The Employment Rights Bill – what employers must know, and what they can do to prepare.

The Bill is now part way through the report stage in the House of Lords.

On 1 July, the government published a roadmap confirming that the measures in the Bill will take effect in phases, with some coming into effect this year and continuing through until 2027 (the Roadmap). Most significantly, unfair dismissal rights will take effect in 2027, not Autumn 2026 as was first indicated. Most other changes will take place in April or October 2026. A limited number of trade union reforms are due to take effect this year.

On 7 July, the government released a lengthy report listing the latest set of amendments, including a new provision on non-disclosure agreements. Below we have outlined some of the key proposed changes under the Bill, including what is being proposed in the latest set of amendments, and what this could mean for employers.

The Bill is expected to have completed its passage through Parliament by September 2025.

Last updated: 11 July 2025.

Read the guide in full or jump to the relevant sections by using the links below:

• Employees need to be employed for 2 years before they obtain the right not to be unfairly dismissed. For employees with 2 years’ service, employers must provide written reasons for dismissal.

• The Bill proposes to abolish the 2-year rule and make unfair dismissal a “day one” right.
• The Bill introduces two new special provisions, (1) for employees who have not yet started work, and (2) employees in the “initial period of employment” (similar to a statutory probationary period).
• The “initial period of employment” is yet to be confirmed but the government has expressed a preference of 9 months.
• During the “initial period” dismissals are expected to follow a new modified test of fairness limited by reference to the reasons for dismissal.
• If the dismissal is for a reason of redundancy, then the standard test of fairness will apply.

• According to the recently published Roadmap, these changes are now not expected to take effect until 2027, but the practical impact for employers starts now, as every new hire from now may gain unfair dismissal rights sooner than they would have under the current law.
• For all employers, performance monitoring from day one will be crucial.
• Employers will need to review their employment contracts for new employees to ensure that probationary periods comply with the new “initial period”.
• This proposal is subject to government consultation, which has not yet started.

• The Code of Practice on fire and rehire was put in place in July 2024. The practice of dismissing employees following consultation and reengaging them on new terms remains lawful, albeit increasingly high-risk from a reputational and industrial relations perspective.

• The Bill intends to restrict an employer’s ability to use fire and rehire to change an employee’s terms of employment.
• It will be automatically unfair to dismiss an employee for refusing a contractual change to their terms of employment or where an employer intends to employ another person on varied terms to carry out substantially the same role.
• Employers will only be able to defend such dismissals if they are in a situation of extreme financial distress which would affect the ability to carry on the business as a going concern. This sets a high bar for employers and is therefore likely to only apply in limited cases.
• Following consultation, the government have confirmed that the maximum protective award for failing to inform and consult on fire and rehire will be increased from 90 to 180 days’ pay. This applies where it is proposed to dismiss and re-engage 20 or more employees during a 90-day period. The Roadmap indicates that the doubling of the protective award will happen in April 2026.
• While the ban on fire and rehire previously covered changes to any contractual term, in the latest set of amendments, the government has changed its position. Now, this measure will only apply if an employer seeks to make a “restricted variation”. These are set out in the amended provisions and include variations to pay, hours, pensions, and time off. There is also scope for regulations to add to or amend this list in time. However, for now, it would appear that changes to place of work or to workplace duties are not restricted.
• If an employee is dismissed and re-engaged to impose a contractual change not included in the above list of restricted variations, the dismissal will no longer be automatically unfair.
• While the Bill already prevents employers from dismissing an employee in order to employ another person to carry out substantially the same role, the new amendments extend this protection to prevent employers from replacing dismissed employees with non-employees, such as agency staff or contractors.
• Anti-avoidance measures have also been considered in the amendments. Variation clauses which intend to bypass the ban on fire and rehire will be void.

• Employers’ will need to comply with the Code of Practice on fire and rehire, which the government has promised to update.
• The government has dropped plans to make interim relief available as a remedy to employees affected by fire and rehire but is moving forward with the other restrictions, and we are expecting further consultation on this in the coming weeks.
• According to the Roadmap, the restrictions on fire and rehire will take effect in October 2026.

