An Employer’s Guide to the Employment Rights Bill

The Employment Rights Bill promises to become a profound piece of UK employment law history. At the time of this writing, the Bill is currently advancing through Parliament and the House of Lords, but the salient point remains that the Bill will impose a wealth of transformative implications for employers sector-wide in the UK.

The Bill is at the heart of the UK government’s “Plan to Make Work Pay” initiative, inherently built to ensure a fairer, more flexible, productive, and accessible labour market.

For established business owners, HR departments, and startup founders looking to bolster their teams, understanding the Bill’s major provisions, timelines, and potential impact is essential. Not only is staying compliant vital, but adherence to this Bill will help you attract more talent that is growing increasingly scrutinous of modern employment practices.

Businesses should act quickly and decisively to align systems, policies, and training materials to ensure they are prepared for the changes ahead. The business accountants at Hamlyns are ready to help you navigate these upcoming changes with practical accounting, tax, and financial planning advice to keep your business compliant.

With that in mind, let’s break down the key propositions, timescales, expected costs, and impact of the Employment Rights Bill.

Key Elements of the Employment Rights Bill

• Expanded Day-One Rights
  • Unfair dismissal: Protection will be extended to new hires from their first day of employment. Employers can still implement probationary periods, but dismissal during this time must be fair and follow a specific and less ‘harsh’ process.
  • Paternity and unpaid parental leave: These will become day-one rights for employees.
  • Bereavement leave: Employees will gain a new right to at least one week of leave from day one, in addition to existing parental bereavement leave. To-be-announced regulations will define the qualifying relationship to the deceased.

• Zero and Low-Hours Contracts
  • The Bill seeks to end “exploitative” aspects of zero-hour contracts.
  • Employers will be required to offer guaranteed hours to workers who regularly work more than their contracted hours over a specified period (likely 12 weeks).
  • Workers will also have the right to reasonable notice of shift changes and compensation for short-notice cancellations.

• Flexible Working 
  • Employers must provide a “reasonable” justification if they refuse a flexible working request.

• Statutory Sick Pay (SSP) Reforms
  • SSP will be payable from day one of sickness absence, eliminating the current three-day waiting period.
  • The lower earnings limit for SSP eligibility will be removed, meaning all eligible employees will be entitled to SSP, regardless of earnings. Those earning below the former threshold will receive 80% of their weekly earnings or the standard flat rate, whichever is lower.

• Restrictions on “Fire and Rehire”
  • Dismissing employees to re-engage them on less favourable terms will be restricted and may be automatically deemed unfair. There may be exemptions if the employer can demonstrate financial difficulties which are affecting the business’s viability.

• Harassment Protection 
  • The Bill strengthens employer duties to prevent sexual harassment, requiring them to take “all reasonable steps” (not just “reasonable”) to prevent harassment. Employers will also be liable for third-party harassment unless they take all reasonable steps to prevent it.

• Collective Redundancy 
  • The trigger for collective redundancy consultations will now include the number of redundancies across the entire business, not just at one establishment. The maximum penalty for failing to comply with consultation obligations will be doubled to 180 days’ pay.

• Fair Work Agency
  • A new agency will be established to enforce employment rights, including holiday pay, SSP, and minimum wage compliance. It will be granted the power to investigate breaches, impose penalties, and bring employment tribunal claims on behalf of workers.

• Trade Union Rights 
  • The Bill will simplify the process for trade union recognition, including provisions for electronic and workplace balloting. It will also repeal some of the restrictions on calling strikes and introduce protections against detriments for participating in industrial action.

Note: Many of these changes will require further consultation and will be implemented in phases, stretching through to 2027.

Key Deadlines and Actions for Employers

The Employment Rights Bill implementation is phased through 2027. Here’s a concise overview of the key dates:

• Autumn 2025: Royal Assent is expected around this time. Some strike and union laws will be affected almost immediately after. The most imminent changes will concern trade unions, fire and rehire processes, zero-hour contracts, parental rights, and bereavement leave.

• April 2026:
  • SSP will become payable from day one with no lower earnings limit imposed.
  • Day-one paternity and unpaid parental leave rights will take effect.
  • Maximum collective redundancy protective awards will be doubled (from 90 to 180 days) for breaches of consultation rules.
  • New whistleblowing protections for sexual harassment disclosure will be enforced.
  • The Fair Work Agency will be established.

• October 2026:
  • Dismissals for refusing contract changes will be largely banned (except for genuine financial viability threats).
  • Employers must take “all” reasonable steps to prevent sexual harassment, including third-party harassment liability.
  • New rights will be granted to union representatives, including expanded access rights to workplaces (including digital access).
  • Employers will be obligated to inform workers of their right to join a union.
  • The time limit for employment tribunal claims will be extended from 3 to 6 months.
  • The Fair Pay Agreement body for adult social care will be established.

• 2027:
  • A statutory probation period (expected to be 9 months) will be established, with the 2-year qualifying period removed.
  • The rights to guaranteed hours and shift notice and compensation will be granted and extended to agency workers.
  • Employers must provide a reasonable explanation for refusals to allow flexible working.
  • Equality action plans will become mandatory for large employers (for menopause and gender pay gap issues).
  • Regulation of umbrella companies will be tightened.
  • Unpaid bereavement leave will become a statutory day-one right.
  • Stronger pregnancy and maternity protections are expected.

How Employers Can Prepare for the Employment Rights Bill

• Review and amend employment contracts, handbooks, and procedures for dismissal, probation, flexible working, sickness, family leave, and harassment to reflect new regulations.
• Develop clear, documented probation processes (‌between 3 and 9 months) that support employees’ new day-one rights.
• Ensure managers are trained to handle flexible working requests fairly and legally, and provide reasonable refusals.
• Review any zero-hour contracts (if relevant) and scheduling to offer guaranteed hours based on regular work patterns.
• Update policies, training, and risk assessments for all forms of harassment, including third-party incidents.
• Prepare systems to handle day-one paternity, parental, and bereavement leave requests.
• Strategically plan for potential increased union activity and ensure compliance with new recognition and access rights.
• Expect higher legal, administrative, and payroll costs due to compliance, documentation, potential tribunal cases, and expanded sick/leave pay.
• Demands on managers could potentially increase due to new processes and potential employee requests.
• Keep a close eye on official government guidance and secondary legislation.
• Provide comprehensive training on new rights, consultation procedures, and documentation requirements.
• Proactively communicate changes to staff and potentially engage with unions (if relevant).
• Ensure systems are ready for enhanced record-keeping and potentially complex scheduling.
• Consult legal experts and professional business advisory services for guidance on these changes.

It’s abundantly clear that the Employment Rights Bill promises compliance challenges; UK employers must rethink their existing processes and strategies if they are to weather the proverbial storm. However, those who succeed will see this as an opportunity, rather than a legal obstacle that gets in the way.

Proactively understanding, preparing, and adapting to the Bill’s requirements will allow you to build a fairer, more motivated, and stable workforce well into the future.

Hamlyns provides personalised guidance to help established businesses safeguard their organisation and workforce. For information on how we can help you navigate these changes, get in touch with us today.