Employment Rights Bill – What You Need To Know

Unfair dismissal

Currently, employees are required to have more than two years’ continuous service (less one day) to be eligible to present an ordinary unfair dismissal claim. Unfair dismissal refers to a scenario where an employee is dismissed for an unfair reason and/or because the decision or decision-making process was in some way, unfair.

This is unless the dismissal is deemed “automatically unfair”. For example, if the dismissal was because of pregnancy, or as a result of asserting a statutory right – in which case, a claim for automatically unfair dismissal can be brought irrespective of length of employment.

The Bill proposes to allow employees to bring a claim for unfair dismissal from the first day of their employment. However, it is widely expected that accompanying regulations would introduce an “initial period” of 9 months (similar to a probation period) – where during this period a dismissal can be made without much difficulty. In the 3 months following the initial period (from 9-12 months’ employment; however, if the initial period is passed as 6 months, then this would be 6-9 months’ employment), employers are expected to be able to dismiss an employee through a quicker process – this is yet to be clarified, but employers may expect requirements:

• to hold a meeting, where the employee is accompanied by a companion;
• for the employee to be informed of the dismissal reason in writing; and
• for the employee to be eligible for compensation under a special compensation regime – available to employees dismissed during the 9-12-month period.

The day one right begins from the first day of the employee performing their role. The day one right would not commence from the first day they apply/interview (though other protections under the Equality Act 2010 would still apply) or from when they sign their contract of employment. Additionally, if a contract of employment had set a start date and the employee was unable to begin on that date, the day one right would not begin from that date.

At the moment, this section of the Bill remains a point of contention between the House of Commons and the House of Lords. On 28 October 2025, the House of Lords insisted for the second time on the inclusion of a qualifying period of 6 months before an employee can claim unfair dismissal. On 7 November 2025, the House of Commons has passed the Bill over to the House of Lords, again restating their own version to be agreed by them. The House of lords will consider whether to give way or not soon.

If the Bill can be agreed by both Houses, the Bill can then receive Royal Assent. Usually, where there has been a stalemate between the two Houses, it is the House of Commons that prevails.

Whether the “day one right” will be presented with a 9-month initial period or a 6-month qualifying period remains to be seen. In any event, the Roadmap highlights this change coming into effect in 2027.

Parental leave

Parental leave is unpaid leave that is available to employees who have responsibility of a child – this can be used for anything that relates to the child’s welfare or simply to spend time with them. Employees may take 18 weeks’ unpaid leave per child, which can be taken at a rate of up to 4 weeks each year.

The 18 weeks’ entitlement does not reset with each employer – meaning, if an employee has taken 4 weeks with a previous employer, then they would only be eligible for 14 weeks from their employer for the relevant child.

Currently, employees must have more than 1 year’s service to be able to take parental leave – though employers are welcome to offer paid leave or the basic unpaid right to those with less than 1 year’s service.

The Bill proposes to make parental leave a day one right from April 2026

Paternity leave

Currently, fathers or the mother’s spouse/civil partner have the right to take 2 weeks’ statutory paternity leave if they have been employed for at least 26 weeks by the end of the 15^th week before the effective week of childbirth.

The Bill proposes to make paternity leave a day one right from April 2026.

Furthermore, if shared parental leave (e.g. if a mother has returned to work before the end of her maternity leave, then the father/partner may use the remaining maternity leave to care for the child) had been taken by a father/spouse before using their paternity leave, then the paternity leave would be lost.

The Bill proposes to allow fathers/spouses to be able to take paternity leave and pay even if they have used shared parental leave and pay beforehand.

The Roadmap does not indicate when this change is due to take effect, but given the dates for changes to the other family rights, we expect this to be April 2026, too. 

Maternity protection

From 6 April 2024, pregnant employees or those returning from maternity, adoption or shared parental leave were given priority for internal job opportunities in redundancy situations. The employee would be protected for a period of 18 months from the child’s date of birth if the employer had been notified before the end of maternity leave. If not, then the 18 months would begin from the expected week of childbirth.

Once the Bill takes effect, the Government will have the power to widen the protection currently available to employees returning from maternity, adoption, shared parental, neonatal and bereaved partners’ leave.

Within the explanatory notes of the Bill, it is made clear that the dismissal of mothers returning from maternity leave would be prohibited within 6 months of their return – these are to be clarified in accompanying regulations. Consultations are ongoing to determine the length of this protection and whether there should be exceptions.

