Employment Rights Bill: Guide for Employers

The Employment Rights Bill, once enacted, will catalyse the most significant overhaul of UK workplace rights and responsibilities in a generation.

It forms part of the government’s stated ambition to modernise employment law and improve protections for workers while maintaining flexibility for businesses. According to the government, the Bill addresses long-standing concerns around insecure work, inadequate enforcement of existing rights and the perceived imbalance in the employment relationship, especially in sectors reliant on casual labour.

For employers, however, the Bill signals a sharp increase in regulatory expectations, creating new legal duties, narrowing room for discretion in managing staff and increasing the risk of claims and enforcement action if existing practices are not reviewed and adapted in time.

While the nature of the reforms remain subject to amendment, most recently in July 2025, key measures include day-one protection from unfair dismissal, a statutory right to request flexible working from the outset of employment, restrictions on fire and rehire, tighter rules on fixed-term and zero-hours contracts and new enforcement powers for a centralised agency. Larger employers will also face new reporting duties and equality-related action planning requirements.

Although much of the detail remains to be confirmed, the overarching direction of travel is clear for employers: the Bill will create new legal risks, it will increase administrative demands on organisations and it will narrow the scope for informal flexibility in managing staff, with phased implementation expected from October 2025 through 2026 and into 2027.

Employers of all sizes and sectors will be affected by the new provisions, with notable heightened exposure for those relying on casual labour, regular contract changes or probation-based dismissals.

Contracts, policies and personnel training will need updating well in advance, and the risk of tribunal claims and regulatory scrutiny is set to rise. Waiting until implementation to adapt to the changes would be an avoidable mistake.

This guide sets out the status of the Bill to date. To discuss how to prepare your organisation for the reforms, contact us.

 

Section A: Background to the Employment Rights Bill

 

The Employment Rights Bill has its roots in commitments made by successive Conservative governments following the 2017 and 2019 general elections. The 2019 Conservative manifesto promised to introduce measures that would make the UK the best place in the world to work, including a focus on transparency, fair treatment and enforcement of rights. Although the widely anticipated Employment Bill was initially expected during the 2019–2021 parliamentary session, progress was delayed, in part due to the COVID-19 pandemic and its economic impact.

Public concern during the pandemic about precarious work and lack of access to sick pay brought renewed scrutiny to the framework governing workers’ rights. Employers faced criticism over the use of fire and rehire tactics, zero-hours contracts and non-standard working arrangements. In response, the government committed to delivering stronger statutory protectio.s and improved oversight of employment practices.

The Employment Rights Bill, introduced in 2024, aimed to reflect these concerns, consolidating and expanding on previous proposals, incorporating recommendations from the Taylor Review of Modern Working Practices and findings from parliamentary inquiries and consultations.

 

Section B: Proposed changes under the Employment Rights Bill

 

Should the Bill be enacted as currently drafted, it will introduce the largest single package of workplace reforms since at least the Equality Act 2010 and the 1998–2002 family-friendly and dispute resolution legislation. It simultaneously reshapes dismissal law, trade union rules, family leave, sick pay, whistleblowing, zero-hours contracts and pay transparency duties, and creates a new enforcement agency. No single post-2000 employment Act has attempted such a wide-ranging overhaul in one legislative vehicle.

Following amendments put forward in July 2025, the key changes under the Employment Rights Bill include:

 

1. Day one employment rights

 

The Employment Rights Bill will extend certain protections to the very start of employment, from day one of engagement.

The changes will arrive in two distinct phases rather than immediately on Royal Assent.

From 6 April 2026, new recruits will have day-one eligibility for statutory paternity leave and unpaid parental leave, and Statutory Sick Pay will become payable from the first day of absence with no lower-earnings limit or three-day waiting period.

A broader package follows in 2027. After further consultation, the Bill will introduce a day-one right not to be unfairly dismissed, subject to a statutory probation model that is still to be designed. At the same time, a “default right” to request flexible working, building on the 2024 day-one reforms already in force, will take effect, together with stronger protections for pregnant workers and new restrictions on zero-hours contracts.

Employers should therefore plan for family leave and sick pay changes by spring 2026, while preparing for the more far-reaching dismissal and scheduling reforms that are slated for the following year.

