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Keeping you updated on the progress of the Employment Rights Bill (ERB).

On 27th November 2025, a Government press release announced that the ERB’s headline reform, day – one ‘unfair dismissal’ rights, will be dropped in favour of reducing the current two-year qualifying period to six months.

The Lords had been insisting on a six month eligibility period, arguing that day one rights removes an essential ability for employers to assess competence and conduct before full unfair dismissal protection is offered. The change emerged after concessions to try to break the impasse in the Lords. There has been strong opposition to day one rights from almost across the board and the move will be welcomed by employers.

With Employment Tribunals struggling to keep up with surging demand, and some claims being

Although the press release didn’t address this, it’s understood that the power in the Bill to make regulations governing the “initial period of employment” (or statutory probationary period) is also likely to be dropped.

The Government does intend to prevent future Governments using regulations to change the qualifying period for unfair dismissal, meaning that an Act would be required for future changes.

The press release also announced that “the compensation cap will be lifted”. This is confirmed by the latest ammendments made by the Commons removing Section 124 of the Employment Rights Act- which is the section containing caps on compensatory awards in successful unfair dismissal claims. If, a big if, this is agreed by the Lords, compensation awards will be uncapped. Currently, the maximum compensation cap is the lower of 52-week’s pay or £118,223.

The Lords have also continued to push back on mandatory guaranteed hours for all zero hours contracts workers, arguing the excessive burden this places on smaller and medium-sized employers.

They have also been pushing to keep the 50% turnout threshold for a strike ballot action.

The Government planned for the Bill to pass in late October/ Early November this year. It published a road map to implementation earlier in the year, outlining its proposed timetable for more phased consultations and for bringing key measures of the Bill into force. This will now need to be ammended.

With the Houses rising for the Christmas break on the 18th December, it’s looking increasingly unlikely we will see the Bill passed before the New Year.

The 2026 reforms to sick pay, Day one paternity leave provisions, scheduled for April 2026, and the ban on fire and rehire, due in October 2026 are going ahead.

The majority of the reforms are set to take effect in April and October 2026, see below, with the most far reaching reforms including the changes to unfair dismissal rights and to zero-hour contracts, not arriving until 2027.

Phased consultations from Autumn 2025

Over the Autumn – Winter 2025/26 period there will be staggered consultations on:
Ending Zero hours contracts (the guaranteed hours provisions),
Bereavement Leave, and
Numerous measures to strengthen trade union powers.

Keep an eye here on all the consultations currently open the outcomes of those completed. Click here for the Governments fact sheets on the Bill’s provisions.

Think of the Employment Rights Bill as a shell, with many of the reforms just headlines, and alot of the detail to be filled in via regulations following the consultations.

The Government has also launched a comprehensive review of all parental leave and pay rights, which will run for 18 months from August 2025, before suggesting further changes to law and policy. So realistically we won’t see any changes to these provisions until 2027/2028.

Below is a summary of the new phased delivery plan for the ERB.

Timeline for when Employment Rights Bill changes will take effect

Immediate (on Royal Assent i.e Bill passing)

• Repeal of Strikes (Minimum Service levels) Act 2023
• Repeal of most of the trade union reforms, effectively rolling back almost all of the restrictions on calling strike action introduced by Conservative-led Governments since 2010. (Some provisions will be repealed via commencement order at a later date).
• Stronger protections against being dismissed for taking industrial action.
  

ERB measures becoming law in April 2026

• All workers will gain ‘day 1′ rights to Paternity Leave and Unpaid Parental Leave, scrapping existing service requirements. (Women are already entitled to Maternity leave (not maternity pay) from day 1 of employment).
• Statutory Sick Pay will be paid from the first day of sickness, and will become universal, removing the lower earnings threshold to qualify. Employees will receive Statutory Sick Pay from the first day they are off work. No more waiting until day four. No more unpaid short-term absences. Those earning less than the current lower earnings threshold- of £118.75 per week – SSP will be calculated at 80% of their normal weekly earnings.
• The ‘Fair Work Agency’ will be established, (though it’s not clear when this will be up and running and able to enforce). It is charged with monitoring and enforcing employee rights, bringing claims on behalf of employees, and empowered to levy higher fines on businesses which transgress.
• Protective award for breach of collective redundancy consultation requirements to double, (from 90 to 180 days gross pay).
• Trade union recognition processes will be simplified and electronic balloting will be permitted.
• Whistle blowing protections will be expanded to cover sexual harassment.
  

ERB measures becoming law in October 2026

• Ban on “fire and rehire” except in exceptional circumstances of imminent financial collapse.
• Upping the requirement on employers to take “all” reasonable steps to prevent sexual harassment, (not just reasonable steps),
• Employers to be held liable if Employees are harassed by third parties, (the so-called “banter ban”).
• Employers will need to consult staff on the distribution of tips
• Doubling the time limit for employees to bring Employment Tribunal Claims from 3 to 6 months.
• A package of Union reforms including allowing unions to access workplaces to organise and ballot members, new rights and protections for Trade Union reps, extending protection against detriment for taking part in industrial action.
  

ERB measures becoming law in 2027.

