Key Changes for Employers, Employment Rights Bill 2025

The Employment Rights Bill 2025 is set to bring significant changes to UK employment law. Understanding these changes is crucial for employers to stay compliant and support their workforce.

What is the Employment Rights Bill 2025?

The Employment Rights Bill 2025 aims to modernise UK employment law. It focuses on strengthening workers’ rights, improving job security, and supporting business productivity. Introduced in October 2024, the Bill is part of the government’s plan to address insecure working conditions and ensure fair treatment for all employees.

Key Reforms and New Employment Rights

Zero Hours and Flexible Work

The Bill addresses the uncertainty of zero-hours contracts by introducing several new rights. Workers on irregular contracts will now have the right to guaranteed hours. Employers must provide advance notice for shift schedules, and there will be compensation for last-minute shift cancellations. These rights also apply to agency workers, ensuring more stability and predictability.

Unfair Dismissal and Fire and Rehire

Unfair dismissal will become a day-one right. Previously, workers needed two years of service to claim unfair dismissal, but this is changing. The Bill also targets the practice of fire and rehire. Dismissing employees for not accepting worse contract terms will be considered automatically unfair in most cases.

Parental Leave, Paternity, and Bereavement Rights

Employees will no longer need a minimum length of service to qualify for paternity leave and unpaid parental leave. A new right to unpaid bereavement leave will be introduced. Paternity leave can be taken after shared parental leave, offering more flexibility for new parents.

Workplace Protections and Harassment

Employers will be legally required to take all reasonable steps to prevent sexual harassment, including from customers or other third parties. There will be stronger protections against discrimination for pregnant workers or new parents. Retaliation against whistleblowers who report wrongdoing will also be prohibited.

Trade Union Rights and Recognition

The Bill makes it easier for trade unions to gain recognition and access workplaces. It lowers the thresholds for union recognition and repeals laws requiring minimum service levels during industrial action.

Agency and Umbrella Workers

For the first time, umbrella companies will face direct regulation. The Bill provides more protection to agency workers, including regulation of umbrella companies to stop misuse and non-compliance. There will be stronger rights around shift notice and cancellation pay for agency staff.

What is Secondary Legislation?

While the Bill sets the framework, secondary legislation will fill in the finer details in 2025–2026. This refers to additional legal rules introduced without passing a new law, allowing the government to clarify and enforce specific provisions. Keep an eye on gov.uk and ACAS updates to stay informed as more rules are published.

Enforcement: What Happens if You Don’t Comply?

The Fair Work Agency (FWA) will oversee the enforcement of holiday pay, minimum wage, statutory sick pay, agency and umbrella worker rights, and modern slavery laws. The FWA will have powers to inspect businesses, issue fines and penalties, and bring tribunal claims on behalf of workers.

Labour Market Enforcement Undertakings (LMEUs)

For serious breaches, the FWA can issue Labour Market Enforcement Undertakings. Ignoring these could result in court orders, unlimited fines, director-level liability, and even imprisonment in extreme cases. The tribunal claim window will be extended from three to six months.

What Employers and Agencies Should Do Now

To avoid falling behind, agencies and employers should take action now. Here’s a simple checklist to guide your next steps:

Update Policies and Contracts

Add clauses for guaranteed hours, notice periods, and leave rights. Amend unfair dismissal and redundancy policies. Revise agency agreements to include new protections.

Upgrade Systems and Tools

Ensure HR software supports day-one rights, bereavement leave, and flexible scheduling. Enable short-notice shift pay tracking.

Train Your Teams

Educate managers on harassment prevention, dismissal processes, and whistleblowing rules. Include compliance training in onboarding for managers and payroll/HR teams.

Communicate with Employees

Use plain language to explain new rights. Offer FAQs or Q&A sessions. Signpost support channels.

Review Key Areas

Audit shift allocation and leave processes. Review agency and umbrella worker arrangements. Monitor updates from the FWA and industry bodies.

Timeline: When Will the Employment Rights Bill Take Effect?

The Bill is expected to pass through Parliament by mid-2025. Secondary legislation will set detailed rules in 2025-2026. Most changes will take effect in 2026. While some parts may kick in this year, the bulk of the reform will land in 2026.

Proactive Preparation is Key

This isn’t just another policy change – it’s a total reset of how the UK approaches work. Businesses that prepare now will avoid disruption, reduce legal risk, and build stronger, more resilient teams. Being proactive means better recruitment and retention, stronger staff relationships, and a reputation for fairness and compliance.

Conclusion: Employment Rights Bill 2025

The Employment Rights Bill 2025 is a significant reform that will impact all employers. Understanding and preparing for these changes is crucial. If you need help upgrading systems or training your teams, Weston Financial offers funding that can support your next steps.

Explore business funding options with Weston Financial or contact us via email at tellmemore@westonfinancialltd.co.uk or telephone 0333 212 8557. Stay informed and proactive to ensure compliance and support your workforce effectively.

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