Employment Rights Bill to Boost Legal Protections for Over Half of UK Workers
The UK Government has officially unveiled its detailed roadmap for the Employment Rights Bill, a transformative package of legal reforms aimed at strengthening protections for over 16 million UK workers. Positioned as the cornerstone of its "Make Work Pay" initiative, the bill promises to bring sweeping changes to employment law—enhancing job security, empowering trade unions, and placing new responsibilities on employers across all sectors.
Once fully implemented, the Employment Rights Bill is expected to modernise outdated frameworks and create a fairer, more resilient labour market. But it will also demand significant preparation and compliance adjustments from employers. Here's what businesses need to know, what's changing, and how to get ready.
What Is the Employment Rights Bill?
The Employment Rights Bill is a wide-reaching reform aimed at addressing long-standing gaps in worker protections and workplace practices. The bill seeks to:
- Improve job security through day-one protection from unfair dismissal
- Introduce statutory sick pay (SSP) for low-paid workers
- Ban exploitative zero-hours contracts
- Modernise trade union laws
- Expand leave rights, whistleblower protections, and safeguards for vulnerable workers
The government claims the bill will enhance rights for more than half the UK workforce, with a particular focus on agency staff, part-time workers, care sector employees, pregnant employees, and low-paid earners.
Summary of Key Reforms
Here’s a closer look at the major changes introduced by the bill:
Day-One Employment Rights
Employees will no longer have to complete a qualifying period to access:
- Protection from unfair dismissal
- Paternity leave and unpaid parental leave
Although a nine-month probation period will still apply for new hires, day-one rights represent a major shift in legal entitlements and employer obligations.
Expanded Statutory Sick Pay (SSP)
The bill eliminates the Lower Earnings Limit and the three-day waiting period for SSP. This will open access to 1.3 million low-paid workers who previously did not qualify, especially in hospitality, retail, and social care.
Ban on Fire-and-Rehire Practices
Employers will no longer be allowed to terminate employees only to re-engage them under reduced terms. This reform follows high-profile corporate cases and public criticism of fire-and-rehire tactics.
End to Exploitative Zero-Hours Contracts
The bill does not outlaw all zero-hours contracts but seeks to ban exploitative use, including:
- Enabling predictable hours requests
- Extending protections to agency workers
- Regulating contract terms where irregular scheduling is the norm
Stronger Trade Union Rights
Key changes include:
- Simplified trade union recognition processes
- Electronic and workplace balloting
- Reinforced rights of access for unions to engage with workers
- Repeal of several Conservative-era laws restricting industrial action
New Protections Against Harassment
The bill introduces a positive duty on employers to prevent sexual harassment, including from third parties such as customers, clients, or contractors. Employers must now take “all reasonable steps” to protect staff from harassment—failing to do so could trigger liability.
Creation of a Fair Work Agency
A new Fair Work Agency will be established to:
- Enforce employment standards
- Monitor compliance
- Handle complaints and inspections
- Act against systemic exploitation
Timeline for Implementation
The government has opted for a phased implementation schedule, intended to provide businesses with sufficient time to adapt and prepare. Below is a breakdown of when each reform is expected to come into force:
July 2025: Royal Assent + Initial Changes
- Bill receives Royal Assent (formal approval by the monarch)
- Immediate repeal of parts of the Trade Union Act 2016
- Initial changes to industrial action protections
April 2026: Phase One
- Day-One Paternity and Parental Leave Rights
- Whistleblower Protections expanded
- Fair Work Agency becomes operational
- SSP Reform – remove waiting period and earnings thresholds
- Simplified trade union recognition processes
- Legalisation of electronic balloting
October 2026: Phase Two
- Regulate Fire-and-Rehire practices
- Introduce the Fair Pay Agreement framework for Adult Social Care
- Tighten the tipping law to guarantee fair distribution
- Obligation to inform workers of their right to join a union
- Duty to prevent sexual harassment, including by third parties
- Two-tier procurement code to promote ethical contracts
- Legal safeguards for trade union reps
- Reforms to employment tribunal time limits
- Extension of protection against detriment for striking workers
2027: Final Phase
- Flexible Working becomes a statutory right from day one
- New Bereavement Leave entitlements
- Apply ZHC protections to agency workers
- Strengthened rights for pregnant workers
- Introduce gender pay gap and menopause action plans
- Regulate umbrella companies
- Reform collective redundancy consultation thresholds
- Clarify what counts as "reasonable steps" to prevent workplace harassment
- Blacklisting prohibitions and further industrial relations reforms
What This Means for Employers
The Employment Rights Bill represents one of the most substantial overhauls of UK employment law in decades. While many of its reforms are welcomed in principle, the practical demands on businesses—particularly small and medium-sized enterprises (SMEs)—should not be underestimated.
Here’s what employers need to be doing now:
1. Review Your Contracts and Policies
- Update sick pay policies to reflect the removal of the Lower Earnings Limit
- Revise disciplinary and dismissal procedures to account for day-one protections
- Incorporate sexual harassment prevention measures in workplace policies
- Assess whether zero-hours contracts in use will be compliant under the new rules
2. Prepare HR and Line Managers
- Deliver training on whistleblowing, trade union engagement, and harassment obligations
- Educate managers on upcoming parental leave entitlements
- Establish clearer documentation around probation periods
3. Audit Union Engagement Practices
- Determine whether your workforce is eligible for trade union recognition
- Prepare for potential changes in union access and collective bargaining obligations
- Begin consultations with staff and union reps where necessary
4. Plan for Payroll and Compliance Costs
- Budget for potential increases in SSP claims
- Anticipate administrative costs from new agency worker protections
- Consider legal guidance on collective redundancy thresholds and procurement obligations
5. Monitor Government Consultations
The government has promised stakeholder consultations beginning in Summer 2025. These consultations will influence:
- Definitions around “reasonable steps” for harassment prevention
- The mechanics of zero-hours contract regulation
- Implementation methods for umbrella company oversight
Stay informed by subscribing to legal briefings or working with trusted employment law advisors.
A Balanced Approach?
The government insists that the Employment Rights Bill strikes a fair balance between worker protections and business flexibility. But early reactions have been mixed.
Supporters Say:
- "These changes are long overdue and will bring the UK in line with international labour standards."
- "Ending exploitative practices like fire-and-rehire is a moral and economic necessity."
Critics Warn:
- "Compliance costs will be burdensome for SMEs."
- "The lack of clarity around probation rules and sick pay reform could create confusion."
For example, the British Chambers of Commerce has expressed concern that small businesses may not be able to keep pace with the administrative burden, while trade unions argue that delays to the 2027 reforms are unnecessary and politically motivated.
Final Thoughts: A New Era in Employment Law
The Employment Rights Bill marks a pivotal shift in UK employment law. By reshaping leave policies, worker protections, employer responsibilities, and industrial relations, it aims to create a more equitable and sustainable working environment for millions.
However, successful implementation will require careful planning, clear guidance, and close collaboration between government, businesses, and worker representatives. For employers, this is not just a policy change—it’s a strategic inflection point.
Need Help Navigating the Changes?
At Parachute Law, we help employers future-proof their workplace policies, stay compliant with new legislation, and manage risk. Whether you're updating contracts, preparing for union engagement, or adapting to SSP and dismissal reforms, our employment law experts are ready to guide you.
Call us on 0207 183 4547
Email us at thelegalteam@parachutelaw.co.uk
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