 

2. Changes to casual and fixed-term contracts

 

The Employment Rights Bill will curb the use of zero-hours arrangements, but the detail and timing have shifted. The Government’s July roadmap confirms that a ban on “exploitative” zero-hours contracts and parallel rights for agency workers is scheduled for 2027, after a dedicated consultation in autumn 2025. Instead of prescribing a fixed number of guaranteed hours in the primary legislation, the Bill now creates a framework power: once an individual has worked a predictable pattern for a reference period, expected to be set by secondary regulations, the employer must offer a contract reflecting those hours.

Regulations will also tackle anti-avoidance, for example repeated short contracts designed to reset the clock, and ensure pay parity for any agency workers who accept predictable hours offers.

Non-government amendments that would have replaced the outright duty with a simple “right to request” contract stability, and that would have excluded very low-hour workers, did not secure ministerial support and are unlikely to progress. Currently, therefore, employers should plan on the assumption that predictable-hours contracts will become mandatory once the reference-period test is met.

For fixed-term contracts, the Bill retains its original enabling power allowing ministers to restrict successive renewals, require objective justification for repeated use and mandate conversion to permanence after a prescribed period. No government amendments have altered this section, but the Department for Business & Trade is expected to consult on thresholds and exemptions during the 2025–26 consultation waves.

Employers relying heavily on rolling fixed-term arrangements should monitor that process and be ready to justify, or redesign, their short-term hiring models once the regulations are finalised.

 

3. Fire and rehire restrictions

 

Under the July 2025 Government-backed amendments, dismissal followed by re-engagement will be automatically unfair if the employer is trying to impose a “restricted variation” – currently any change to pay, pensions, contractual hours, holidays or the insertion of a new flexibility clause. The only defence is to prove that refusing the change would place the organisation in imminent, severe financial distress, while public bodies must show their statutory functions would become financially unsustainable.

For all other contractual changes, the automatic ban does not apply, but tribunals must still examine the business reason, the consultation carried out and any inducements offered when deciding overall fairness under section 98(4) ERA 1996.

It is also automatically unfair to dismiss staff in order to replace them with agency or contract workers unless the same insolvency defence is met.

A new Acas Code, due to take effect alongside the legislation on 1 October 2026, will set out the procedural standards employers are expected to follow. Failure to comply could increase compensation by up to 25 %.

Government guidance reiterates that dismissal and re-engagement should remain a tool of last resort and that employers must exhaust reasonable alternatives first.

Breach of the new regime can expose businesses to uncapped unfair dismissal awards.

 

4. Trade union rights strengthened

 

The Employment Rights Bill still aims to simplify union recognition and strengthen workplace access, but the roadmap and July amendments clarify timing and scope.

From 6 April 2026 a streamlined procedure will enable unions to gain statutory recognition more quickly, supported by electronic and on-site balloting in place of the current postal-only system.

From 1 October 2026, employers must grant unions reasonable access for recruitment, information sessions and other lawful activities. Organisations will also have to inform new starters of their right to join a union. Guidance will set sector-specific expectations, with a focus on low-density industries such as hospitality, logistics and social care.

On Royal Assent (expected autumn 2025) most of the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023 will be repealed. Ballot-notice and re-ballot requirements will be relaxed, effectively shortening the lead-in to lawful industrial action.

Dismissal and detriment protections for employees who strike lawfully will be expanded at the same time.

New sanctions will prohibit behaviour that seeks to deter membership or undermine collective bargaining. Tribunals will be able to increase compensation where employers obstruct union access or recognition.

 

5. New enforcement powers

 

The Employment Rights Bill creates a single regulator, the Fair Work Agency (FWA), which will take over most frontline enforcement of workplace legislation from 6 April 2026. It is expected to absorb the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and HMRC’s National Minimum Wage team, giving workers one point of contact for pay and rights complaints.

The FWA will be able to enter premises, demand documents, interview staff and issue compliance or improvement notices without waiting for individuals to bring tribunal claims.

Where underpayments or breaches are found, it can recover arrears on the worker’s behalf and levy civil penalties; persistent or wilful non-compliance may be referred for criminal prosecution. The Agency will also publish statutory codes and sector-specific guidance, and tribunals will be able to take that material into account when assessing claims.

Beyond enforcement, the FWA has a promotional role: it will run a public helpline, collate best-practice resources and oversee awareness campaigns so that both employers and workers understand their rights and duties under the new regime.

 

6. Equality, inclusion and workplace standards

 

Under the July 2025 roadmap, large employers (i.e. those with 250 or more workers) will be required to publish an annual equality and inclusion action plan.

