working entitlements as a default right.

Key Reforms at a Glance

Some of the most notable proposed changes include:

• Unfair Dismissal Protections: Employees will gain protection from unfair dismissal from day one, replacing the current two-year qualifying period. Probationary periods will be formalised to provide employers with a fair mechanism for managing new starters.
• Zero-Hours Contracts: Workers regularly working predictable hours will be entitled to contracts reflecting that pattern. Employers will also be required to give reasonable notice of shift changes or compensate workers when shifts are cancelled.
• Fire-and-Rehire Ban: Employers will no longer be able to dismiss employees simply to impose new contractual terms, except under very limited circumstances defined in the legislation.
• Statutory Sick Pay (SSP): Eligibility will be expanded by removing the lower earnings limit and waiting days, making SSP accessible from the first day of illness for all employees.
• Family-Friendly Leave: Parental, paternity, and bereavement leave will become day-one rights, improving support for working families.
• Sexual Harassment Protections: Employers will be under a proactive duty to take all reasonable steps to prevent sexual harassment in the workplace.
• Fair Work Agency: A new regulator will consolidate enforcement of holiday pay, statutory sick pay, minimum wage, and agency worker protections.
• Effects on Employees
  For employees, these reforms are transformative. Day one rights to unfair dismissal protections and family-friendly leave will provide greater security from the outset of employment. The elimination of waiting periods for SSP will ensure financial support for workers when they need it most. The changes also create a more supportive environment for those facing workplace harassment or balancing work with caring responsibilities.

Effects on Employers

While the Bill brings opportunities for improving staff engagement and retention, it also introduces new compliance obligations. Employers will need to:

• Review and update employment contracts to reflect the new legal framework.
• Budget for increased SSP costs and potential impacts from the prohibition on fire-and-rehire practices.
• Implement robust harassment prevention strategies and manager training.
• Develop policies for flexible working and review shift allocation practices for zero-hours workers.
• Prepare for potential inspections and enforcement by the Fair Work Agency.
• The Government has acknowledged concerns about administrative burdens, particularly for SMEs, but has indicated that phased implementation is designed to ease the transition.

What Should Employers Do Now?

Proactive preparation is key. Employers should: Audit current policies on dismissals, flexible working, family leave, and sickness absence to ensure they will comply with the new framework.

• Engage with employees and unions to manage expectations and build collaborative approaches to workplace change.
• Train managers on the new rights, particularly around handling flexible working requests and preventing harassment.
• Review contractual arrangements for zero-hours and agency workers.
• Monitor developments as the Bill progresses through Parliament, as amendments may alter final obligations.
• Looking Ahead
  The Employment Rights Bill represents a landmark moment in UK employment law. While the final shape of the legislation may still change as it moves through the House of Lords, its direction is clear: stronger protections for workers and a push for fairer, more transparent employment practices.

For employers, the coming months are an opportunity to prepare not just for compliance, but for the cultural and operational shifts these changes will bring. By planning now, businesses can not only meet their new legal obligations but also position themselves as employers of choice in a rapidly evolving labour market.