The Employment Rights Bill - What Does It Mean for Employers?

The Employment Rights Bill (ERB), first published on 10 October 2024, represents one of the most sweeping overhauls of UK employment law in decades, bringing forward 28 significant reforms designed to modernise and strengthen the workplace. Although Parliament has already debated its provisions, the vast majority of these changes will not come into force until 2026, following Royal Assent and a period of phased implementation.

This article will highlight the key measures due to commence and assess what they involve and the potential impacts for employers and employees. In doing so, we’ll also set out the practical action points every employer should be planning for now, so that when the ERB’s new rights arrive, your business is prepared to comply confidently.

Background of the Bill - What Has Happened So Far?

Here’s a summary of all the key events regarding the Employment Rights Bill to date… 

10th October 2024: Introduction to Parliament

On 10th October 2024, the Government formally introduced the Employment Rights Bill to Parliament as the “biggest upgrade to workers’ rights in a generation”. The Bill comprises 28 major reforms aimed at modernising employment law as part of the “Plan to Make Work Pay”.

26th November 2024 - 16th January 2025: Committee Stage & Early Amendments

At the end of 2024, the Bill entered its crucial committee stage. A total of 264 amendments were tabled, with 149 being agreed to by the committee. Major themes that led to significant debate included zero-hours contracts, trade union access, and unfair dismissal protections. 

4th March 2025: Government Response to Consultations

On 4th March 2025, the government published responses to four consultations. It also issued a press release - “Employment Rights Bill to boost productivity for British workers and grow the economy” - outlining proposed amendments to be tabled ahead of the report stage.

24th June 2025: Detailed Scrutiny Concludes at the House of Lords

On 24th June 2025, members of the House of Lords concluded their detailed scrutiny of the Bill at committee stage. On day eleven of the committee stage, speaking members put forward amendments to the Bill on subjects such as:

• Determination of harassment.
• Reporting on the impact of expanding the right to legal aid in employment tribunals.
• Establishing a review of the enforcement of labour market legislation.
• AI in recruitment and employment.

What Areas of Employment Are Being Addressed?

The Bill plans to “Make Work Pay”; in other words, it will help more people stay in work, support the productivity of workers, and improve living standards. The measures that are contained in the Bill include:

Addressing One-Sided Flexibility

• Ending Exploitative Zero Hours Contracts: Whilst the Bill doesn't go as far as banning zero-hour contracts, it sets out rules which requires employers to offer guaranteed hours, potentially covering a 12 week period. Employers must give proper notice for shifts, and workers should be paid if shifts are cancelled at the last minute. These protections also apply to agency workers.
• Stopping “Fire and Rehire” Abuse: It will count as unfair dismissal if a worker is sacked for refusing to accept worse contract terms - unless the employer can prove there was no real alternative for the business.
• Day-One Protection from Unfair Dismissal: You will no longer have to work somewhere for two years to claim unfair dismissal. The right will exist from day one. Employers can still use a probationary period to assess new staff, but there will be much stronger safeguards to define what constitutes unfair dismissal.
• Better Redundancy Safeguards: Companies will have to consult staff when they plan to cut 20 or more jobs at one site, or reach a new total across the company, to be set later. This makes sure workers aren’t left in the dark during big restructures.
• Closing Maritime Redundancy Notification Loophole: Ferry and shipping companies that run regular UK routes can’t avoid the collective redundancy notification requirement. They’ll have to follow the same notification and consultation rules as any other employer.

Ensuring Workers Get Fairer Pay for a Fair Day’s Work

• Strengthening Statutory Sick Pay (SSP): Everyone will get sick pay from day one, as the Lower Earnings Limit and waiting period will be removed.
• Reinstating the School Support Staff Negotiating Body: A dedicated negotiating body will be brought back to help improve pay and working conditions for school support workers in England.
• Fairer Pay Agreements in Social Care: A new process will be set up to agree fair pay and standards in the adult social care sector in England, and the social care sectors in Scotland and Wales.
• Strengthening Tipping Laws: Employers must involve staff when setting or updating how tips are shared, ensuring fairness and transparency.
• Reintroducing the Two-Tier Code: Employees from the private sector working on outsourced contracts must be offered similar terms and conditions to those in the public sector.
• Creating a Mandatory Seafarers’ Charter: A new legal charter will protect the rights and conditions of crew operating regular services from UK ports.
• Complying with Maritime Law: New powers will ensure UK laws stay aligned with international law by staying up-to-date with international maritime conventions.

Supporting Family-Friendly Rights

• Parental Leave From Day One: New fathers and parents will be able to take paternity leave and unpaid parental leave as soon as they start a job, removing the waiting period.
• Flexible Paternity Leave: Parents can now take paternity leave after they’ve used shared parental leave, instead of being forced to choose between them.
• Right to Bereavement Leave: Employees will have the legal right to take unpaid time off to grieve the loss of a loved one.
• Job Protection for New and Expecting Mothers: Pregnant women, those on maternity leave, and mums returning to work will be better protected from being unfairly dismissed, including for six months after they return.
• Stronger Flexible Working Rights: Everyone can ask for flexible working from day one. If an employer says no, they’ll need to explain why, and that reason has to be fair and sensible.