Voluntary reporting and action plan templates will be available from April 2026, becoming compulsory during 2027 once the enabling regulations are in place. Each plan must describe progress on closing the gender pay gap and set out concrete steps to improve workforce diversity and inclusion.

The Government has also confirmed that the mandatory pay gap regime will be widened to cover ethnicity and disability.

Precise data fields and calculation methodologies will be consulted on in autumn 2025, with implementation aligned to the 2027 start date for the wider equality action plan duty.

Employers should begin auditing HR systems to ensure they can capture self-reported ethnicity and disability information on a sufficiently granular basis.

Workplace wellbeing also features prominently in the Bill. From 2027, organisations of the same size threshold will have to produce a menopause action plan, explaining how they support affected employees through policies, adjustments and manager training.

Statutory guidance and an Acas toolkit will also be issued well before the effective date to help employers identify reasonable adjustments and embed an inclusive culture.

In practical terms, therefore, employers should: establish data-collection processes for ethnicity and disability pay gap reporting; review existing gender-pay-gap narratives to ensure they can be expanded into full equality action plans; and audit sickness absence, wellness and flexible working policies to confirm they address menopause-related needs.

 

7. New and strengthened statutory rights

 

The July 2025 amendments broaden the Bill’s bereavement leave provisions so that time off will be available not only for deaths of close relatives, but also for pregnancy losses that occur before 24 weeks, including miscarriage, ectopic pregnancy and failed IVF transfers. Ministers will consult on evidential requirements later in 2025, with the new right scheduled to take effect in 2027 alongside wider family-friendly reforms.

Whistleblowing protection will be strengthened from April 2026. The Fair Work Agency will assume investigatory powers, anonymous electronic reporting will be permitted and the definition of “worker” entitled to protection will widen, although proposals for a separate Office of the Whistleblower and criminal penalties have not secured government backing.

Employers must therefore ensure that their internal channels are accessible, confidential and supported by clear anti-retaliation guarantees.

From 1 October 2026, employers will also come under a statutory duty to take “all reasonable steps” to prevent sexual harassment, including misconduct by customers or other third parties. A statutory code, due in early 2026, will set out the practical benchmarks for training, risk assessments and reporting routes, and tribunals will be able to uplift compensation by up to 25% if those benchmarks are ignored.

A new clause 22A will render void any confidentiality clause, whether in an employment contract or a settlement agreement, that seeks to silence disclosures of harassment or discrimination or criticism of the employer’s response. Commercial secrecy clauses may remain, but attempts to gag equality-related disclosures will be unenforceable once the section commences during the 2026 implementation window.

 

Section C: When will the Employment Rights Bill become law?

 

The Employment Rights Bill was introduced in the House of Commons in October 2024, received its second reading that December and completed both committee and report stages during early 2025. It cleared Lords Committee on 28 June 2025 after ten days of clause-by-clause debate, growing from 310 to 318 pages as only minor technical amendments were accepted.

Report-stage debates are scheduled throughout July, with Third Reading and any Commons “ping-pong” expected immediately afterwards. On that timetable, Royal Assent is anticipated in the autumn 2025 parliamentary session.

The Government’s July 2025 roadmap splits implementation into three main waves, aligned with the common start dates of 6 April and 1 October:

 

• Royal Assent (autumn 2025) – immediate repeal of most of the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023; streamlined strike-ballot rules; and explicit protection from dismissal for lawful industrial action.
• 6 April 2026 – launch of the Fair Work Agency; day-one rights to statutory paternity leave and unpaid parental leave; Statutory Sick Pay extended by scrapping both the lower-earnings limit and the three-day waiting period; strengthened whistleblowing regime; electronic and workplace union balloting; simplified union recognition; and the maximum protective award for collective redundancy failures doubled.
• 1 October 2026 – new duty on employers to take “all reasonable steps” to prevent sexual harassment; fire and rehire restrictions with an accompanying Acas Code; tighter tipping rules and a two-tier procurement code; enhanced union access rights; and longer employment tribunal time limits for most claims.
• 2027 (staggered) – day-one unfair dismissal right (subject to a statutory probation model), restrictions on zero-hours contracts with parallel agency worker protections, regulation of umbrella companies, mandatory gender pay gap and menopause action plans, expanded pregnancy protections, revised collective consultation thresholds and statutory bereavement leave for pregnancy loss.

