Understanding the Employment Rights Bill

The Employment Rights Bill, expected to pass in 2025, will overhaul UK employment law. Key changes include day-one rights for dismissal and leave, shift protections, new agency worker rules, and a watchdog for enforcement. Here’s what you need to know – and how to prepare.

The UK employment landscape is about to go through the biggest shake-up in a generation. The Employment Rights Bill is a wide-reaching reform of employment law that’s part of the government’s plan to “make work pay” and tackle insecure work.

For employers, recruitment agencies, HR teams, and compliance officers, this isn’t simply about staying on the right side of the law – it’s about preparing for a fairer, more stable future of work.

In this guide, we’ll walk you through what’s changing, when it’s happening, and what you can do now to get ahead.

What is the Employment Rights Bill?

The Employment Rights Bill is a major reform of UK employment law. It aims to strengthen workers’ rights, improve job security, and support business productivity by modernising protections across the workforce.

Introduced in October 2024, the Bill is part of the government’s plan to “make work pay” and address insecure or unfair working conditions. It’s expected to pass by mid-2025, with most reforms coming into effect in 2026 through secondary legislation.

The Bill will apply to:

UK employers of all sizes
Recruitment agencies and umbrella companies
HR teams and compliance professionals

Key reforms and new employment rights

Let’s break down the changes into simple sections. Each one affects how you hire, manage, and support your workforce.

a) Zero hours and flexible work

The Bill tackles the uncertainty of zero-hours contracts by introducing:

The right to guaranteed hours for workers on irregular contracts
Advance notice for shift schedules
Compensation for last-minute shift cancellations

These rights will also apply to agency workers, helping improve stability and predictability for those with flexible work patterns.

For example, a care agency scheduling staff week by week will now need to provide consistent hours or risk non-compliance.

b) Unfair dismissal and fire and rehire

Unfair dismissal will become a day-one right. Until now, workers needed two years of service before they could claim unfair dismissal. That’s changing.
The Bill also cracks down on fire and rehire. Dismissing employees for not accepting worse contract terms will be considered automatically unfair in most cases.

For example, a company trying to force employees onto zero-hours contracts could now face tribunal claims if staff are dismissed for not agreeing.

c) Parental leave, paternity, and bereavement rights

Employees will no longer need a minimum length of service to qualify for both paternity leave and unpaid parental leave
A new right to unpaid bereavement leave will be introduced
Paternity leave can be taken after shared parental leave, offering more flexibility for new parents

d) Workplace protections and harassment

Employers will be legally required to take all reasonable steps to prevent:

Sexual harassment, including from customers or other third parties
Discrimination against pregnant workers or new parents
Retaliation against whistleblowers who report wrongdoing

e) Trade union rights and recognition

The Bill makes it easier for trade unions to gain recognition and access workplaces:

Lower thresholds for union recognition
Repeal of laws requiring minimum service levels during industrial action

f) Agency and umbrella workers

For the first time, umbrella companies will face direct regulation. The Bill also gives more protection to agency workers:

Regulation of umbrella companies to stop misuse and non-compliance
Stronger rights around shift notice and cancellation pay for agency staff, including fair pay for cancelled shifts and advance scheduling rights

For example, an umbrella company that withholds holiday pay or deducts fees without consent will now face stricter penalties.

What is secondary legislation?

While the Bill sets the framework, secondary legislation will fill in the finer details in 2025–2026. This refers to additional legal rules introduced without passing a new law, allowing the government to clarify and enforce specific provisions.

Keep an eye on gov.uk and ACAS updates to stay informed as more rules are published.

Enforcement: What happens if you don’t comply?

A new watchdog, the Fair Work Agency (FWA), will oversee the enforcement of:

Holiday pay
Minimum wage
Statutory sick pay
Agency and umbrella worker rights
Modern slavery laws

The FWA will be able to:

Inspect businesses
Issue fines and penalties
Bring tribunal claims on behalf of workers

The FWA will operate similarly to HMRC, with powers to inspect, fine, and enforce – but with a specific focus on workers’ rights. Those likely to be inspected first would include high risk industries and repeat offenders.

Labour Market Enforcement Undertakings (LMEUs)

For serious breaches, the FWA can issue Labour Market Enforcement Undertakings. If you ignore these, you could face:

Court orders
Unlimited fines
Director-level liability
Even imprisonment in extreme cases

Also worth noting: the tribunal claim window will be extended from three to six months.

What employers and agencies should do now

To avoid falling behind, agencies and employers should take action now. Here's a simple checklist to guide your next steps:

Update policies and contracts

Add clauses for guaranteed hours, notice periods, and leave rights
Amend unfair dismissal and redundancy policies
Revise agency agreements to include new protections

Upgrade systems and tools

Ensure HR software supports day-one rights, bereavement leave, and flexible scheduling
Enable short-notice shift pay tracking

Train your teams

Educate managers on harassment prevention, dismissal processes, and whistleblowing rules
Include compliance training in onboarding for managers and payroll/HR teams

Communicate with employees

Use plain language to explain new rights
Offer FAQs or Q&A sessions
Signpost support channels

Review key areas

Audit shift allocation and leave processes
Review agency and umbrella worker arrangements
Monitor updates from the FWA and industry bodies

Timeline: When will the Employment Rights Bill take effect?

Date	What’s happening
Mid-2025	Expected passage through Parliament
2025-2026	Secondary legislation sets detailed rules
2026	Most changes take effect

So while some parts may kick in this year, the bulk of the reform will land in 2026.

Proactive preparation is key

This isn’t just another policy change – it’s a total reset of how the UK approaches work. Businesses that prepare now will avoid disruption, reduce legal risk, and build stronger, more resilient teams.

Being proactive means:

Better recruitment and retention
Stronger staff relationships
A reputation for fairness and compliance

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📌 Useful resources

Employment Rights Bill factsheets on gov.uk
ACAS guidance on workplace rights
Gov.uk guide to employment law changes