The UK’s upcoming Employment Rights Bill (ERB) introduces a number of important updates to workplace regulations, requiring businesses to adapt their policies and practices. While these changes bring new responsibilities, companies that prepare effectively can ensure they maintain compliance and the impact on operations and teams is minimised.
At the end of last year, the Government sought feedback on various aspects of the ERB and further consultations are expected in 2025. The ERB must also be scrutinised in Parliament, where proposed amendments will be considered. The ERB is expected to be passed into law no earlier than summer 2025, although many reforms will likely not take effect until 2026.
What are the key changes proposed by the Employment Rights Bill?
The new legislation focuses on several critical areas:
- Strengthened sexual harassment prevention
Employers must implement clear policies, conduct risk assessments and provide staff training to prevent workplace harassment. Non-compliance may increase legal liability.
- Expanded flexible working rights
Employees can submit two flexible working requests per year, with employers required to respond within two months. Declined requests must be justified with clear business reasons.
- Revised unfair dismissal rules
The qualifying period for unfair dismissal claims is expected to be reduced from two years to six to nine months, requiring businesses to strengthen their hiring and performance management practices.
- Extended tribunal claim periods
The window for employment tribunal claims may be extended from three to six months, increasing the need for proactive dispute resolution.
- Minimum wage increases
From April 2025, the National Living Wage will rise to £12.21 per hour for workers over 21, while 18–20-year-olds will see an increase to £10.00 per hour. Businesses must plan for higher payroll costs.
- Sick pay reforms
Statutory sick pay eligibility will expand as the lower earnings limit is removed. Companies should assess potential cost implications and update sick leave policies.
- Zero-hours contract regulations
While a full ban is unlikely, new regulations will target exploitative practices. Employers should ensure zero-hours contracts reflect actual working patterns.
- Fire and rehire restrictions
Businesses must notify ACAS before implementing dismissal and re-engagement strategies, extending redundancy timelines and requiring careful workforce planning.
- Family-friendly leave expansions
New entitlements include unpaid carers’ leave and 12 weeks of neonatal leave from day one of employment. Paternity leave eligibility will also expand, necessitating HR policy updates.
- Longer redundancy consultation periods
Businesses planning large-scale redundancies may need to conduct consultations for up to 90 days, affecting workforce planning strategies.
How to prepare for the changes
To stay compliant and minimise disruption, businesses should:
- Update employment contracts to reflect dismissal rights, sick pay and flexible working changes.
- Revise HR policies on harassment, discrimination and redundancy procedures.
- Train managers to handle new employment rights effectively.
- Budget for wage increases and expanded leave entitlements.
- Refine hiring and performance management processes to ensure employees meet expectations before the revised dismissal period takes effect.
Will these changes deter businesses from operating in the UK?
While regulatory updates may require adaptation, they should not be seen as a deterrent to doing business in the UK. As with so many situations, the key to sustainable success lies in being flexible, proactive and having the right team in place. Many of these changes align with global employment trends which aim to foster fairer workplaces and enhance employee satisfaction, which in turn improves productivity and retention. Businesses that get on the front foot by adjusting their strategies will be in a much better position to continue to thrive.
Working with the right procurement and supply chain partner
Adapting to evolving employment laws is a challenge but it’s much easier with the right team behind you. Partnering with a procurement and supply chain recruitment specialist like Bramwith helps ensure your business attracts and retains the top talent while ensuring compliance and resilience. We can also support you with refining hiring strategies, improving workforce planning and supporting regulatory adaptation.
Contact our team today to find out how we can help.
