The Employment Rights Bill is back in the spotlight, with significant amendments and government consultations shaping the biggest reform to UK employment law in a generation. Since its first publication in October 2024, the Bill has undergone multiple changes, with further developments expected before it becomes law.
For employers and job seekers, staying ahead of these changes is crucial. Here’s what we know so far, what’s still to come, and how businesses may need to prepare.
Key Proposed Changes
One of the major changes involves statutory sick pay (SSP). It will now be payable from day one of illness, removing the current waiting period. Employees earning below the Lower Earnings Limit (LEL) will also become eligible. The rate will be set at 80% of average weekly earnings or the flat SSP rate of £118.75 from April 2025, whichever is lower.
Rules around collective redundancies and fire-and-rehire practices are also set to become stricter. The maximum “protective award” for failing to consult on redundancies will double from 90 to 180 days of uncapped pay. Employers will be required to retain holiday pay and entitlement records for six years to ensure compliance, and new government guidance on redundancy consultation processes is expected to be published.
Workers on zero-hours contracts will gain the right to request guaranteed hours based on their normal working patterns. This right will also extend to agency workers, although further details are yet to be confirmed.
Changes to industrial relations and trade union laws include an increase in the strike action notice period from seven to ten days. Industrial action ballot mandates will now last 12 months instead of six months. Plans to repeal the 50% turnout threshold for industrial action ballots remain under consultation.
Oversight of umbrella companies, which are often used to manage payroll for agency workers, will be strengthened. These companies will now be regulated under the Employment Agencies Act 1973, with greater enforcement powers.
What’s Next?
The Bill has now passed its third reading in the House of Commons on 12 March, with final amendments debated and approved. It has now moved to the House of Lords, where the second reading is scheduled for 27 March. If it progresses without significant delays, the Bill is expected to receive Royal Assent later in 2025. While some reforms could come into effect by the end of this year, most changes are anticipated to take effect from Autumn 2026.
How Will These Changes Impact Employers?
According to the latest survey by the CIPD, 79% of employers expect the Bill to increase employment costs. Many businesses are already exploring ways to manage these costs. Some are considering reducing hiring or making redundancies, while others are investing in automation to reduce reliance on staff. Cutting training budgets or reducing working hours are also being weighed as potential cost-saving strategies.
For small businesses, adapting to the new compliance requirements may be particularly challenging. There is growing demand for a phased implementation plan and clear government guidance to help businesses transition smoothly.
What Should Employers and Job Seekers Do Now?
Employers should stay informed and begin preparing for upcoming changes to sick pay, redundancy procedures, and zero-hours contracts. Understanding how these changes will impact workforce management is essential for ensuring compliance.
Job seekers should familiarise themselves with their rights, as the reforms will affect key areas such as flexible working, unfair dismissal protections, and pay entitlements. Knowing what to expect can help them make informed career decisions.
As the Bill progresses, we’ll continue to provide updates to help businesses and job seekers navigate the changes. Follow Huntress for the latest employment law insights and expert advice.
