The Employment Rights Bill has just received Royal Assent and has now become the Employment Rights Act 2025. This legislation represents one of the most significant overhauls of employment law in recent years, with reforms spanning trade union rights, sick pay, family-friendly leave, flexible working, and more.
For employers, staying ahead of these changes is critical to ensure compliance, avoid risk, and continue to support their workforce effectively. In this guide, we summarise the key highlights and outline practical steps employers can take now to prepare.
Key Highlights of the Employment Rights Bill 2025
The changes introduced by the Employment Rights Bill will be phased in from 2025 through to 2027, and cover a wide range of employment law areas. Below is a breakdown of the most important changes for employers to note.
Trade Union Rights
The Bill strengthens employee rights in relation to trade unions:
- Repeal of the Strikes (Minimum Service Levels) Act 2023 and much of the Trade Union Act 2016.
- Simplified recognition processes and industrial action ballot requirements.
- Enhanced protections for employees taking industrial action, reducing the risk of unfair dismissal claims.
- From 2026 onwards, electronic and workplace balloting will be introduced, streamlining industrial action procedures.
Statutory Sick Pay (SSP)
Significant improvements to sick pay entitlements include:
- Day-one entitlement for all employees.
- Removal of the lower earnings limit (LEL), allowing all eligible employees access to SSP.
- SSP payable at 80% of normal weekly earnings or the flat rate, whichever is lower.
Employers will need to review payroll and absence processes to ensure smooth implementation.
Family-Friendly Rights
The Bill introduces important changes to parental rights:
- Paternity leave becomes a day-one right, removing the 26-week service requirement.
- Unpaid parental leave is also available from day one, removing the one-year service threshold.
Collective Redundancy
- The maximum period of the collective redundancy protective award will be doubled.
- Employers must prepare to manage consultations across all sites and workplaces if thresholds are met.
Whistleblowing and Workplace Protections
- The Bill clarifies protections for employees reporting workplace sexual harassment, explicitly recognising such disclosures under whistleblowing legislation.
- Employers will also be required to take “all reasonable steps” to prevent sexual harassment and harassment from third parties, such as clients or customers.
Flexible Working
- Flexible working will become a default day-one right, giving employees more control over their working arrangements.
Fire & Rehire Restrictions
- The Bill will severely restrict the use of “fire and rehire,” making dismissals linked to refusal to accept contractual changes generally automatically unfair.
- Exceptions are very limited and relate primarily to demonstrated financial necessity.
Zero-Hours and Low-Hours Contracts
- Workers on these contracts, including agency workers, will gain rights to:
- Guaranteed hours reflecting regular work patterns
- Reasonable notice of changes to shifts
- Compensation for cancelled or curtailed shifts
Bereavement Leave
- A new day-one entitlement to at least one week’s leave, including for parents experiencing miscarriage before 24 weeks.
Gender Pay Gap & Menopause Action Plans
- Employers with 250+ employees will be required to publish action plans addressing gender pay gaps and menopause support by 2027.
Unfair Dismissal
- The qualifying period will reduce from two years to six months, and the compensation cap will be lifted
How Employers Can Prepare
While some changes won’t come into effect until 2026 or later, proactive planning is essential. Here are practical steps employers should consider:
- Review Policies and Contracts
- Update handbooks, contracts, and policies to reflect new day-one rights, flexible working, sick pay, family leave, and bereavement entitlements.
- Audit zero-hours and agency contracts to ensure compliance with new guaranteed hours and notice requirements.
- Train Managers and Staff
- Ensure managers understand changes to sick pay, flexible working, trade union rights, and consultation obligations.
- Communicate upcoming changes to employees to manage expectations and maintain engagement.
- Prepare for Consultation and Collective Redundancy
- Review current consultation processes and train staff responsible for collective redundancy procedures.
- Plan to track redundancies across multiple sites to ensure thresholds are met.
- Develop Gender Pay Gap and Menopause Action Plans
- Organisations with 250+ employees should start gathering data and planning action strategies for gender pay gaps and menopause support.
- Review Recruitment and Onboarding Practices
- Adjust induction periods, probation management, and recruitment processes to reflect the reduced unfair dismissal qualifying period.
- Keep Updated
Many areas will be shaped by secondary legislation, consultations, and codes of practice. Regularly monitor government updates to ensure compliance.
How Park City Can Help
At Park City, we understand that the Employment Rights Bill 2025 represents a significant change for employers. We can help you:
- Update policies, contracts, and employee handbooks
- Navigate trade union obligations and consultation requirements
- Support flexible working, zero-hours, and agency worker arrangements
- Develop gender pay gap and menopause action plans
- Provide manager and employee briefings and training
- Monitor and interpret new regulations and codes of practice
Contact us today to discuss how these changes could affect your organisation and how we can support you in being ready for 2025 and beyond.
