The Employment Rights Bill: Important Actions for Employers

We recently welcomed Vicky Beattie from BBS Law for the second in our series of webinars around navigating changes in employment law.

Focusing on the government's proposed Employment Rights Bill, we spoke at length with Vicky Beattie from BBS Law in our recent webinar about the legislation changes, the implications for UK employers, and the impact on HR teams. Speaking with our Managing Director, Charlotte Dean, Vicky shared the latest updates as well as lots of practical tips for businesses to take action before the changes become law. If you missed the webinar, we’ve summarised all her advice in this one helpful post.

What is the Employment Rights Bill?

The Employment Rights Bill sets out fundamental changes to employment rights for UK workers. It aims to give employees improved rights at work on emotive topics such as zero-hours contracts, fire and rehire, collective redundancy, and flexible working.

The Bill had its first reading in Parliament in October 2024. At the time of writing, it has been approved by Parliament and is progressing through the House of Lords. Take a look at its progress. There have been three sets of amendments to the Bill since October - the most recent update issued on 14^th March. Further amendments are expected following consideration by the House of Lords.

This blog explains the key changes in employment rights legislation and how these will impact your responsibilities as an employer. We also highlight the key actions you can take right now to ensure your business is fully prepared for what’s to come, and indicate when to expect the changes to come into effect.

Helping clients navigate changes in employment law is just one of the areas our HR Consultants can assist. Take a look at our other HR Consultancy services.

Employer responsibilities under the new Employment Rights Law

The burning question right now is how will the changes to workers’ rights affect your organisation? Let’s take a look at all the proposals included in the Bill and the actions you can take to prepare before the legislation comes into effect.

Unfair Dismissal

The two-year qualifying period for unfair dismissal will be removed and an initial period of employment introduced, with a light touch procedure. The change will make it easier for employees to make a claim for unfair dismissal.

Take action! Review and/or intensify your recruitment processes. Consider introducing additional pre-employment screening and a more comprehensive interview process to ensure you recruit the right person for the role. Amend contracts and policies to reflect the new light touch procedure for dismissals, once regulations are confirmed. Expect to implement by October 2025 to prepare for day one unfair dismissal in 2026.

Initial Employment Period

The Bill will introduce an initial period of employment, ranging from 3 to 9 months, during which the above mentioned light touch procedure will apply for dismissals, with exceptions for redundancies. This highlights the importance of getting the stages and detail of recruitment right, and the benefits of introducing screening and a more thorough interview process.

Take action! Review and update your induction programmes to ensure new starters are fully supported though probation with regular feedback, clear objectives and robust training. Refresh management training to help line managers apply the legislation changes consistently. Set clear standards and objectives for new employees and closely monitor their performance against them.

Fire and Rehire

The Employment Rights Bill proposes to end fire and rehire practices, with limited exceptions for organisations at risk of bankruptcy. There has been significant consultation on this proposal, and while some amendments have been made, its core idea remains.

Take action! Build in flexibility by making changes to employment contracts, and terms and conditions now, e.g. add specific clauses to cover changes in shifts or workplaces. Expect to implement by October 2025.

Did you know we offer Pay As You Go HR Advice? It’s ideal for finding answers to those one-off questions, and for ad-hoc policy and contract updates.

Collective Redundancy Consultation

A new two-fold test will be introduced in 2026 to determine when consultation is required, and increased penalties for non-compliance will rise from 90 days' pay to 180 days' pay per individual.

Take action! Develop a tracking system to monitor redundancies across multiple sites to ensure compliance and avoid financial penalties.

Zero Hours Contracts and Agency Workers

There will be new rights for workers on zero hours contracts and agency workers, including the right to a guaranteed hours contract, reasonable notice for shifts, and compensation for cancelled shifts. These changes are not expected until 2027.

Take action! Audit contractual arrangements with temporary workers to identify those on zero hours contracts and assess whether they are suitable for current business needs. Consider alternative arrangements if they no longer match your requirements. Review your processes and systems (including online software) to ensure compliance and train your people to ensure they understand their employment rights.

Sexual Harassment in the Workplace

The wording change to this section is minor yet it increases the scale of employer responsibility. The current requirement of employers must take ‘just reasonable steps’ is proposed to change to ‘all reasonable steps’ to prevent sexual harassment and third-party harassment in the workplace. Expect to implement in 2026.

Take action! Update sexual harassment policies, conduct workplace risk assessments, and train staff, maintaining a thorough and complete paper trail to demonstrate compliance.

Stop sexual harassment before it starts: discover our new elearning course on Preventing Sexual Harassment in the Workplace.

Explore our HR Support Services for help with record keeping, documentation and compliance.

Flexible Working Requests

Under the new legislation, employers will be required to give careful consideration to all flexible working requests and provide a clear reason for refusal. This highlights the importance of documenting the decision-making process and building a culture where flexible working requests are properly considered.

Take action! Consider introducing trial periods for flexible working arrangements to assess feasibility and demonstrate that you are giving each request a fair and equal chance.

Family-Friendly Rights and Equality

Key changes here include the removal of qualifying service for paternity and parental leave, extended bereavement leave, and potential new protections for maternity leave.

Take action! Update your family-friendly employment policies and provide training for staff so they understand their individual rights. Keep an eye out for future regulations that will define these new protections. Expect to implement some of these changes by October 2025 and others in 2026.

Fair Work Agency

Fair Work Agency will enforce a wide range of employment rights issues, including national minimum wage, statutory sick pay, and holiday pay. We recommend auditing current practice to ensure compliance with new record-keeping requirements. This part of the Bill is not expected to come into effect until 2027.

Other changes under the Bill include:

extension of tribunal claim time limits,
removal of the lower earnings threshold for statutory sick pay, and
new record-keeping requirements for working time.

As with all policy changes, it’s good practice to review your related policies and procedures to ensure compliance. If you require any support with this or any of the other recommended actions in this blog, get in touch on 0161 941 2426.