Bereavement leave

Currently, bereavement or compassionate leave are not legal rights. However, dependents’ (partner, child, parent, or person living in the same household) leave is day one right for employees, which allows unpaid leave to be taken for a reasonable period of time for the following reasons:

• to provide assistance if a dependent falls ill, gives birth or is injured or assaulted;
• to make arrangements for the provision of care for a dependent, who is ill or injured;
• on the death of a dependent; and
• to deal with emergencies involving children.

Dependents’ leave is often confused with bereavement/compassionate leave.

The Bill would allow the Government to offer employees, through regulations, at least one week of unpaid leave specifically for bereavement. Additionally, this leave would extend to pregnancy loss which occurs prior to 24 weeks of the expected date of childbirth.

 

Statutory sick pay

Statutory Sick Pay (SSP) is designed to support employees and workers while they are absent from work due to illness. SSP is currently paid at a weekly rate of £118.75, which begins following the first 3 unpaid days of sickness absence (aka the waiting days). Employees and workers are required to earn more than the lower earnings limit, which is currently £125.00 per week.

Once the Bill comes into effect, SSP would become payable from the first day of sickness and there would be no minimum earnings requirement to be eligible. This change is expected to take effect in April 2026.

The proposal will require employers with 250 employees or more to create and publish an equality action plan. The plan need to show what steps the employer is taking to advance the equality of opportunity between male and female employees, addressing the gender pay gap, and the measures employers are taking to support employees going through the menopause. The plan would not need to be published more than once every 12 months.

Although there has been a requirement for relevant organisations to publish their gender pay gap since 2017, the new obligations will mean that employers will need to address the reasons for gap or put a plan in place to reduce it.

Current law

At current, there is very little protection for workers on zero and low hours’ contracts. In May 2015, the law changed to ban exclusivity clauses in zero and low hours’ contracts. However, this did not fully address the one-sided flexibility and lack of financial security that zero hours’ contracts result in.

Prior to the Bill, The Good Work Plan stated there would be the introduction of the right for all workers to request a more predictable and stable contract after 26 weeks’ service. While this received Royal Assent in September 2023, it was never enacted. The Bill is set to repeal this.

Changes by the Bill

The Government’s Plan to Make Work Pay intended for the Bill to “ban exploitive zero-hours contracts” and “end one-sided flexibility”. The Bill, as currently drafted, does not impose an outright ban, but it does introduce a number of rights for zero and low hours workers, including some agency workers.

Right to guaranteed hours

Set out as a ‘right to guaranteed hours’, the Bill intends to introduce changes which would ensure workers have a contract which reflects the number of hours they regularly work, thereby removing the one-sided and potentially abusive nature of zero and low hours’ contracts in the long-term. This will only be available to “qualifying workers” and will be assessed within a defined “reference period”. The definition of qualifying worker will include:

• Those on a zero hours’ contract
• Those contracting on a zero hours’ arrangement
• Those on a low hours’ contract where the hours worked in the reference period exceeds the contractually guaranteed hours. When their hours exceed the low hours threshold (yet to be determined) they will no longer be a ‘qualifying worker’.

The regulations will determine much of the detail, such as who will be considered an ‘excluded worker’; the low hours threshold; how to calculate and reflect the hours in a reference period; and key details on a worker’s acceptance or rejection of an offer of guaranteed hours.

When making a guaranteed hours offer, this must be on terms no less favourable than during the reference period. Interestingly, the Bill has been amended so that agency workers will be offered a rate which reflects directly employed comparators. It is not clear how the Bill will address the potential issue that zero/low hours workers on a premium pay rate, due to the flexibility, may end up working the same or more hours than existing employees.

The Government’s preferred “reference period” length is 12 weeks, though, this will be confirmed in subsequent regulations.

In addition to anti-avoidance measures, the Bill also addresses the use of fixed term contracts (‘FTCs’), ensuring that FTCs cannot be used to circumvent the right to guaranteed hours. The use of an FTC will need be considered “reasonable”. Examples of where an FTC would be considered “reasonable” include: for a specific project or a temporary need – the regulations will define this further. An FTC will not be presumed “reasonable” where there is another worker carrying out the same work on a different contract during the reference period; as this is a presumption it will be rebuttable. 

Certain exceptions to this right will apply, such as where:

• The worker resigns
• The worker is fairly dismissed
• The fixed term contract has terminated

When relying on an exception, notice will need to be provided to the worker. The list of exceptions may be added to in future regulations.

Rights relating to shift-work

The Bill will also introduce changes that will oblige employers to notify and/or compensate worker’s where there is a changed, cancelled, or curtailed shift. These rights will also be extended to agency workers, following a consultation outcome on 4 March 2025. These rights will apply to low hours / low paid workers with no contractually agreed hours or shift patterns, or those low hours / low paid workers who are offered shifts outside of what is contractually agreed.

