UK Employment Rights Bill 2025: Summary, Key Changes, and Compliance Guide

What Is the UK Employment Rights Bill?

The UK Employment Rights Bill is a landmark piece of employment legislation introduced to Parliament in October 2024 by the Labour Government. It amends and replaces significant portions of the Employment Rights Act 1996, representing the most comprehensive reform of UK employment law since the 1990s. The Bill covers unfair dismissal rights, flexible working, trade union recognition, zero-hours contracts, statutory sick pay, and employer notification obligations.

The Bill passed its Third Reading in the House of Commons in April 2025 and is now subject to House of Lords scrutiny. Royal Assent is anticipated in summer 2025, with a phased commencement schedule that extends implementation through 2026.

Key Changes: What the Employment Rights Bill 2025 Introduces

The Bill makes substantive changes across multiple areas of UK employment law:

1. Day-One Unfair Dismissal Rights

Current position: Employees must accumulate two years of continuous employment before gaining protection from unfair dismissal.

Bill change: Protection from unfair dismissal applies from day one of employment. The qualifying period of two years is abolished.

Practical impact: Employers must ensure robust probationary period processes are documented and compliant with fair procedure requirements from the first day an employee starts work. The Government has indicated a separate statutory probationary period of nine months will be introduced, during which lighter-touch dismissal procedures apply — but the employee still has rights from day one.

2. Zero-Hours Contracts: Guaranteed Hours Obligation

Current position: Workers on zero-hours contracts can be engaged with no minimum hours and no obligation to offer work.

Bill change: Workers who regularly work a consistent pattern of hours over a reference period gain the right to be offered a guaranteed-hours contract reflecting their actual working pattern.

Key details:

Reference period: 12 weeks (under current proposals)
Workers may accept or decline the guaranteed-hours offer
Employers cannot penalise workers for declining
Applies to agency workers as well as direct employees

3. Statutory Sick Pay (SSP) Reform

Current position: SSP of £116.75/week is payable from day four of illness. Employees earning below the Lower Earnings Limit (£123/week) are not entitled to SSP.

Bill change:

SSP payable from day one of illness (waiting day rule removed)
Lower earnings threshold removed — all employees eligible regardless of weekly earnings
SSP rate linked to a percentage of earnings for lower-paid workers (details in secondary legislation)

4. Flexible Working: Stronger Default Right

Current position: Employees with 26 weeks' service can make one flexible working request per year. Employers can refuse on any of eight statutory grounds.

Bill change: The right to request flexible working now applies from day one. Employers must have reasonable grounds to refuse. While the eight statutory grounds remain, employers must explain why a refusal is reasonable in the circumstances — a stricter test than previously.

5. Trade Union Reform

The Bill contains extensive changes to trade union law, including:

Simplified recognition process: Lower thresholds for statutory trade union recognition
Right to access: Trade unions gain the right to access workplaces to recruit and organise members, subject to access agreements
Industrial action: Changes to ballot thresholds, minimum service requirements for certain sectors, and restrictions on the use of agency workers during industrial action (reversal of 2022 regulations)

6. Bereavement Leave

Current position: The Employment Rights Act 1996 provides statutory parental bereavement leave (Parental Bereavement Act 2018) for parents who lose a child under 18.

Bill change: Bereavement leave extended to cover the death of any "close relative" — not limited to parent-child relationships. Minimum two weeks' leave entitlement from day one.

7. Protection for Pregnant Workers and New Mothers

The Bill strengthens redundancy protection for pregnant workers and new mothers, extending the protected period and creating new obligations around suitable alternative employment offers.

8. Equality Action Plans

Employers with 250+ employees will be required to publish equality action plans covering gender pay gap and menopause support — building on existing gender pay gap reporting obligations.

When Does the Employment Rights Bill Come Into Force?

The Bill does not have a single commencement date. Key implementation milestones (subject to Parliament and secondary legislation):

Provision	Expected Commencement
Royal Assent	Summer 2025
Day-one unfair dismissal rights	2026 (following consultation on probationary period)
Zero-hours guaranteed hours right	2026 (after reference period established)
SSP from day one	2026
Flexible working day-one right	Already in force (separate amendment October 2024)
Trade union access rights	Phased, 2025-2026
Bereavement leave extension	2026

Note: Many provisions will be enacted via secondary legislation (statutory instruments) after Royal Assent, meaning specific commencement dates will be confirmed later. Employers should monitor the government's Employment Rights Bill implementation tracker on GOV.UK.

How Does the Employment Rights Bill Affect UK Employment Law?

The Bill does not replace the Employment Rights Act 1996 in its entirety — it amends it significantly while preserving the Act's core framework. The practical effect is that the Employment Rights Act 1996 will look substantially different once the 2025 Bill's provisions are in force.