• Employers proposing to dismiss 20 or more employees at one establishment within a period of 90 days or less must collectively consult with recognised trades union or employee representatives.
• Employers making redundancies across multiple locations can avoid triggering collective consultation as long as fewer than 20 redundancies are proposed “at one establishment”.
• If an employer fails to comply with its statutory obligations, it may be required to pay a “protective award” of up to 90 days’ uncapped pay to each affected employee.

• The original proposal in the Bill was to remove the “at one establishment” requirement, meaning that all redundancies across a business would count towards the threshold for collective consultation. However, the latest amendments add a new threshold test. Collective consultation will be required if there are either 20+ proposed redundancies “at one establishment” or “some other threshold test” is met which is likely to involve counting employees across all sites/workplaces. The new threshold test will be defined in the regulations but may be based on a percentage or number higher than 20 (e.g. the lower of 10% or 100 employees across the business as a whole).
• During consultation it has been confirmed that the maximum protective award for failure to collectively consult will be increased from 90 to 180 days’ pay. The Government has also dropped plans to introduce interim relief as a remedy to employees when an employer breaches their obligations under the collective consultation requirements.

• As a result of the new threshold test, collective consultation is likely to apply far more often than before.
• The government says it will consult on other ways to strengthen the regime and has promised further guidance on the legal requirements. Much will depend on exactly where the new threshold is set.
• According to the Roadmap, the additional threshold test for collective redundancies will be introduced in 2027.

• SSP is not currently payable for the first three days of sickness absence. Anyone earning under £123 a week doesn’t qualify for SSP.

• The Bill has already proposed removing the current waiting period, so that SSP becomes payable from day one of sickness absence.
• The proposal also removes the lower earnings limit and crucially, the consultation has confirmed that for individuals earning less than the lower earnings limit, SSP will be calculated at 80% of their normal weekly earnings.

• It will be very important for employers to review and update sickness absence policies.
• Employers should start monitoring absence trends and strengthen return-to-work procedures.
• Employers should provide training for managers to confidently manage short-term absences, address capability issues, and handle medical referrals.
• The Roadmap indicates that changes to SSP are due to take effect in April 2026.

• Zero-hour contracts are lawful but cannot restrict employees from working elsewhere.

• Due to concern regarding precarious work and what the government are calling “exploitative, one-sided flexibility”, the Bill introduces a right to guaranteed hours. Employers will be required to offer guaranteed hours to workers on zero hours contract or where the minimum number of hours worked don’t exceed a “specified number of hours” during a reference period.
• The “specified number of hours” and “reference period” are yet to be confirmed, although the government has expressed a preference of a 12-week reference period.
• The employee will not have to accept the offer of guaranteed hours but it must be offered.
• An equivalent right will apply to qualifying agency workers.Under the latest set of amendments, end-hirers will be required to offer guaranteed hours to an agency worker on terms which are no less favourable than those the worker had previously been working under. This includes pay, which must be no less favourable than either the agency terms they have previously been working on or those of comparable workers doing similar work.
• Amendments also clarify that when an agency worker accepts a guaranteed hours offer from the end-hirer, they will be classified as a worker – not as an employee.

• Employers that make use of zero-hour or low hour contracts will have to ensure they offer guaranteed hours so will need to review their processes and procedures to ensure they are compliant with this new requirement.
• This is a complex regime with an ongoing set of obligations requiring exceptionally good record keeping. This will in turn create a heavy administrative burden on employers.
• Employers will need to have clear communication with workers and the ability to explain and justify decisions.
• According to the Roadmap, these changes will take effect in 2027.

• There is currently no statutory right to notice of shifts.

