The UK government is bringing in sweeping changes to employment law that will directly impact the way businesses operate. As a business owner, you have the opportunity to take proactive steps to prepare for these changes in advance, as they will have a big effect on how businesses operate. While these changes may seem challenging, it's important to embrace them as part of modernising your workplace.
The Employment Rights Bill introduces a range of reforms aimed at boosting employee protections, enhancing productivity, and making workplaces more adaptable to the needs of both employers and employees.
Whilst many of these changes will only be implemented in 2026, preparing now can ensure your business remains compliant, resilient, and a positive environment for both current and future employees.
Statutory sick pay will now be payable from day 1 of sickness, removing the current three-day waiting period. The lower earnings limit (LEL) will also be removed, allowing more employees to qualify for SSP. This change aims to support employees who need to take time off for health reasons without financial penalty, especially benefiting low earners. This change aims to support employees who need to take time off for health reasons without financial penalty, especially benefiting low earners.
Employees will gain the right to claim unfair dismissal from day one of employment, rather than needing two years of continuous service as is currently the case. This will include a statutory probationary period with a 'lighter-touch' dismissal process for employers. However, a fair reason for dismissal will still be needed. The government has also proposed a 9-month probationary period, allowing for simplified termination without the full legal process, giving employers a window to properly assess new hires.
Flexible working requests will become a right from day one of employment. While there is still no absolute right to flexible working, employers must show both a valid ground for rejection and that the rejection is reasonable. This builds on the increased flexibility seen post-pandemic and aims to create a more balanced and adaptable workplace culture.
Workers with regular hours over a 12-week period will be able to request a guaranteed contract. There will also be a right to 'reasonable' notice of shift changes or cancellations, and a right to compensation for last-minute changes. The government will consult on what constitutes 'low hours,' how these review periods should work, and how the rules will apply to agency workers.
Employees returning from family leave will be protected from dismissal for six months after their return. There will also be day-one rights to unpaid parental leave, two weeks' paternity leave, and one week of parental bereavement leave. The government is consulting on broader changes, such as extending statutory maternity pay from day one rather than after six months.
The Equality Act 2010 will be updated to include explicit protections against third-party harassment. Additionally, large employers (with 250+ employees) will be required to develop annual action plans to address gender pay gaps and provide support for employees experiencing menopause.
The government is consulting on a code of practice that would establish an employee's right to disconnect, meaning they should not be contacted outside of working hours unless in exceptional circumstances. This is intended to support work-life balance and employee well-being by clearly defining boundaries between work and personal time. The government also intends to consult on how these rules can be tailored to fit different sectors, acknowledging unique operational needs.
The practice of 'fire and rehire' will be heavily restricted. Employers must demonstrate that the business's viability is at risk and consult staff while considering all reasonable alternatives before proceeding.
Enhancements to trade union access will make industrial action easier. Employers will be prevented from replacing striking workers with agency staff, increasing union influence.
The government has published a Next Steps paper outlining longer-term reforms:
Plans to review and extend these provisions.
Considering moving dependent contractors to full employment status, leaving only the genuinely self-employed without worker rights to benefits.
A call for evidence to holistically examine the Transfer of Undertakings (Protection of Employment) regulations, which may lead to simplification.
Enabling employees to collectively raise grievances about conduct in the workplace.
The Employment Rights Bill, introduced on 10 October, marks a major upgrade in UK employment law, aimed at addressing outdated regulations that have hindered economic growth and worker protections. The reforms are designed to tackle poor working conditions, support fair treatment of employees, and create a labour market that benefits both businesses and workers alike. The government is seeking to balance flexibility with security, giving workers more rights while ensuring businesses have the freedom to grow.
The introduction of these reforms comes in response to issues such as exploitative zero-hour contracts, unfair dismissal practices, and the need for greater support for workers with family responsibilities. By modernising these laws, the government aims to create an environment where workers feel secure and valued, ultimately boosting productivity and reducing staff turnover.
Conduct a thorough audit of your existing employment contracts, policies, and procedures to ensure they align with the upcoming changes. It might be valuable to consult with an employment lawyer to make necessary amendments to stay compliant.
Train your managers on the new employment rights, including day-one unfair dismissal, flexible working requests, and harassment protections. Effective management is crucial in adapting to these changes smoothly.
Keep your employees informed about the upcoming changes and how they may impact their rights and responsibilities. Open communication will help foster trust and ensure everyone is on the same page.
Review your current flexible working policy and prepare to accommodate increased requests from day one of employment. Assess the impact on your operations and determine how flexibility can be effectively managed.
Embrace the changes positively and consider adopting policies like the right to disconnect, as well as enhancing employee support initiatives such as mental health resources and family leave protections. Creating a supportive culture will help ensure compliance, improve employee morale, and foster a productive work environment.