UK Employment Rights Bill Sets New Rules for Businesses
The Employment Rights Bill (the Bill), published back in October 2024, brings one of the biggest changes to UK employment law in recent years with 28 reforms in multiple areas and is very near the end of its Parliamentary journey. Those in the “know”, suggest the Bill will receive Royal Assent in November 2025 with the first provisions likely to be coming into force in April 2026.
Many of the headline provisions such as the removal of the two-year service requirement for unfair dismissal won’t come into effect until 2027, but it is useful to keep abreast of all proposed changes so that you can plan for any impact the changes will have on your business.
What are the 2026 headlines to be aware of?
In April 2026, the Bill will likely introduce changes to both Statutory Sick Pay (SSP) and increased family rights.
The Bill will look to extend Statutory Sick Pay (SSP) provisions so that all employees in the UK are eligible. The aim is to remove the Lower Earnings Level and also the waiting days before SSP can be paid. The final details are being dealt with in Parliament now, so watch this space.
Also in April 2026, working families will get paternity leave and unpaid parental leave as day-one rights. This removes the current waiting periods of 26 weeks and one year. A new right to unpaid bereavement leave lets employees take time off when close family members pass away. This adds to the existing two-week paid leave that parents receive after losing a child.
In October 2026, new protections will target anti-harassment provisions and the protection from “fire and re-hire”.
The Bill significantly strengthens workplace protections in several key areas. Employers now must take “all reasonable steps” instead of just “reasonable steps” to prevent sexual harassment. The new law makes companies liable for harassment by third parties, which applies to all types without needing previous incidents.
The traditional fire and re-hire provisions in regard to contract changes are being substantially tightened. Namely it will now be automatically unfair to dismiss an employee if they refuse to agree to the variation in their contract or if the employer dismisses the employee to re-engage them on new terms, unless the statutory exemption applies. The exemption is linked to the financial position of the business, so contractual changes and consultations will now have to be carefully planned.
From 2027:
It is intended that the following changes will come into force at some point in 2027:
Greater Protection for Pregnant women:
Pregnant women and new mothers will get better protection under the law. The Bill prevents companies from dismissing them during pregnancy, maternity leave, and six months after they return to work.
Gender Pay gap and equality reports:
Companies with 250+ employees must create and publish action plans with their gender pay gap data. These plans should detail steps to reduce gender inequality and help employees dealing with menopause. The UK economy loses about £1.71 billion yearly due to menopause-related workforce issues. These changes should create more equal workplaces throughout the United Kingdom.
Removal of two year service requirement for unfair dismissal:
The much-discussed removal of the two-year service requirement for unfair dismissal claims. The new legislation makes unfair dismissal a ‘day one’ right for workers. The government plans to implement this over nine months. UK employers need to prepare for these changes.
The Bill clarifies that unfair dismissal rights don’t apply to employees who haven’t started work. It also introduces a “statutory probationary period” with modified unfair dismissal rules. The government prefers this original period to last nine months.
Employers can follow a “lighter-touch” process for dismissals related to capability, conduct, illegality, or other substantial reasons during this probationary timeframe. Employees can claim unfair dismissal for redundancy from day one since redundancy dismissals remain excluded from this modified approach.
Employers will maintain flexibility to operate their own contractual probationary periods despite these substantial changes.
Zero hours contract changes and work scheduling:
The Bill creates new obligations for employers about work scheduling and managing changes in shifts. These changes will affect 1.2 million UK workers who are currently on zero-hours contracts.
Businesses must now give qualifying workers guaranteed hours contracts based on their usual working patterns over what will likely be a 12-week period. Workers can still choose to keep their flexible arrangements if they want to. This rule tackles the “one-sided flexibility” that puts financial risks on workers due to unpredictable schedules.
The Bill requires employers to give “reasonable notice” of shifts. Future regulations will decide the exact timing. Employment tribunals will look at specific factors to determine if the notice was reasonable.
A key change requires employers to pay compensation to workers when shifts get cancelled, cut short, or rescheduled without enough notice. Agency workers will also get these protections, and companies hiring them will need to offer guaranteed hours.
Workers can take their cases to tribunals if employers don’t follow these rules or try to cut hours just to avoid these requirements.
Conclusion
The Bill represents the biggest reform to UK labour laws in decades. Your business needs to prepare for major changes ahead.
The changes will roll out gradually, which gives you time to update your policies and contractual provisions. Companies that get ready early will handle these changes better. The Bill tries to balance better worker protection with practical business needs. This new chapter in UK employment relations affects how you hire, schedule and support your entire workforce.
As always, if you would like to know more, or would like some support, please get in touch. We’d love to hear from you.
