Navigating the Employment Rights Bill 2025: What Employers Need to Know

The Employment Rights Bill 2025 is set to bring the most significant transformation to UK employment law in decades. Introduced by the Labour government shortly after taking office, the Bill is currently progressing through Parliament, with Royal Assent expected later this year and implementation phased from 2026 to 2027. Employers across all sectors should begin preparing now for the wide-ranging changes that will affect recruitment, dismissal, workplace culture, and employee rights.

Day One Protection: A New Era for Unfair Dismissal

One of the most notable reforms is the introduction of Day One Protection for unfair dismissal. Currently, employees need two years of service to bring a claim. Under the new Bill, employees will be protected from the start of employment, subject to a statutory probationary period – likely to be nine months. Dismissals during this period must follow a simplified process and be based on valid reasons such as conduct, capability, or statutory restrictions. Redundancy dismissals remain excluded, and statutory redundancy pay will still require two years’ service. This change will require employers to rethink how they manage new hires, with greater emphasis on recruitment due diligence, onboarding, and early performance management.

Fire and Re-Hire Under Scrutiny

The Bill introduces new restrictions on the practice of ‘fire and re-hire.’ While not banned outright, it will become automatically unfair to dismiss an employee for refusing certain contract changes – particularly those affecting pay, pensions, or working hours – unless the employer can demonstrate financial necessity and that no reasonable alternatives were available. Employers will need to consult meaningfully with affected staff and follow the Statutory Code of Practice to avoid costly tribunal claims and reputational damage.

Collective Redundancy: A Wider Scope

Currently, collective consultation obligations apply when 20 or more redundancies are proposed at a single site. The Bill expands this to cover redundancies across multiple locations within the same business. The maximum protective award for non-compliance will double from 90 to 180 days’ gross pay. This change will require employers to take a more strategic view of workforce planning and ensure consultation procedures are consistent across all sites.

Tackling Harassment and NDA Reform

Employers will face a new duty to take all reasonable steps to prevent sexual harassment in the workplace – including harassment by third parties. Whistleblowing protections will apply to harassment complaints, and employers could face interim relief claims if they fail to act. The Bill also restricts the use of non-disclosure agreements (NDAs). Clauses that prevent workers from disclosing harassment or discrimination will be void, although NDAs may still be used to protect trade secrets and sensitive commercial information. Organisations will need to review their policies, training programmes, and reporting mechanisms to ensure they meet these new standards.

Supporting Employee Wellbeing

The Bill introduces several well-being focused measures. Employers with 250 or more staff will be required to publish annual Menopause Action Plans from 2027. Statutory Sick Pay (SSP) will become payable from day one of sickness, and the lower earnings threshold will be removed – meaning low earners will receive 80% of their weekly earnings. These changes will increase wage costs and require updates to sick pay policies and employment contracts.

Expanding Family Rights

Family-related protections are being strengthened. Paternity and unpaid parental leave will become day one rights from April 2026. Dismissal protections will extend during and after maternity, shared parental, and adoption leave. The Bill also introduces unpaid bereavement leave for broader relationships and early pregnancy loss. Employers should ensure their policies reflect these changes and that managers are trained to support staff sensitively and lawfully.

Flexible Working and the Right to Disconnect

Employees will continue to have the right to request flexible working from day one, but employers must now provide a written and reasonable explanation for any refusal. The government also plans to introduce a statutory Right to Disconnect, allowing employees to disengage from work outside contracted hours. These changes reflect a growing emphasis on work-life balance and will require employers to rethink how they manage flexible arrangements and employee wellbeing.

Regulating Zero-Hour Contracts

The Bill introduces new protections for workers on zero-hour contracts. Employers will be required to offer guaranteed hours to those regularly working more than their contracted hours. Workers will also gain the right to reasonable notice of shifts and compensation for cancellations. Businesses that rely on casual labour will need to review their scheduling practices and ensure contracts reflect actual working patterns.

Strengthening Trade Union Right

Trade union rights will be enhanced through simplified recognition processes, greater access for union representatives, and sector-wide bargaining — starting with social care. Employers should prepare for increased union activity and ensure consultation procedures are up to date.

Enforcement and Tribunal Changes

A new Fair Work Agency will be established to enforce employment law, covering areas such as holiday pay, minimum wage, and SSP. Tribunal time limits will increase from three to six months, giving employees more time to bring claims. Importantly, the government has confirmed that tribunal fees will not be introduced.

Take Action Now

The Employment Rights Bill 2025 will bring sweeping changes to how businesses manage their workforce. While many measures won’t take effect until 2026 or 2027, early preparation is essential. Employers should begin reviewing contracts, updating policies, and training managers to ensure compliance and reduce risk.

At Machins LLP, our employment law team is ready to help you navigate these reforms. Whether you need strategic advice, policy reviews, or support with training and implementation, we offer practical, tailored solutions to protect your business.  To get in touch please click here