• The Bill proposes a right for employees to receive reasonable notice of shifts. Employees will also have the right to reasonable notice if their shift is changed or cancelled. Unless the contrary is shown, notice is not reasonable if it is less than a “specified amount of time” before the shift is due to start.
• Employers will be under a duty to make payment to a worker each time there is a change to a shift at “short notice”.
• The regime will also extend to agency workers. It will be the responsibility of both the agency and end hirer to provide the agency worker with reasonable notice of shifts. The responsibility for cancellation or curtailment payments will fall to the agency only, although this can be recouped from the end hirer.
• The proposals only captures shifts which are not already contractually guaranteed.

• Employers should look at existing shift workers and consider how much notice is currently given to workers.
• Employers may want to consider shift scheduling and explore ways to support with these new provisions.
• Further consultation is expected on how much notice must be given, payment to be made and how any compensation will be calculated.
• According to the Roadmap, these measures will take effect in 2027.

• Employees have the right to request flexible working from day one. The employer can refuse a request where it considers that one or more of the existing prescribed grounds apply.
• The penalty for breaching the statutory flexible working regime is 8 weeks’ pay, capped at £719 per week.

• Employers will still be able to refuse flexible working requests on the prescribed grounds but there will be a new requirement for any refusal to be “reasonable”.
• If an employer refuses an application for flexible working, the grounds for refusal must be stated in writing and they must explain why it considers that it is reasonable to refuse the application on those grounds.

• Employers will need to review their flexible working policies and practices in the light of the changes, and ensure managers receive training in how to handle flexible working requests.
• The new requirement for the refusal to be reasonable may have a limited impact but it remains to be seen how this will be interpreted by tribunals and government guidance.
• The government have indicated there will be a consultation to develop the detail.
• According to the Roadmap, these measures will take effect in 2027.

• From 26 October 2024, employers were under a new duty to take reasonable steps to prevent sexual harassment in the workplace.

• Employers will be placed under an obligation to take all reasonable steps.
• A complaint of sexual harassment at work is to be treated as a protected disclosure under whistleblowing legislation.
• Employers will be liable for harassment by third parties, unless they take all reasonable steps to prevent it.

• Employers should re-visit steps taken to comply with the existing preventative duty and consider any additional steps which could be taken.
• Employers who have already put reasonable steps in place should be in a good position, however, it will be important to review all anti-harassment measures to ensure all reasonable steps are being taken.
• Employers should look to carry out sector specific analysis of the types of third parties likely to meet staff and the frequency of this. They should consider contracts with third parties, consider adding signage in the workplace and carry out dedicated training of staff.
• Regulations will specify the steps that employers should take, such as carrying out risk assessments and implementing harassment policies and complaints procedures
• These measures are due to take effect in October 2026, with further regulations about harassment following in 2027. The Roadmap indicates that the whistleblowing protections will take effect earlier, in April 2026.

• NDAs place specific confidentiality requirements on parties and can be stand-alone agreements, or included as clauses in wider contracts or agreements.
• NDAs cannot prevent individuals from reporting a crime to a law enforcement agency or regulator, or from making a “protected disclosure” (i.e., whistleblowing). A clause which seeks to limit an employee’s ability to do any of these things would be void.

• Significantly, the Bill proposes to make NDAs void if they attempt to prevent a worker from making an allegation or disclosure of work-related harassment or discrimination.

• This proposal sees a move away from the routine use of NDAs as a means of securing an employee’s confidentiality, and will have implications for confidentiality wording in contracts and policies, as well as settlement agreements.

• Employers may be more reluctant to settle harassment or discrimination claims if they cannot prevent public disclosure in any event.

• It is not yet clear when this ban on NDAs will come into effect.

Return from maternity leave
• In redundancy situations, women have the right to be offered suitable alternative employment once they inform their employer of their pregnancy.

Right to bereavement leave
• There is no general statutory right to bereavement leave unless an employee’s child dies under 18 or is stillborn after 24 weeks (whereby statutory parental bereavement leave may apply).
• Currently there is no entitlement to leave for pregnancy loss that takes place before 24 weeks.