 

To finalise secondary legislation, the Department for Business & Trade will consult in three stages:

 

• (1) summer–autumn 2025 on the probation model, adult social care Fair Pay Agreement, fire and rehire code, umbrella company regulation and reinstatement of the School Support Staff Negotiating Body.
• (2) autumn 2025 on union-access rights, electronic balloting, zero-hours controls, pregnancy protections and bereavement leave.
• (3) winter 2025 to early 2026 on collective redundancy thresholds, the flexible working default, tipping law and anti-blacklisting rules.

 

Final regulations are pledged to take effect on 6 April or 1 October wherever possible.

 

Section D: Supporting legislation, guidances & Codes of Practice

 

Most of the Employment Rights Bill’s headline duties will only become workable once secondary legislation, such as statutory instruments, Acas or statutory codes and detailed guidance, detail the practical rules.

 

• Zero-hours contracts. Primary legislation creates the framework, but regulations (to be consulted on in autumn 2025 and due to start in 2027) will confirm the reference period that triggers a predictable-hours offer, set any exceptions, and define anti-avoidance measures and pay-parity rules for agency workers.
• Ethnicity and disability pay-gap reporting. The roadmap places the mandatory regime in the 2027 window; secondary legislation will fix the data fields, calculation methodology, reporting frequency and publication format after consultation.
• Equality (and menopause) action plans. Draft templates will be issued in 2026 for voluntary use, with regulations turning them into a statutory duty in 2027; those regulations will set minimum content standards, size thresholds and enforcement mechanics.
• Fair Work Agency powers. The Bill sets the Agency’s core remit and inspection powers, but statutory instruments will flesh out penalty bands, appeals, information-sharing with other regulators, and sector-specific enforcement protocols before the Agency opens on 6 April 2026.

 

Other key topics that will also depend on secondary legislation include the final list of “restricted variations” for the fire and rehire ban, the statutory probation model for day-one unfair dismissal rights and the code of practice underpinning the new duty to prevent workplace sexual harassment.

 

Section E: Employer Preparation Checklist

 

The Employment Rights Bill introduces a wide range of legal and procedural changes that will require employers to review current practices and make adjustments across contracts, policies and day-to-day management. Some reforms will take effect shortly after Royal Assent, while others will follow in later phases. Preparing early will help minimise legal and reputational risks and support a smooth transition.

The following checklist outlines the key areas where employers should focus attention over the coming months.

 

Category	Key actions aligned to the roadmap
Contractual and policy review	• Amend employment contracts to reflect the 6 April 2026 family leave changes (day-one paternity and unpaid parental leave) and the removal of the Statutory Sick Pay waiting days. • Audit probation clauses: the day-one unfair dismissal right is pencilled for 2027, subject to a forthcoming statutory probation model. • Prepare template wording for “predictable-hours” offers so you can convert qualifying zero-hours staff once regulations are finalised (consultation due autumn 2025; go-live in 2027). • Strip confidentiality clauses of any wording that seeks to gag harassment or discrimination disclosures, ahead of Clause 22A’s commencement in 2026. • Replace blanket variation clauses with narrower, business-specific wording in readiness for the 1 October 2026 fire and rehire restrictions on “restricted variations”.
Workforce planning and risk assessment	• Audit casual, agency and umbrella company workforce so you know who will gain predictable hours or parity rights once the 2027 zero-hours reforms arrive. • Map roles that may be affected by fire and rehire limits; build financial distress evidence templates in case a “restricted variation” becomes unavoidable. • Model extra cost exposure from the April 2026 SSP extension and the doubled collective redundancy protective award.
Training and internal communication	• Train line managers on the new Acas fire-and-rehire Code (draft due early 2026) and on the duty to take “all reasonable steps” to prevent third-party sexual harassment before it takes effect in October 2026. • Refresh whistle-blowing training to reflect the Fair Work Agency’s powers from April 2026 and wider detriment protection. • Communicate family leave, sick pay and industrial action changes to staff ahead of each commencement date.
Equality, diversity and inclusion	• Draft a voluntary equality action plan and begin collecting ethnicity and disability pay gap data so you can publish mandatory plans when they become law in 2027. • Update anti-harassment policies and roll out refreshed training in advance of the October 2026 duty to prevent harassment. • Start designing menopause support measures; menopause action plans become voluntary from April 2026 and compulsory in 2027.
Union and employee relations	• Review recognition procedures and contingency plans now that most of the Trade Union Act 2016 will be repealed at Royal Assent (autumn 2025) and electronic/workplace balloting becomes lawful in April 2026. • Prepare site access protocols to accommodate the new union-access duty starting 1 October 2026.
Enforcement and oversight readiness	• Centralise wage, leave and working time records so they are inspection-ready for the Fair Work Agency’s launch on 6 April 2026. • Allocate responsibility within HR/Legal for monitoring forthcoming consultations (three waves between summer 2025 and early 2026) and for implementing secondary legislation as it is finalised.

