The Employment Rights Bill – implications for employers

Remember when hiring someone was just a handshake and a hope? Well, 2025 has brought a new era – and the Employment Rights Bill (ERB) is leading the charge.

It’s the biggest overhaul of UK employment law in a generation, and if you think HR rules are background noise, it’s time to tune in. This isn’t a tweak – it’s a full-blown HR reboot.

With over 30 measures packed into nearly 300 pages, the ERB brings stronger worker protections, tighter rules for employers, and more power to regulators. Most changes won’t kick in until 2026 – but smart employers should start preparing now.

Key changes employers need to know

Unfair dismissal rights from day one

The current two-year period before employees could claim unfair dismissal? Gone. Under the ERB, workers will get this right from day one. There’s a new, intended nine-month “Initial Employment Period” where a lighter touch dismissal process may apply, but what that will look like remains to be seen and any dismissal during that period will still require proper documentation and management.

Fire and rehire clampdown

Using “fire and rehire” tactics to force through contractual changes? That will be automatically unfair under the ERB – unless your business is in serious financial trouble, and even then, you’ll need to follow strict rules.

Zero-hours reform

Once implemented, the ERB will mean that zero and low-hours workers must be offered guaranteed hours contracts – based on their usual hours. Cancel a shift at the last minute? You’ll owe compensation. This will likely cover agency staff too – time to update those rosters.

Flexible working

Flexible working became a day one right in 2024, but the ERB takes it further. Employers will need to consult with staff, respond to any requests reasonably, and give clear reasons for any refusal. Time to upskill your managers on how to handle remote and flexible requests with empathy and compliance.

Stronger protection from harassment

The ERB will extend the legal duty to prevent sexual harassment at work – including by third parties – by requiring employers to take all reasonable steps to prevent sexual harassment. In addition, reports of sexual harassment will count as protected disclosures under whistleblowing laws. Your policies (and culture) need to be airtight.

Extended time to claim

The window to bring tribunal claims for unfair dismissal or discrimination will increase from three to six months. Unlike many of the changes, this one might be in force as early as summer 2025. More time for employees means more exposure for employers.

Meet the Fair Work Agency

This new watchdog will have real power. It will be able toenter premises, inspect documents, and issues fines up to £20k per underpaid employee. It can even bring tribunal claims on behalf of staff. The bottom line is,  don’t cut corners on pay or rights on the assumption that an employee might not bring a claim. In the case of certain employment rights, like minimum wage and holiday pay, it won’t just be up to the employee to do something about it.

Other key updates

• Day one rights for paternity, parental, and bereavement leave
• Statutory Sick Pay from day one, no earnings threshold
• Stronger protections for pregnant workers
• Greater union rights and reporting duties on equality.

What employers should do now

1. Review hiring and onboarding processes
2. Tighten probation reviews
3. Train managers – especially around flexible work, managing probationary periods and handling dismissals
4. Audit and update key policies (harassment, sick pay, leave, contracts)
5. Stay informed – change is coming fast.