Parental leave from day one
• Employees need to have one years’ service to be eligible for parental leave.

Changes to paternity leave and shared parental leave

• Employees are required to have been employed for 26 weeks (accrued by 15 weeks before the expected week of childbirth) to be entitled to statutory paternity leave.
• Employees lose any entitlement to paternity leave and pay if they take shared parental leave and pay before exhausting their paternity leave entitlements.

Return from maternity leave
• The Bill proposes to introduce regulations to prohibit employers from dismissing or making redundant employees who are pregnant, on maternity leave or are in the six-month period following their maternity leave. This will also extend to employees who are on, or returning from, adoption or shared parental leave.

Right to bereavement leave
• The Bill will introduce a day one right to at least one week of bereavement leave for employees.
•The government has proposed an amendment extending the right to bereavement leave to employees who suffer pregnancy loss before 24 weeks.

Parental leave from day one
• The Bill intends to remove any length of service requirement for parental leave.

Changes to paternity leave and shared parental leave
• The Bill intends to remove any length of service requirement for paternity leave, making it a day one right.
• Employees will be able to take paternity leave and pay even after they have taken shared parental leave and pay.

Return from maternity leave
• Employers will need to ensure they have appropriate processes and training in place to ensure that they do not unlawfully dismiss employees who are on, or have recently returned from, family leave.
• The Roadmap indicates that this measure will take effect in 2027. Further consultation is expected in Autumn 2025.

Right to bereavement leave
• Many employers already offer some form of bereavement leave, so this might have very limited impact for some, but employers who do not have such policies in place should take steps to introduce these in preparation for the new bereavement leave rights.
• We await further detail on the necessary relationship with the deceased in order to qualify.
• The Bill is silent on pay and the expectation is that this leave will be unpaid.

Parental leave from day one
• Most employers are unlikely to see a big impact from this change as uptake of parental leave remains quite low and short in duration, partly because it is an unpaid entitlement.
• The Roadmap indicates that this change will take effect in April 2026.

Changes to paternity leave and shared parental leave
• This change widens the number of employees who will be eligible for paternity leave, however, the length of leave remains low at just two weeks.

• There is currently no proactive obligations for employers to produce action plans to accompany gender pay gap reporting or supporting employees going through menopause.

• Employers with more than 250 employees will be required to produce gender pay gap action plans to accompany their gender pay gap reports.
• Employers with more than 250 employees will need to produce and publish menopause action plans to show how they support employees through menopause.

• There will be penalties for not producing these action plans, so larger employers (with more than 250 employees) will need to ensure they are complying with the new regulations.
• Regulations are likely to make provision about the content of the plans, the form, frequency and requirements for senior approval for plans.
• According to the Roadmap, the gender pay gap and menopause action plans will be introduced on a voluntary basis in April 2026, before officially taking effect in 2027.

• No obligation on employers to keep records demonstrating compliance with holiday entitlement and pay.

• There will be a new duty on employers to keep holiday records.
• Employers will be required to keep records showing compliance with their obligations under the working time regulations with holiday entitlement (amount of leave and pay and pay in lieu when an employee leaves employment).
• No set format but records must be kept for six years and failure to comply will be a criminal offence.

• Employers should review their records on holiday and holiday pay to ensure they can demonstrate compliance.
• There has not yet been any confirmation as to when this change will take effect.

• There is no general right for trade unions to access workplaces for recruitment and organisation of members.

• The Bill aims to strengthen the rights of trade unions.
• Employers will have a new duty to inform workers of their right to join a trade union and this must be provided at the same time as the s1 Statement of Particulars and at other prescribed times (subject to secondary legislation).
• Under this new provision union officials will have the right to enter a workplace to communicate with workers or communicate with workers digitally. The Union will be able to make an access request and the employer has a short period of time to respond to this. They will have a short negotiating period to agree voluntary access. If an employer fails to comply, the union can apply to the Central Arbitration Committee (CAC) who can decide whether it should have access.
• The access purposes are to meet, support, represent, recruit or organise workers and to facilitate collective bargaining. Organising industrial action is expressly excluded.