Prioritising Fairness, Equality, and Wellbeing of Workers

• Tougher Action on Sexual Harassment: Employers will have a stronger legal duty to take all reasonable steps, not just some, to stop sexual harassment at work.
• Whistleblower Protection: Reporting sexual harassment will clearly count as whistleblowing, giving staff legal protection if they speak up.
• Protecting Staff from Third-Party Harassment: Employers must also prevent harassment by people outside the company, like customers, clients or contractors.
• Clearer Rules for Prevention: The law will be able to spell out exactly what counts as “reasonable steps” an employer should take to protect their staff from harassment. 
• Tackling the Gender Pay Gap & Menopause Support: Employers will need to produce action plans showing what they're doing to close the gender pay gap, and how they’re supporting staff affected by menopause.

Modernising Trade Union Legislation

• Repealing the Strikes (Minimum Service Levels) Act: The 2023 law that currently limits the right to strike will be revoked. 
• Overhauling Strike Rules: Most of the Trade Union Act 2016 will be removed. Instead, strikes will need a fresh vote every 12 months and 10 days’ notice to employers.
• Strengthening Union Access: Trade unions will have stronger rights to access workplaces, including digital access, to talk to workers.
• Simplifying the Recognition Process: The system for unions to be officially recognised will be made easier and fairer, clamping down on unfair employer practices.
• Implementing New Rights for Union Representatives: Union representatives will gain extra legal protections to help them support their members effectively.
• Introducing an Employer's Duty to Inform: Employers must tell staff about their legal right to join a trade union, should each employee wish to. 
• Toughening Anti-Blacklisting Rules: The law will go further in stopping the blacklisting of trade union members, which may be made in regulations. 
• Simplifying Strike Notices: The paperwork required to organise lawful industrial action will be clearer and less burdensome.
• Protecting Workers From Punishment: Workers can’t be treated unfairly or penalised just for taking part in a strike.

Improving Enforcement of Employment Rights

• Establishing the Fair Work Agency (FWA): A new watchdog will be set up to crack down on poor employment practices. It’ll combine enforcement of minimum wage laws, agency worker rules, gangmaster licensing, and holiday pay. The agency will be able to investigate abuse, issue fines, and take unlawful employers to the tribunal on behalf of workers.
• Increasing the Time Limit to Claim: Workers will get 6 months instead of the current 3 months to bring a claim to an Employment Tribunal.
• Bringing Umbrella Companies Within Legal Scope: Firms that handle wages on behalf of agencies (like umbrella companies) will now be legally regulated to ensure workers are properly protected, following the Employment Agencies Act 1973.

What Has Been Dropped From The Bill?

The following items have been removed from the proposed Bill:

• The "right to switch off" - This was intended to allow employees to disconnect from work communications outside of office hours.
• Banning zero-hour contracts has been replaced with a requirement for employers to offer a guaranteed minimum number of hours for a given period. This is currently expected to be per 12 week period.

Key Action Points for Employers

If you’re an employer, we understand that the Employment Rights Bill provides a lot of important information to take in, and ultimately, this may impact the way that your business operates day-to-day.

However, a lot of these changes boil down to actions that you should be doing already as “best practice”, such as:

• Making wise hiring choices, since the Bill makes it tougher to fire employees.
• Managing expectations and treating staff with respect, so that they’re less likely to leave.
• Implementing proper processes so that your people management is more effective (and so you have greater visibility of what’s working well and what’s not).

Whilst not yet law, discussion around the ERB provides a good opportunity to review your existing workplace processes, policies and procedures to see if you’re doing right by your employees (including yourself). You don’t need to wait to introduce improvements to working conditions, and getting ahead of the curve will lessen the impact of the ERB - including any sudden rush to make changes - should it become law.

Here are some advantageous aspects you can review today to improve your workplace for your team, improve team satisfaction, and boost retention rates:

• Audit existing policies and practices to identify gaps in light of the new day-one rights, leave entitlements, and dismissal protections.
• Update contracts and handbooks to reflect changes in probation periods, sick pay rules, redundancy consultation, flexible working rights, and zero-hours arrangements.
• Train managers and People & Culture teams on the new legal duties around dismissal, harassment prevention, family leave, whistleblower protection, and trade union access.
• Adjust pay systems and reporting processes to meet requirements for new wage rates, gender action plans, and future pay gap reporting obligations.
• Engage People and Culture advisors early to help develop fair, compliant, and inclusive workplace policies that align with the new standards.
• Review third-party relationships, especially with agencies or contractors, to ensure compliance with updated rules and liabilities.
• Communicate clearly with staff about their new rights and protections to build trust within your team and reduce the risk of claims.
• Get ahead of enforcement by understanding the new role and reach of the Fair Work Agency, as preparation for possible inspections or investigations in the future.

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