The Employment Rights Bill - everything employers need to know

The Employment Rights Bill is a new piece of UK legislation which aims to bring employment law in the UK in-line with the ambitions set out in Labour’s “Plan to Make Work Pay”. The Bill is set to be an important and incredibly impactful piece of legislation that will shake up many aspects of employment law.

As of July 2025, the Labour government have released their ‘Roadmap for delivering change’. This outlines the specific dates and plans for when various measures of the Employment Rights Bill will come into effect.

If you’re clued up in HR and employment law, you'll no doubt have heard about the proposed changes and the potential impact they can bring. For employers across the country, there’s no better time than now the present to get your head around this monumental Bill.

What is covered by the Employment Rights Bill?

The Employment Rights Bill covers a wide range of topics. Meaning once the changes begin to roll out, employers will have a responsibility to adjust accordingly to the new rules.

Including changes to Paternity Leave and Parental Leave to Statutory Sick Pay and Sexual Harassment Policies. It’s clear that this Bill, no matter the size or industry of your business, will impact you in some way. It’s for that reason that it’s essential to keep on the pulse of the latest news and stay ahead of what’s to come.

Some key changes include:

Types of family leave

Labour intends to remove the requirement for a length of service for Paternity Leave and Unpaid Parental Leave to apply to an employee. Making this type of leave more inclusive for all. These changes will come into effect from April 2026.

In addition, Labour have set aside an extension of the rights and protections for pregnant workers, which will come into effect in 2027.

Leave and absence is a key element of people management, so ensuring your policies reflect the changes and documentation is up to scratch, you should find yourself in line with new laws and regulations.

Statutory Sick Pay

While amendments to SSP have already been introduced in 2025, further amendments are expected to roll out in April 2026.

The Employment Rights Bill will remove the Lower Earnings Limit (LEL) and waiting period requirements for SSP. Meaning employees will no longer have to wait beyond their first day of sickness absence to receive SSP, (prior to changes this was a three-day waiting period).

These changes will first require employers to review their absence and sickness policies but also to consider the extra cost they will incur as a result.

Fire and Rehire

From October 2026 onwards the use of fire and rehire practices will be limited to very specific circumstances. Making it difficult for businesses to tactically adjust employment contract terms to potentially favour the organisation rather than the employee.

This change sets out to protect employees, ensuring that employers are acting in a fair and reasonable way when seeking to amend contracts and dismiss employees.

Flexible working requests

From 2027, all employers must consider an employee’s flexible working request, providing a reasonable explanation if it is refused.

Unfair dismissal

Perhaps one of the biggest changes to come out of the bill. From 2027 onwards there will be no length of service requirement for ordinary unfair dismissal claims. Though, Labour intends to introduce a statutory probation period after a consultation with businesses, making it easier to dismiss workers within it, but harder once the period concludes.

Changes to payment of tips to workers

For the hospitality industry in particular, changes to how tips will be paid will be an important update.

As of October 2026, law surrounding the payment of tips, gratuities, and service charges to workers, who are eligible, will tighten. With the intention of formalising the process across workplaces.

To prepare ahead of these changes, employers should review their current tipping policies. Or write one if not already in their business.

Establishment of a Fair Work Agency body

The Fair Work Agency will oversee the enforcement of employment rights throughout the UK. Allowing a single agency body to take responsibility for this task, removing the requirement from various bodies and organisations such as HMRC and GLAA.

With the roadmap predicting a date of April 2026, it won’t be long before your business will be under the watchful eye of the new Fair Work Agency. More details of which can be found in our dedicated article detailing exactly what the FWA will set out to do and how.

Other changes to the law include:

• Repeal of the majority of the Trade Union Act 2016, (at Royal Assent or shortly afterwards)

• Introduction of dismissal protections for taking industrial action, (at Royal Assent or shortly afterwards)

• Additional whistleblowing protections regarding sexual harassment (April 2026)

• Workers will be required to be informed of their right to join a trade union (October 2026)

• Tighter regulation of umbrella companies (2027)

• Mandatory gender pay gap and menopause action plans (2027)

• Requirement to offer zero-hour, low hour and agency workers a guaranteed hours contract reflecting their usual working hours (2027)

Failure to comply

As with any employment law in the UK, failure to comply leads to consequences. And as so many changes will come into effect over a relatively short time period, the consequences of failing to comply with any or all the new measures outlined within the Employment Rights Bill could have serious financial, reputational, and legal impacts for your business.

Further updates - July 2025

Bereavement Leave for pregnancy loss

An update to the Employment Rights Bill will extend the right to unpaid Bereavement Leave to cover pre-24-week pregnancy losses.  

‘Fire and Re-hire’ restrictions within the Bill

The plans to introduce fire and rehire restrictions will now only apply to certain restricted variations. Such as pay or any other monetary entitlements like bonuses, shift timings and annual leave allowances. This suggests that the Bill will allow for changes to made regarding topics such as work location. However, as always, further updates to the Bill should be anticipated ahead of its implementation.

Use of NDAs in harassment and discrimination circumstances

NDAs used by businesses or clauses written into contracts used to silence workers from making allegations of sexual harassment or discrimination will be deemed void by the government under new law.

Replacing employees with agency workers or other non-employees

Unfair dismissal will apply to workers who have been replaced by an individual such as an agency worker or contractor who is carrying out the same work duties and activities.

What employers need to do now

Employers are required to prepare ahead of the implementation of this major shake-up. Getting ahead of the law before falling behind. It can be easy to let HR and legislation changes pass you by, but for the sake of compliance it is's essential that you're prepared and remain proactive.

Having water-tight HR policies, documents, and procedures in place, ready for these updates will guarantee that your business stays on the right side of the law.

For some handy tips, see our blog featuring expert guidance on what you can do to get ahead.

BrightAdvice employment law experts are only a call away. Available 24/7 to provide you with the advice you need to guarantee HR compliance for your business.

If you’re worried about these changes to UK employment law or would like support in updating your processes, our team can help you. Get in touch or book a free demo today.