Understanding the Employment Rights Bill 2025

This Bill introduces new obligations for employers across key aspects of the employment relationship ranging from recruitment and working conditions to how disputes are resolved. Despite what appears to be some nervousness in government about some of these provisions, they are expected to take effect in phases from 2026, with full implementation by 2027.

What does the bill propose?

• Day-One Rights: Possibly the most contentious provision, this allows an employee access to the Employment Tribunal in cases of unfair dismissal from day 1 of employment. Employees are also given the right to request flexible working from day 1 of employment.

• Extended Tribunal Deadlines: The window of opportunity for an employee to bring a claim against their employer is increased from 3 to 6 months.

• Enhanced Sick Pay and Leave: Employees will be entitled to Statutory sick pay from the first day of employment and it will cover all employees regardless of their rate of pay, this will increase employer costs. Employees will also be entitled to claim day 1 rights to parental, paternity, neonatal and pregnancy bereavement leave.

• Zero-Hours Contract Reform: Employers will be obliged to offer staff contracts based on actual hours worked over a 12-week reference period. Employers may still use casual or zero-hours contracts, but only if they can demonstrate a legitimate business reason for doing so such as fluctuating demand or an ad hoc project.

• Fire-and-Rehire Restrictions: One of the most trailed but, in my opinion least contentious as it is so rarely used. These new rules limit the ability to dismiss and rehire staff on less favourable terms.

• Union Access Rights: Trade union powers will be increased including a right to enter a workplace to recruit and organise members. Employers will have a specific legal responsibility to inform workers of their right to join a trade union.

Strategic Response Number 1: Rethink your recruitment.

Poor or sloppy recruitment has always been where employment problems really start. With new employment rights including unfair dismissal protections from day one, getting recruitment right, rather than just ‘getting someone in’ is more important now than ever.  A poor hire is now harder than ever to reverse without legal risk so how can you improve your recruitment success rate? Here are some pointers:

• Draw up a detailed job description and person specification. Use the skills and behaviours vital to success in the job as your key benchmarks. If you are going to reward on performance, make sure that the performance criteria are included in the job description itself.

• Consider using skills assessments or psychometric or other testing. These inputs should help you get a more rounded picture of the person being considered. 

• Use your job description and person spec as the core around which you will ask your interview questions.

• Always try to have a second person on hand to assist in the interviews themselves. When the interview is concluded make sure you compare notes as to suitability straight away, before memories fade.

• If appropriate, arrange a tour of your premises with a staff member not otherwise involved in the recruitment. Sometimes these informal events can produce vital additional information about a candidate.

• Ask for and take up references in advance of a formal offer. It’s true that people are more limited in what can be said in a reference today but any piece of additional information you can gain from them will help complete the picture.

• On employment, set a probation period and actively monitor it, don’t just let it drift by. There is still a possibility that the final Employment Rights Bill 2025 may allow short service dismissals within a probation period but, even if it does not, an actively managed probation period helps set behavioural standards.

Strategic Response Number 2: Embrace Automation and HR Technology.

This is always a tricky subject but, with all employees soon to be able to take their employer to Court and with the added administrative, legal, compliance and, let’s face it, emotional costs of defending such claims it really makes sense to look anew at whether automation might be a cheaper and less stressful option. Naturally, the nature of such automation will depend on the area in which you work but other areas which would benefit from this approach are those which will help you with your HR Compliance and stay on the right side of the law such as:

• Automating your routine HR processes such as employment contract updates, holiday and sickness tracking, probation and performance reviews.  Keeping on top of all these will enable you to manage your staff in a professional and evidence based way leaving far less room for challenge if you have to lose an underperforming member of staff.

• Use scheduling software. This will help you manage those all important tribunal deadlines as well as what will be an increased number of flexible working requests. It will also enable you to monitor shift patters more efficiently so that you can modify contracted employment hours when the business need changes.

Strategic Response Number 3: Consider Freelance Contractors.

As the conventional employer employee relationship faces ever tighter regulation, Freelancers can help a business retain some of the flexibility that is being lost without breaching employment law.

As part of the greater discipline I encouraged in recruitment (above) it is also worth factoring into that process asking questions about the nature of the role itself. For example, whether the need for a new role is truly a long term one or even whether existing roles could be re-designed to make them suitable for a freelance approach, consider this another way of outsourcing.

There are, of course, criteria that have to be satisfied for someone to be considered truly self employed rather than an employee by another name but, if those tests are met, engaging staff on a project or seasonal basis or redesigning a job to allow it, would provide a viable alternative to the extra rigidity being forced into the standard employment relationship.

Strategic Response Number 4: Manage it!

There is no doubt that The Employment Rights Bill 2025 is going to make increased demands on Employers and requires a more thorough day to day approach to manage its provisions. What do you need to do on a day-to-day level to help your management team cope with the change?

·       Update your Employment Handbook Policies and Train your Managers!

Your employment policies will have to be rewritten to reflect the new legislation in terms of rights and obligations. Key managers will need training on handling some of the issues that will come their way particularly on union access, and dismissal procedures.

·       Engage Proactively with Employees and Unions.

If you are wary about having unions involved where you have never had them before, improving communication with your staff through satisfaction surveys and employee forums is a good way to pre-empt disputes, it can also encourage innovation and business improvements.

If you are approached by a union, then the best response is to deal proactively. They should be just as interested as you are in fostering a productive relationship so explore what areas might benefit from mutual co-operation. Above all try to establish a productive personal relationship with your opposite number.

·       Monitor Costs and Adjust Operations.

You will, of course, work out the additional costs to you of enhanced employment entitlements such as SSP and holidays. To keep a control on your costs you will certainly want to look at whether you really need to add additional staff or even whether some restructuring either of jobs or responsibilities is required. However, it could be that you already offer a set of benefits to current employees in excess of your statutory requirements. If so, and because restructuring can take time, looking at savings you may be able to make to your benefits package to compensate for the extra costs of this legislation, might be a good place to start.

Although the Employment Rights Bill 2025 will demand a greater thoroughness in your approach to employee relations it is worth bearing in mind that it will still be possible to deal with poor performance and disciplinary matters, just that you will need to be as thorough in your approach with a new staff member as you have previously been with someone with two years’ service. Also, by paying closer attention to recruitment, by embracing automation and leveraging freelance talent, you will be able to remain flexible, competitive, and legally sound whilst even seizing new opportunities for improvements along the way.

However, by improving recruitment, embracing automation, and leveraging freelance talent, businesses can remain flexible, competitive, and legally sound and with a proactive approach to employee monitoring, record keeping and performance management there is no reason why staff cannot be effectively managed and employment tribunal claims kept to a minimum.