 

 

Section F: Need assistance?

 

In light of the extent of the proposed changes, employers are advised to begin preparations now, particularly in relation to employment contracts, workplace policies and internal processes. Although some reforms may not take effect for over a year, early action can reduce legal risk, support employee engagement and demonstrate a proactive approach to compliance.

Larger employers may need to allocate resources to prepare for the new pay gap reporting duties and to begin drafting or updating equality action plans.

The reforms introduced by the Employment Rights Bill will therefore require all UK employers to act decisively and with care. Early planning, clear documentation and active engagement with staff and unions will reduce the risk of legal disputes and ensure compliance once the new framework takes effect.

For specialist guidance on how to prepare your organisation for the upcoming reforms, ensuring compliance, mitigating risk and supporting positive workforce relations, contact us.

 

Section G: Employment Rights Bill FAQs

 

What is the Employment Rights Bill?

The Employment Rights Bill is a legislative proposal introduced by the Labour government in 2024 to overhaul UK employment law. It includes new entitlements for workers, stricter limits on certain employment practices, and enhanced enforcement powers for regulators.

 

When will the changes take effect?

According to the government’s roadmap, the initial ERB reforms are scheduled to go live on at Royal Assent, expected in autumn 2025, with the bulk of employer measures following on the common commencement dates of 6 April 2026 and 1 October 2026. The final phase, including the day-one unfair dismissal right and the zero-hours-contract restrictions, will roll out during 2027.

 

Do employers need to act now?

While some detail is still to be confirmed, the direction of travel is clear. Employers should begin reviewing contracts, policies, and working arrangements now to prepare for the new duties and reduce legal risk.

 

Will the Bill apply to existing staff or only new hires?

Most provisions, including day-one rights and changes to statutory leave, will apply to all employees once the relevant parts of the legislation come into force.

 

Are small businesses exempt from the new rules?

No. While some reporting duties may only apply to larger employers, most of the core rights and obligations will apply regardless of business size.

 

How will the new rules be enforced?

A new statutory enforcement body, the Fair Work Agency, will be established to oversee compliance. It will have powers to investigate, issue penalties and bring tribunal claims on behalf of workers.

 

What are the main risks for employers?

Legal claims, reputational damage and fines for non-compliance are key risks. There is also the risk of operational disruption if policies are not updated in time or staff are not trained to apply the new rules.

 

Will contracts need to be rewritten?

In many cases, yes. Employers will need to audit and update employment contracts to reflect changes such as day-one rights and revised sick pay entitlements. Template contracts and handbooks should also be reviewed.

 

 

Section H: Glossary

 

Term	Definition
Employment Rights Bill	A legislative proposal introduced by the Labour government in 2024 aiming to overhaul workplace rights in the UK through a wide range of reforms.
Day-One Rights	Legal entitlements that apply from the first day of employment, including unfair dismissal protection and the right to request flexible working.
Statutory Sick Pay (SSP)	A government-mandated payment made by employers to eligible employees who are off work due to illness. The Bill proposes removing the waiting period.
Zero-Hours Contract	A type of employment contract where the employer is not obliged to provide minimum working hours. The Bill seeks to restrict exploitative use of such arrangements.
Fixed-Term Contract	A contract of employment with a specified end date. Employers may be required to justify repeated use under the new rules.
Fire and Rehire	A practice where employees are dismissed and offered re-engagement on new terms. The Bill introduces restrictions and a formal code of practice.
Fair Work Agency	A new enforcement body proposed under the Bill, with powers to investigate breaches, impose penalties and support workers’ claims.
Trade Union Recognition	The formal acceptance by an employer of a trade union’s right to represent staff. The Bill simplifies the process for union recognition.
Equality Action Plan	A document setting out measures an employer will take to address workplace inequalities, required annually for employers with over 250 staff.
Secondary Legislation	Legal rules made by ministers under powers granted by an Act of Parliament. Much of the detail under the Employment Rights Bill will be set out in secondary legislation.
Statutory Leave	Leave entitlements prescribed by law, such as parental or bereavement leave. The Bill expands eligibility and access in several areas.
Tribunal Claim	A formal legal complaint brought by an employee or worker against an employer, usually for breach of employment law.