Understanding the UK Employment Rights Bill: What You Need to Know

The UK Employment Rights Bill (ERB) is one of the most significant shifts in workplace law in recent years. Set to roll out in stages from mid to late 2025, the Bill is designed to modernise outdated regulations and strengthen protections for workers.

For employers and employment agencies, this isn’t just background noise; it means new legal duties, higher compliance expectations, and the need to rethink how you manage placements, contracts, and policies.

Let’s break it down.

Key Changes Introduced by the Bill

Day One Rights

• Employees will now be entitled to protections from their very first day on the job, including sick pay, parental leave, and unfair dismissal rights.
• This removes the old two year qualifying period for unfair dismissal claims.

Flexible Working as Default

• Every employee will have the right to request flexible working immediately.
• Employers will need clear policies and managers trained to handle these requests fairly.

Zero Hour Contract Reform

• Workers on zero hour and low hour contracts can request guaranteed hours after a reference period.
• Agencies and employers must also give reasonable notice for shifts, and pay compensation for late cancellations.

Ban on ‘Fire and Rehire’ Practices

• Employers face stricter rules when trying to dismiss and rehire staff on less favourable terms.
• Tribunals can now adjust compensation by up to 25% if employers fail to follow the new Code of Practice.

Statutory Sick Pay (SSP) Expansion

• SSP will be payable from day one of illness.
• The lower earnings limit is being removed, making sick pay available to more workers.

Extended Tribunal Time Limits

• Employees now have six months (plus Early Conciliation) to bring claims, doubling the previous three month limit.
• Agencies should expect a higher risk of tribunal claims, particularly in temp or remote arrangements.

New Fair Work Agency

• A new body will oversee compliance with minimum wage, holiday pay, and working conditions across all sectors.

Additional Reforms on the Horizon

• Statutory neonatal care leave and pay (from April 2025).
• Day one bereavement leave (including pregnancy loss).
• Stronger protections against workplace harassment, with employer duties potentially raised to “all reasonable steps.”
• Gender equality and menopause action plans for larger employers.
• Trade union reforms, including digital access rights and easier recognition thresholds.

What This Means for Employers

Higher Compliance Expectations
Every placement, temp or perm, carries greater responsibility from day one. Employers will need to ensure contracts, policies, and payroll systems align with the new rules.

Contract Reviews Required
Zero hour models may need to shift towards guaranteed hour or umbrella arrangements. Employers and Recruitment Agencies should revisit dismissal clauses, contract variations, and flexible working terms to remain compliant.

Manager and Consultant Training
Team leaders and consultants must be confident in handling contract changes, grievance procedures, and flexible working requests. Clear, consistent training is essential.

Greater Tribunal Risk
With longer time limits and stronger worker protections, the risk of disputes increases. Employers should strengthen documentation, reporting procedures, and compliance checks to protect themselves.

Actions to Take Now

• Audit your contracts, policies, and onboarding materials.
• Revisit dismissal, variation, and flexible working procedures.
• Train consultants and managers on the upcoming changes.
• Assess your workforce model.
• Partner with payroll providers who deliver audit ready compliance.

The Employment Rights Bill is not just another policy update, it’s a structural shift in how agencies, hirers, and workers engage with one another. Companies that adapt early - updating contracts, training managers, and investing in compliance ready systems, will be best placed to thrive in the new landscape.