The long-awaited Employment Rights Bill is now reaching its final stages in Parliament, with royal assent expected in late September or October.
This legislation represents one of the most significant overhauls of workplace rights in recent history, and employers should begin preparing now for the changes it will bring.
What are the key changes for employers
The Bill has been hotly debated, sent back and forth between the Lords and Commons, including
Unfair dismissal
The two-year qualifying period will be scrapped, making unfair dismissal protection a day-one right.
A statutory probationary period of around nine months will apply, offering a more flexible framework for dismissals during this stage.
Employers will need to update contracts to reflect these terms and ensure managers are trained to apply them fairly.
Harassment at work
Employers will be required to take all reasonable steps to prevent sexual harassment.
The new rules extend protections to whistleblowers and cover third-party harassment, while confidentiality clauses restricting employees from discussing harassment or discrimination will be banned.
Policies, contracts and risk assessments must be updated to ensure compliance.
Flexible working
Employees will retain the right to request flexible working, but refusals must now be reasonable, explained and subject to consultation.
Managers will need training, and contracts should be reviewed to reduce the risk of tribunal claims.
Family rights
Paternity and unpaid parental leave will become available from day one. Dismissal during pregnancy, parental leave or within six months of returning to work will be unlawful except in limited circumstances.
A new right to bereavement leave, including for pregnancy loss, will also be introduced. Employers should review their handbooks and processes in line with these new rights.
“Fire and rehire”
The practice of dismissing staff to impose new terms will be classed as automatically unfair, except where essential to preserve the business.
This change makes it vital for employers to build flexibility into contracts and consider redundancy risks carefully.
Collective redundancies
Thresholds will apply across the whole organisation, not just one site. Breaches of consultation duties could result in penalties of up to 180 days’ pay per employee.
Employers should review redundancy planning to ensure compliance.
Equality reporting
Large employers (250+ employees) will face new reporting obligations, including ethnicity and disability pay gaps and menopause action plans, in addition to gender pay gap reporting. Firms should prepare systems to gather and publish this data.
Zero-hours and irregular workers
Workers who consistently exceed their contracted hours over a 12-week period must be offered a contract reflecting those hours. They will also gain rights to notice of shifts and compensation for cancellations.
Employers reliant on irregular hours contracts will need to adapt their rostering systems.
Pay, holiday and sickness
Statutory sick pay will become a day-one right, with no earnings threshold. The National Minimum Wage and National Living Wage will merge from age 18, and the Low Pay Commission will consider cost-of-living impacts when setting rates.
Employers will also be required to keep detailed holiday pay records for six years, with criminal penalties for failures.
Preparing your business
The Bill has been met with concern across industry, with many employers highlighting the additional costs and administrative demands it will create. While some amendments have softened its impact, the reforms remain substantial.
If you would like tailored advice on how the Employment Rights Bill could affect your organisation, please contact our team.
