The Employment Rights Bill which is set to change the landscape of employment rights in the UK is anticipated to become law in November 2025 – although some key provisions will not come into effect until 2027.
The reforms are so extensive in scope that the proposed legislation has been described as the most significant overhaul of employment law since the introduction of the Employment Rights Act in 1996.
The key reforms:
Day One Unfair Dismissal protection
Perhaps the most discussed and controversial reform is to allow employees to claim unfair dismissal from day one of their employment. Currently an employee must have been employed for two years to be able to claim unfair dismissal in the Employment Tribunal although they are protected immediately where the dismissal is discriminatory.
To reduce the impact of this somewhat, the Government proposed the introduction of a mandatory probation period, known as the Initial Period of Employment. This is anticipated to be a nine-month period during which time an employer would be able to use a soft touch dismissal process, likely to include a statutory meeting. This would not apply to some specific dismissal situations like redundancy.
The House of Lords has proposed that, instead of the nine-month initial period of employment, the Bill introduces a simpler change by reducing the qualifying period for unfair dismissal UK claims from two years to six months.
These proposals will make their way through Parliament this month, with the final Bill expected to be finalised and made into law by 1 November. Once passed, the provisions will likely not come into force until 2027.
The key concern in respect of giving employee day 1 dismissal protection is that it will significantly slow down recruitment as employers may be reluctant to hire new employees unless they are confident that they are the most suitable person for the role. A stale job market would also deter employees from moving to different employers. Commentators say that giving employees day one rights will also dramatically increase the number of claims in the Employment Tribunal which is struggling with judicial resources. It can take up to two years for a case to conclude at the current time.
The proposed initial period of employment or the six month qualifying period would both alleviate some of these concerns, but the position on dismissals will be significantly shorter than employers are currently used to.
It is essential for employers to have processes in place to assess the performance and suitability of their employees to their roles, to monitor the length of service, and to review their contracts of employment and supporting policies. Employers should also expect to take on a more proactive role in monitoring the performance of employees in the early period of employment.
Time limits
The time limit for bringing claims in the Employment Tribunal will be extended from three months to six months (plus any additional period for ACAS conciliation). The purpose is to allow more time for parties to resolve disputes outside of court with the desired effect of reducing the strain on employment tribunals.
This won’t be implemented before October 2026 at the earliest. The time limit extension is not envisaged to apply to breach of contract or statutory redundancy claims.
Collective redundancies
Under the current rules, an employer has to collectively consult with its workforce where it proposes to make 20 or more redundancies in a single “establishment” within the business over a 90-day period or less. One establishment means the unit or entity to which the workers made redundant are assigned to carry out their duties. In most cases the unit will have its own operational or management structure.
The new reform widens the scope of collective redundancy by introducing a second trigger where the employer proposes redundancies across different sites which would not meet the one establishment figure but which reaches a specific number or percentage of the workforce. For example, 10 per cent of the work force. The specific number or percentage for this new multi-establishment trigger is not yet defined in the bill but will be set out in the regulations.
Employer penalties for a failure to consult collectively will also increase, with the maximum protective award rising from 90 days’ to 180 days’ pay per effected employee.
It should be noted that the duty to consult also applies to employees who are redeployed as part of a reorganisation or restructure where their contracts of employment effectively come to an end, which will need to be taken into account for the purpose of the multi-establishment trigger.
The new multi-establishment trigger will mean more collective consultation involving workplace representatives and trade unions. Employers should consider how they will pro-actively monitor the new trigger point and manage any such increase. Doubling the maximum protective award will increase financial risks for a failure to comply with collective consultation. As such, if you are an employer considering redundancies, we recommend taking advice at an early stage and as soon as possible.
Duty to prevent sexual harassment
The bill has been amended to extend the duty on employers to take all reasonable steps (not just reasonable steps, as was previously required) to prevent sexual harassment in the workplace.
The bill also specifies that the employer must take all reasonable steps to prevent sexual harassment by third parties, which may include delivery drivers or customers that could attend the workplace.
Disclosure of sexual harassment will also be protected under whistleblowing legislation.
If employers can establish that they have taken all reasonable steps, they can utilise the statutory defence to avoid liability for breach of duty. However, if they cannot, the Tribunal has the power to increase any compensation award by 25%.
We anticipate that this is likely to have a significant impact on the hospitality sector, particularly in situations where customers make remarks to or in the presence of employees (often under the influence of alcohol). Employers will need to take steps as soon as possible to actively prevent such behaviour and prepare a comprehensive policy and training of managers to reduce the likelihood of these claims.
This change is anticipated to come into effect in October 2026.
Changes to confidentiality clauses in NDAs
Under the bill, any clause in a contract or settlement agreement that attempts to silence an employee from making allegations of harassment (including sexual harassment) or discrimination will be legally void, unless the agreement falls under a narrow, as-yet undefined, exception. This purpose of this new rule is an effort to protect whistleblowers, victims of misconduct, and promote transparency in employment practices.
With this new law in effect, employers will no longer be able to rely on confidentiality clauses in settlement agreements to protect themselves from reputational damage which may arise following accusations or disclosures of harassment and discrimination. Employers may be less inclined to enter into settlement agreements without this guarantee, which may drive up claims in the Employment
Tribunal.
Therefore, ensuring robust policies and regular training of staff on the prevention of discrimination and harassment in the workplace will be essential in an effort to prevent such situations arising insofar as possible.
Statutory Sick Pay
The bill will remove the lower earnings limit requirement and the four-day waiting period for Statutory Sick Pay. Employers will need to update their sickness policies and contracts of employment accordingly.
This change is expected to be implemented as early as April 2026.
Maternity Leave protection period
Pregnant employees currently have additional protections upon returning from maternity leave. For 18 months following childbirth, employees have the right to be offered suitable alternative employment in a redundancy situation. Equivalent protection also applies to employees returning from shared parental leave or adoption leave, for a period of up to 18 months from the birth or the date of placement for adoption.
Additional protections will render it unlawful to dismiss a pregnant employee or one returning from maternity leave within six months of their return, except in limited circumstances (for example, gross misconduct or illegality).
These changes are not likely to come into effect until 2027.
In addition, we can expect changes to Fire and Rehire and Zero Hour Contracts.
The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.
© Miller Rosenfalck LLP, October 2025
