The Employment Rights Bill: what you need to know
If you work in HR or run a business, you’ve almost certainly heard talk of the Employment Rights Bill (ERB).
It’s been described as the most significant shake-up of employment law in a generation, and with good reason. The Bill introduces sweeping changes that will reshape day-to-day people management, from how quickly employees gain rights to how flexible work is structured across the UK.
So, what’s actually changing and what should HR teams be preparing for?
Government U-turns on day one unfair dismissal rights
The government has U-turned on its plan (and manifesto commitment) to introduce day-one protections from unfair dismissal for workers, replacing it with a six-month qualifying period.
What’s changed?
- Original plan: Unfair dismissal rights from day one of employment.
- New plan: Workers will get this right only after six months.
- Current law: Employees need two years’ service before claiming unfair dismissal.
Other day-one rights still happening:
- Statutory Sick Pay from day one
- Paternity leave from day one
- Unpaid parental leave rights from day one
These will begin in April 2026.
Why the U-turn?
- Some ministers and business groups warned that day-one unfair dismissal rights might discourage hiring, especially for small businesses.
- The government said the change was necessary to stop the wider employment bill from being blocked or delayed in the House of Lords, where opposition was strong.
What this means in practice
- Workers will still gain unfair dismissal rights much sooner than under current law (6 months instead of 2 years).
- Businesses still need to prepare and adapt their processes to comply.
- As it stands, the Employment Rights Bill remains on track, with major reforms still scheduled.
Zero-hours contracts redesigned
Zero-hours contracts have been debated for years, and the ERB brings that conversation to a turning point. Workers will be entitled to guaranteed minimum hours, proper notice of shifts and compensation where work is cancelled at short notice. Agency workers will benefit from these changes too.
This shift doesn’t spell the end of flexibility, but it will change how employers organise staffing, schedule work and budget for labour. Businesses that rely heavily on variable hours may need to rethink how they balance workforce planning with the new protections.
Fire-and-rehire restrictions
The controversial practice of dismissing staff and rehiring them on less favourable terms is being heavily curtailed. Under the ERB, fire-and-rehire will be treated as automatically unfair except in very limited circumstances, such as genuine organisational emergencies where all other avenues have been exhausted.
For employers, this means greater emphasis on consultation and negotiation – and far less scope for imposing contractual changes unilaterally.
Stronger union rights and expanded redundancy rules
The Bill also strengthens trade union rights in several areas. The process for strike ballots will be simpler, minimum service levels during strikes will be withdrawn, and workers taking part in industrial action will receive stronger protections.
Redundancy rules will become more expansive too. Collective consultation will no longer be limited to one location: it will apply across sites, meaning multi-site employers will need to take a more joined-up approach when planning restructures.
Family-friendly changes and improvements to fair pay
Several reforms focus squarely on wellbeing and fairness. Statutory Sick Pay (SSP) will be overhauled – removing waiting days and the lower earnings limit – making it available to more workers and from the first day of illness.
Bereavement leave will also be extended to include pregnancy loss before 24 weeks, recognising a gap that many campaigners have been pushing to address.
Meanwhile, the introduction of a new Fair Work Agency and sector-wide pay agreements, beginning with the social care sector, aims to raise minimum standards and promote greater fairness across industries.
When will the changes take effect?
The Bill is expected to receive Royal Assent in autumn 2025. Some reforms, particularly those relating to unions, are likely to take effect quickly. Others will be phased in from April 2026, with further implementation stretching into 2027. In practice, this gives HR teams time to prepare – though not a huge amount.
What does this mean for HR?
There’s no hiding that many of the reforms will come with added administration and increased costs. According to CIPD research, nearly four in five employers expect their HR function to feel the impact.
But the Bill is also an opportunity to strengthen relationships with employees and build more resilient, transparent workplaces. HR teams can get ahead by reviewing contracts, revisiting policies and ensuring managers understand the upcoming changes. Staying alert to consultations and secondary legislation will be essential, as many details will be fleshed out in the months ahead.