“Reasonable notice” will be further defined in regulations following a consultation. Regulation will also define “short notice” whereby compensation for a changed shift will need to be paid, as well as the “specified circumstances” where compensation would not need to be paid.

Contracting out

It will be possible, by way of a collective agreement, for workers and the organisation to contract out of the rights and duties. For agency workers, the collective agreement will need to be between a union and the organisation.

Consultations

A consultation for the application of zero-hours contracts measures to agency workers took place in Autumn 2024 and closed on 2 December 2024. The consultation sought to address the potential loophole for employers, whereby they could bypass the zero-hours measures by instead engaging workers through agencies. As a result of the consultation, the Government concluded that agency workers would also be covered by the zero hours measures being introduced by the Bill.

To review the Government’s response to this consultation, you can do so on the Government’s website: Consultation on the application of zero-hours contracts measures to agency workers (web accessible version) – GOV.UK

Implications of the changes

Given that the right to guaranteed hours represents a positive duty on employers to monitor reference periods and act accordingly, this will lead to a significant administrative burden on employers. Further concern for employer’s, which should be clarified through regulation, is where seasonal demand can lead to inflated hours in a reference period. The rules around the use of FTCs could see ‘seasonal demand’ being a “reasonable” use of an FTC, however, this is not clear. If this is not clarified in future regulations, it could lead to potential claims in the future.

The rights relating to shift-work, may lead to difficulties in day-to-day management of shifts, such as where employees organise shift swaps between themselves at “short notice”, it is not certain where the organisation’s duty to compensate is then invoked. Though, the compensation will be subject to statutory caps.

The Bill brings these rights into the scope of automatically unfair dismissal and unlawful detriment. Employer’s will need to effectively plan in the lead up to these rights coming into force to ensure that the administrative burden is absorbed and operating correctly. It would also be prudent to assess the current ways of working in terms of seasonal demand and FTCs to highlight key areas of risk once these rights come into effect.

Current law

The law currently allows for companies to fire an employee and then rehire them on different contractual terms and conditions where there is a sound business reason. Examples of sound business reasons include: economic considerations; working practices changes; and harmonisation of contractual terms, typically in circumstances of company consolidation post-merger or -acquisition or in restructuring.

Changes by the Bill

The Bill intends to reimagine this practice in a way that balances a protection for employees from bullying practices but does not put undue pressure on employers in their restructuring processes to remain viable. The intention of the Bill is to encourage good faith negotiations, and not penalise employers who have no choice but to make changes to the terms and conditions of employment due to financial risks to the organisation’s viability.

The way the Bill intends to achieve this aim is by making amendments to the law on unfair dismissal. The Bill will treat an employee’s dismissal as automatically unfair where it is because the employee did not agree to a change in their contract of employment, or where the employer dismisses the employee in an attempt to replace or re-engage them on varied terms and conditions. This will only apply to restricted variations, not all variations. The restricted variations include: pay, pensions, working hours, shift patterns, or time off. For a dismissal in these circumstances to be assessed as ‘fair’, an employer would need to show:

• Evidence of financial difficulties; impacting on future viability of the organisation;
• The changes (i.e. dismissal(s)) were to eliminate, prevent, significantly reduce, or significantly mitigate the financial risks to viability; and
• They had no other choice but to amend contractual terms of employment; it was unavoidable.

These changes are scheduled for implementation on 1 October 2026.

Consultations

A consultation for the proposed changes to ‘fire and rehire’ practices took place at the end of 2024 and closed on 2 December 2024. The consultation also considered whether employees in a ‘fire and rehire’ scenario claiming unfair dismissal should also have the right to apply for interim relief. An interim relief order either orders the employer to re-employ the employee until the full hearing or continue paying them their full salary until the full hearing. The Government’s response to the consultation held that interim relief for employees subject to ‘fire and rehire’ would not be effective.

To review the Government’s response to the consultation, you can do so on the Government’s website: Government Response to the consultation on strengthening remedies against abuse of rules on collective redundancy and fire and rehire

As part of their response, the Government outlined that they intend to gather further view on updating the Code of Practice on Dismissal and Re-engagement in light of the Bill.

Implications of the changes

The Bill’s changes to ‘fire and rehire’ will tighten the use cases of ‘fire and rehire’ practices; effectively limiting this only to organisations on the brink of insolvency. The Bill will not allow leeway for organisations seeking to make changes for organisational or technical reasons.

Employers should begin reviewing current contractual terms, ensuring variation is allowed to take account of changes brought in by the Bill, and to assess the current flexibility of employment terms. Making changes to variation clauses now, will assist employers to have future flexibility when reacting to business and economic changes.

