Employment Rights Bill: Business owner guide to compliance

The Employment Rights Bill 2025 is currently making its way through Parliament, and it’s set to introduce some of the biggest workplace reforms in years. While many of the proposals could become law later this year, others may be introduced gradually through 2026 and 2027  and some details may still change before the Bill is finalised.

These upcoming changes could have a major impact on your business, your employees, and the way you handle day-to-day HR.

As a business owner, staying ahead of these developments isn’t just about compliance — it’s about keeping your team happy, protecting your business, and avoiding potential pitfalls before they happen.

At A4G, we’re here to make this simple. This guide highlights some of the key areas within the Bill, what they mean for your business, and practical steps you can take today to prepare.

If you’re a client and want hands-on support navigating these changes, you can book a meeting with our in-house HR specialist, Donna Bygrave, here.

Key areas of the Employment Rights Bill

The proposed reforms cover a wide range of employment topics. Some of the main areas include:

• Day-one employment rights
• Protection against unfair dismissal
• Ban on exploitative zero-hours contracts
• Restrictions on “fire and rehire” practices
• Stronger whistleblowing protections
• Third-party harassment responsibilities
• Sick pay and parental leave reforms

Further measures are expected to be introduced as the Bill progresses, covering areas such as:

• Removal of minimum service level rules for strikes
• Increased dismissal protection for industrial action
• Trade union rules and collective redundancy awards
• Gender pay gap and menopause action plans
• Creation of a Fair Work Agency
• Employment tribunal time limits
• Enhanced pregnancy and maternity rights
• Compensation for cancelled shifts
• Regulation of umbrella companies

These will likely be phased in over the coming years, so we’ll continue to provide updates as the legislation develops.

Day-One Employment Rights

What’s changing:

Employees will gain several rights from their first day of employment, including:

• Statutory Sick Pay (SSP)

• Parental and bereavement leave

• Protection from unfair dismissal

What this means for your business:

Previously, many rights, such as protection from unfair dismissal, required a qualifying period. Under the new rules, even new starters will have immediate protections.

How to prepare:

• Update contracts to reflect these rights

• Ensure onboarding includes clear communication about SSP and leave

• Review payroll systems to enable SSP from day one

Being proactive not only ensures compliance but also strengthens your reputation as a fair and supportive employer.

Enhanced Protection Against Unfair Dismissal

What’s changing:

The qualifying period for unfair dismissal claims may be removed, allowing employees to challenge dismissal from their first day.

How to prepare:

• Audit disciplinary and grievance procedures

• Train managers on fair dismissal and documentation

• Keep detailed records of performance management and communication

Clear, fair processes help reduce the risk of claims and demonstrate that your decisions are justified.

Ban on Exploitative Zero-Hours Contracts

What’s changing:

Employers will need to offer guaranteed minimum hours to those currently on zero-hours contracts.

What this means for your business:

This reform aims to improve job security for employees but may require workforce planning adjustments.

How to prepare:

• Review zero-hours agreements

• Convert suitable roles to minimum-hours contracts

• Communicate clearly with employees about any changes

Fire and Rehire Practices

What’s changing:

“Fire and rehire” practices, where employees are dismissed and rehired on less favourable terms, will generally be considered automatically unfair.

How to prepare:

• Avoid using this practice as a negotiation tactic

• Consult employees openly about proposed changes

• Keep full records of communication and agreements

A collaborative approach maintains trust and reduces legal risk.

Whistleblowing Protections

What’s changing:

Whistleblowing protections will extend to disclosures involving sexual harassment, discrimination, and unsafe working conditions.

How to prepare:

• Review your whistleblowing policy and reporting process

• Ensure staff know how to report concerns safely

• Train managers to respond sensitively and appropriately

Encouraging open communication strengthens workplace culture and compliance

Third-Party Harassment

What’s changing:

Employers can now be held liable for harassment by third parties, such as clients or customers, unless they’ve taken reasonable steps to prevent it.

How to prepare:

• Add third-party harassment clauses to your policies

• Provide training on identifying and reporting harassment

• Act promptly on any reported incidents

Sick Pay and Parental Leave

What’s changing:

• Statutory Sick Pay will be available from day one

• The lower earnings limit for SSP eligibility will be removed

• Parental and paternity leave will become day-one rights

How to prepare:

• Update payroll systems and contracts

• Plan for potential absences and flexible working needs

• Communicate entitlements clearly to staff

Supporting employees during these periods improves retention and morale