• Employees also gain Day-1 right to Bereavement Leave.
• New guaranteed hours offer for zero- and low-hours employees and agency workers, including right to reasonable notice of shifts, and payment for shifts that are cancelled, or moved at short notice.
• Increased protection against dismissal for pregnant employees.
• Employers will be required to reasonably justify refusals to flexible working requests.
• Further regulations to specify what amounts to ‘reasonable steps’ to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
• Large employers with over 250 staff will be required to publish menopause action plans as well as report on gender pay gaps (introduced on a voluntary basis in April 2026)
• Changes to the trigger for collective redundancy consultation requirements.
• Regulations for umbrella companies, to ensure that individuals working through these companies have comparable rights and protections to people working through employment agencies.
• Blacklisting of workers by employers. Effectively, discriminating against employees based on their Trade Union membership will be made illegal.
  

Practical implications for employers

It’s helpful to have a clear timetable showing when each measure will take effect. It’s also reassuring to see that for most businesses, there will be minimal changes in 2025 and nothing major changing until October 2026. Strike activity will be much easier as a result of the ERB changes. Employers with unionised workforces will need to pay close attention to the trade union measures being introduced as a priority.

If you’re looking at undertaking redundancies or restructuring, the picture is mixed. From April 2026, the protective award for failing to carry out collective consultation will double (from 90 to 180 days gross pay per employee) making it far harder (and costlier) for employers to avoid or buy out consultation obligations.

The ban on fire and rehire (in all but cases of imminent financial collapse) is set to follow in October 2026, giving employers around a year to make any necessary changes to terms and conditions under the current legal rules — which, while still available, remain complex and highly sensitive.

On the other hand, the proposed new trigger for collective consultation — which would add a further test to the existing 20-redundancies threshold — won’t come into force until 2027. This delay, alongside the deferral of day one unfair dismissal rights, gives employers slightly more breathing room to prepare.

Delaying the more far reaching reforms also buys the Government time to tackle the serious backlog in the employment tribunal system – ET claims are already taking a marathon 18 months to 2 years to get to final hearing. The roadmap refers to building “capacity and capability” to enforce the new rights — but without considerable investment in the court system this promise may be hard to deliver.

Steps you can take now

These look significant but actually are more about good housekeeping: reviewing policies, tightening up procedures and training line managers so the new laws don’t come as a surprise, and don’t trip up.

Sick Pay from day 1 of illness / removal of earnings limit: prepare for more short term sickness absence.

From April 2026, plan for more short term sickness absence. Ensure payroll systems are up to date and managers handling internal processes, settlement discussions etc. are informed of the new limits.

• Review and update sickness absence policies now, to be prepared for next April.
• Look at adjusting any enhanced sick pay schemes you have that align with SSP
• Begin tracking absence trends and strengthen your return-to-work procedures.
• Provide manager training so they can confidently manage short-term absences, capability issues, and medical referrals.
• Certain employers may find ‘bonusing’ employees to have a good non-sickness record may be an option where staffing is critical for service delivery.
  

Revisit collective consultation procedures

From April 2026, the protective award for failing to consult will double — making it harder (and costlier) to “buy out” the consultation risk. Employers should review policies now.

Fire and rehire. Make any changes soon

The restrictions on “fire and rehire” come into force in October 2026. Employers planning changes to terms and conditions should act well before then, while there is still legal flexibility.

Doubling of the time limits to bring ET claims. Prepare for longer ‘tribunal risk’ windows

With the doubling of time limits to bring claims from 3 to 6 months coming in October 2026, early resolution becomes more viable and important.

• Review and strengthen internal grievance and appeal processes
• Be more vigilant and keep detailed records of conversations as employees’ advisors will have more time to build strong claims, submit Data Protection Subject Access requests, negotiate via Acas or directly, and more time to bring ET claims that would previously have lapsed.
• Review and extend document retention to keep records at least 9 months post-incident – longer if litigation is possible.
• Begin tracking absence trends and strengthen your return-to-work procedures
• Provide manager training so they can manage confidently short-term absences, capability issues, and medical referrals.
• Reassess HR and legal fees budgets, as well as insurance over, particularly where an ET claim also refers to an issue covered by your Employer’s public liability insurance or another insurance. A longer claim window may well increase claim volume and raise premiums.

Unfair Dismissal protection rights from 6 months in the role/

Begin tightening recruitment processes and be disciplined in managing probationary periods. You should

• shore up recruitment processes to more effectively assess potential hires,
• set clear probationary targets,
• be very disciplined in your assessment of employees against those targets during their probationary periods,
• ensure line managers are trained now, and know how to monitor and assess new hires in probation periods,
• update poor performance and disciplinary procedures,
• don’t be afraid to use them. Train your line managers so they are much more comfortable having difficult conversations and taking an underperforming team members through a PIP, and
• Make sure to follow procedures strictly, as all employees will have dismissal protection from day one.
  

We can assist.

If you would like to discuss the Bill’s reforms or receive a straightforward action plan to prepare your business, please call us on 0203 755 5288 or get in touch by email or call us on 0203 755 5288.

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