Current law

The Trade Union Act 2016 outlines the current position in relation to unionisation and industrial action.

Changes by the Bill

The Bill intends to return legislation on trade unions to the position before the Trade Union Act 2016 was introduced. This is with the following three exceptions:

1. Retaining the ballot mandate expiration date. Though, the Bill is intending to increase this from 6 months to 12 months.
2. The notice period for industrial action will remain. The current notice period is 14 days; however, the Bill will decrease this to 10 days’ notice. The information contained in a notice will be reduced.
3. The Certification Officer will remain independent of political control.

Aside from the exceptions outlined above, this will effectively remove all restrictions placed on industrial action and picketing. For employees, the Bill is set to introduce protection against detriment for taking part in industrial action. This will also include strengthened rules on automatically unfair dismissal for taking part in industrial action – there will no longer only be a 12-week protective period. This enhanced protection is expected to take effect from October 2026. In addition, there will be changes to the right to paid time off as a trade union official; where this is breached, the burden of proof will be on the employer to prove the request was unreasonable. The Bill is also intended to repeal the minimum service levels for strike action; this repeal is set to take effect on the day the Bill receives Royal Assent.

In terms of what the Bill is set to introduce for trade unions, this includes a duty on employers to provide trade unions with a right of access, and the rules of trade union recognition will be simplified. The right of access will include physical access and the right to communicate with workers. The Government is considering excluding employers with fewer than 21 workers from this right. The purpose of the access is defined to allow union officials to meet, support, represent, recruit, or organise workers or to facilitate collective bargaining (i.e. not for organising industrial action). Implementation of this right is expected in October 2026. This right will include the introduction of a new Code of Practice on Trade Union Right of Access, encouraging the use of standard templates as part of the request process. This right is currently subject to an open consultation – details of which can be found below.

For other changes and repeals, the Government will be implementing them through regulations, expected to take effect in 2026 and 2027.

Consultations

On 23 October 2025 the Government opened a consultation on the trade union rights of access. The consultation envisages certain timescales for reviewing and responding to requests for access: e.g. 5 working days for the employer to respond to the request for access, and 15 days to negotiate the terms for the agreement. In cases of non-compliance, the consultation has outlined a maximum £75,000 fine, and maximum £150,000 fine in cases of repeated breaches. To review and/or contribute to this consultation you can do so via the Government website: Make Work Pay: trade union right of access – GOV.UK. Consultation submissions close on 18^th December 2025 at 11:59pm.

Implications of the changes

The changes will reduce the risks to trade unions when organising strikes e.g. less responsibility on the pickets and simplifying ballot and notification rules – the Government’s intention is to narrow the scope of circumstances where an employer can challenge action in litigation. In light of this, it will be key for employer’s to effectively plan their policies on, or relating to, industrial action, accounting for these changes.

Currently, most tribunal claims must be filed within three months of the incident in question.

The government proposes to extend the time limit for all types of tribunal claims, to six months, except for breach of contract claims arising or outstanding on termination of employment.

As of 6 April 2025, the limits on tribunal awards changed. These limits are reviewed on an annual basis. The current limit on a week’s pay increased from £700 to £719. The maximum compensatory award for unfair dismissal increased from £115,115 to £118,223.

 The current law states for the requirement to ‘collectively consult’ in redundancy scenarios to be triggered, the employer must propose to make redundant 20 or more employees at one establishment within 90 days (or less).

Under the new law, the requirement to ‘collectively consult’ in redundancies would be triggered when an employer is proposing to make redundant within 90 days (or less) either:

• 20 or more employees at one establishment (as above); or
• At least the “threshold number of employees”.

It has been suggested that the “threshold number” may be a specified number or a percentage of the workforce, but it must not be lower than 20.

The bill originally included the removal of “at one establishment” but this caused a multitude of concerns for employers and could have resulted in unintended consequences. Therefore, the government abandoned its proposal to remove this from the bill.

• Review your pay rates and ensure they are not falling foul of the law. This includes sick pay and when this becomes payable.
• Review your key policies/ procedures, including:
  • Redundancy (if you currently have one)
  • Flexible working
  • Types of Leave, including bereavement, maternity and neonatal.

• Read up on the Trade Union reforms – further details will be released later this year.
• Start reviewing and tightening up your current probation periods, as well as offering managers training on how to effectively manage and record performance of staff during their probation.
• If possible, redundancies may transpire in the future, ensure you are familiar of the collective consultation obligations and are familiar of the process to follow.
• Review your key policies/ procedures, including:
  • Redundancy (if you currently have one)
  • Flexible working
  • Types of Leave, including bereavement, maternity and neonatal.