Key structural changes to UK employment law:

The two-year unfair dismissal qualifying period — a defining feature of UK employment law since the 1970s — is removed
Zero-hours contracts remain legal, but a parallel right to guaranteed hours creates a new category of workers who can opt into greater stability
SSP becomes a genuine safety net for all workers, not just those above the Lower Earnings Limit
Trade union law returns to a more union-favourable framework, reversing Conservative-era legislation

UK Employment Rights Bill vs EU Employment Standards

The Bill brings UK employment law notably closer to EU employment standards in several respects, despite Brexit:

Area	UK (post-Bill)	EU Standard
Unfair dismissal protection	Day one	Generally shorter qualifying periods in member states; some have no qualifying period
Zero-hours contracts	Regulated with guaranteed-hours right	Several EU states have restrictions or bans on zero-hours equivalents
SSP from day one	Yes (new)	Common across EU member states
Trade union access	Right to access	Standard in most EU jurisdictions

The UK is not re-adopting EU law — but the Labour Government's stated objective of making work more "secure and predictable" aligns with the EU's Transparent and Predictable Working Conditions Directive (2019/1152).

Compliance Requirements: What Employers Must Do Now

UK employers should begin preparing well ahead of commencement dates:

Audit probationary period processes — document fair procedure steps that will satisfy day-one unfair dismissal claims; introduce structured probationary period policies (9-month maximum under proposals)
Review zero-hours worker arrangements — identify workers who may qualify for guaranteed-hours offers; model cost and operational impact of converting regular workers
Update payroll for SSP — configure payroll systems to pay SSP from day one without waiting day deduction; ensure all employees (regardless of earnings level) are enrolled in SSP calculation
Brief line managers on flexible working changes — reinforce that refusals must be explained as reasonable in the specific circumstances, not just tick-box
Review bereavement leave policy — update to cover death of any close relative; confirm minimum entitlement of two weeks from day one
Prepare for trade union access — develop access agreement procedures if not already in place; prepare for increased union activity in the workplace
250+ employee equality plans — begin gathering data and drafting equality action plans if not already in progress
Update employment contracts — standard template contracts will require revision to reflect the new rights

Frequently Asked Questions

Q: What is the Employment Rights Bill UK? The UK Employment Rights Bill 2025 is a major piece of legislation introduced by the Labour Government in October 2024. It amends the Employment Rights Act 1996 to introduce day-one unfair dismissal rights, zero-hours contract reforms, statutory sick pay from day one, extended bereavement leave, and significant trade union changes. It is the most comprehensive employment law reform in the UK since the 1990s.

Q: When will the Employment Rights Bill become law? The Bill is expected to receive Royal Assent in summer 2025. However, most substantive provisions — including day-one unfair dismissal rights and zero-hours reforms — will not take effect immediately. Secondary legislation and a phased commencement schedule mean most provisions are expected to commence in 2026.

Q: Does the Employment Rights Bill abolish zero-hours contracts? No. Zero-hours contracts remain legal under the Bill. However, workers who regularly work a consistent hours pattern over a 12-week reference period gain the right to be offered a guaranteed-hours contract reflecting their actual working pattern. Workers can accept or decline the offer, but employers cannot penalise them for declining.

Q: What are day-one rights under the Employment Rights Bill? Day-one rights are employment protections that apply from the first day of employment, without requiring a qualifying period of continuous service. Under the Bill, unfair dismissal protection and the right to request flexible working apply from day one. The existing two-year qualifying period for unfair dismissal is removed, though a nine-month statutory probationary period with lighter-touch procedures is proposed.

Q: Will the Employment Rights Bill apply to small businesses? Yes. Most provisions of the Bill apply to all UK employers regardless of size. The equality action plan obligation (publishing gender pay gap and menopause support plans) applies only to employers with 250 or more employees. Zero-hours and SSP provisions apply to all employers.

Q: How does the Employment Rights Bill affect statutory sick pay? The Bill removes the three-day waiting period for SSP and the Lower Earnings Limit. Under the new rules, SSP is payable from the first day of sickness absence, and all employees are eligible regardless of their weekly earnings. The rate for lower-paid employees will be set as a percentage of earnings (details subject to secondary legislation).

Q: What is the difference between the Employment Rights Act 1996 and the Employment Rights Bill 2025? The Employment Rights Act 1996 is the existing foundational statute of UK employment law. The Employment Rights Bill 2025 is proposed legislation that, once enacted, will amend and supplement the 1996 Act. The 1996 Act will remain in force; the 2025 Bill adds new rights and modifies existing ones, most significantly abolishing the two-year unfair dismissal qualifying period and introducing zero-hours worker protections.

Q: Where can I find the full text of the Employment Rights Bill? The full text is available on the UK Parliament website at legislation.gov.uk. The Government's impact assessments and consultation papers are published on GOV.UK.

Related Legislation on Legiseye

Legiseye tracks UK employment legislation in real time alongside related developments:

UK Data Protection Act 2018 — governs employee data processing obligations for UK employers
Equality Act 2010 — age, sex, disability, race discrimination; interacts with the Bill's equality action plan requirements
National Minimum Wage Act 1998 — wage floor legislation updated annually
Trade Union and Labour Relations (Consolidation) Act 1992 — primary trade union legislation amended by the Bill

Monitor all UK employment legislation updates at legiseye.com.

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Last Updated: 2026-04-13 Author: Legiseye Legal Intelligence Team