Employment Law

Employment Rights Bill 2025: The Biggest Shake-Up in Employment Law for a Generation

Summary

The new Employment Rights Bill is the UK's most significant labour law upgrade in decades, focused on making work fairer and more secure for all. It mandates the end of zero-hours contracts, bans 'fire and rehire', and introduces stronger family, equality, and anti-harassment rights. HR teams must immediately begin auditing contracts and policies, as these crucial changes are set to redefine the workplace from 2026.

You will learn about the scope and key provisions of the forthcoming Employment Rights Bill and its impact on UK businesses:

Major legislative changes concerning job security, including the ban on zero-hours contracts and "fire and rehire."
New day-one rights for employees, such as unfair dismissal protection and enhanced parental leave entitlements.
Strengthened equality and harassment prevention duties for employers, including protection against third-party harassment.
The critical timeline (expected to pass in 2025, taking effect from 2026) and the immediate action steps HR teams must take now to prepare, such as auditing contracts and updating policies.

The government’s new Employment Rights Bill part of its Plan to Make Work Pay marks the most significant upgrade to UK employment law in decades.

Its aim? To make work fairer, safer, and more secure; but for HR leaders, it means a wave of legal and operational change that will redefine everything from contracts to culture.

1. Fair Work and Job Security

The Bill tackles one-sided flexibility and insecure work by introducing:

End to exploitative zero-hours contracts, bringing guaranteed hours, fair notice, and compensation for cancelled shifts.
Ban on ‘fire and rehire’, with dismissals for refusing contract changes becoming automatically unfair.
Day-one unfair dismissal rights, balanced with a new statutory probation framework.
Stronger redundancy obligations, closing consultation loopholes for UK and maritime employers.

2. Fair Pay and Working Conditions

Key financial and contractual protections include:

Strengthened Statutory Sick Pay with no lower earnings limit, no waiting period.
Fair Pay Agreements for adult social care workers.
New tipping consultation rules to ensure transparency.
Reintroduction of the Two-Tier Code protecting outsourced workers.
Mandatory Seafarers’ Charter to improve maritime working standards.

3. Family-Friendly and Flexible Working Reforms

The Bill boosts flexibility and inclusion with:

Day-one rights for paternity and unpaid parental leave.
New unpaid bereavement leave for all employees.
Stronger protections for maternity and pregnancy, extending six months post-return.
Enhanced flexible working rules; refusals must now be reasonable and justified.

4. Equality, Wellbeing, and Inclusion

Employers must now:

Take “all reasonable steps” to prevent sexual harassment including from third parties.
Protect whistleblowers who report harassment.
Publish action plans to address gender pay gaps and support employees through menopause.

5. Enforcement and Trade Union Reform

Creation of a new Fair Work Agency to enforce pay, holiday, and agency laws.
Tribunal claim limits extended from 3 to 6 months.
Simplified trade union rules, repealing restrictive strike legislation.