• Employer’s will need to update documentation to include the right for their employees to join a trade union.
• This change is likely to mean trade unions will have a greater role to play in employee relations.
• Although employers are often opposed to trade union involvement, it will be important for employers (especially those with many employees who have not previously had union representation) to prepare for this change and look at managing ways to keep the unions in in a way that benefits the workplace
• The government will be required to publish secondary legislation setting out in detail the statutory process for requesting access, the grounds on which the CAC would be able to refuse requests for access and the default access arrangements which the CAC may impose.
• According to the Roadmap, the changes to trade union recognition rules are due to take effect in April 2026. The rights for trade unions to access the workplace are due to take effect a little later, in October 2026.

• Workers have the right to take part in lawful industrial action, such as strikes.

• The government is proposing various amendments relating to the process for conducting industrial action, including:
– Repealing the 50% industrial action ballot turnout threshold so no specific level of turnout is required.
– A reduction in the period of notice of industrial action to be served on the employer from 14 days to 10 days.
– An extension to the expiration date for an industrial action mandate from 6 to 12 months.
– Repeal of Strikes (Minimum Service Levels) Act 2023 which gives the government powers to set minimum service levels during strikes in essential services.
– The introduction of e-balloting.

• Employers are recommended to get ahead of these changes to avoid potential disruptions once the provisions are introduced.
• Some employers are considering putting work works councils or other consultative forums in place to give employees a real alternative to having to engage with a trade union.
• Some of these measures are due to take effect shortly after Royal Assent of the Bill later this year. These include: repeal of the Strikes (Minimum Services Levels) Act 2023; removing the 10 year ballot requirements for trade union political funds; simplifying industrial action notices and industrial action ballot notices; and, protections against dismissal for taking industrial action.

• The UK has limited state enforcement of employment rights. There is not enough funding to support the enforcement of rights and there is low risk of employers being investigated or inspected by the enforcement agencies

• A new public authority called the Fair Work Agency will be created to consolidate existing state enforcement agencies into one body in an aim to create a single place for employees to seek advice.
• The Fair Work Agency will bring together existing enforcement functions, including minimum wage and statutory sick pay enforcement, as well as introducing the state enforcement of holiday pay.
• The agency will have the authority to issue an underpayment notice to employers, detailing the amount payable, which must be settled within 28 days. A penalty of 200% of the sum due will also be imposed, payable to the Secretary of State.

• The enforcement of holiday pay will have major implications for employers who get holiday pay wrong across a workforce. It is important for employers to be aware of this and ensure compliance with holiday pay.
• The Fair Work Agency body is due to be established in April 2026 (though it is not yet clear when it will be fully up and running).

• Terms and conditions, including pay, in the adult social care sector are set by individual employers.

• The Bill provides for the establishment of a social care negotiating body, composed of representatives of employers and unions in the social care sector.
• The Bill provides that the negotiating body will be concerned with remuneration, terms and conditions and “any other specified matter”.
• The Secretary of State would be able to ratify agreements reached by the negotiating body and they would then become binding on all employers in the sector.

• The government is due to consult on its proposals for Fair Pay Agreements.
• Fair Pay Agreements will inevitably raise costs for local authorities. For them to be effective they need to be properly resourced. How much impact they have and how quickly they are introduced is largely dependent on funding and resources.

• Tribunal claims must be lodged within three months (or three months less a day) of the act in question

• The Bill will extend the time limit for brining tribunal claims from three to six months.
• This will apply to all types of claims.

• Longer deadlines are likely to lead to an increase in claims, particularly from those individuals who previously lacked time or resources to act.
• While the change could improve access to justice, it risks straining an already struggling tribunal system and increasing legal costs.
• Employers will also face extended periods of uncertainty and may need to review internal grievance procedures and invest in conflict resolution training to prevent litigation.
• According to the Roadmap, this is expected to take effect in October 2026.