No doubt you'll have heard the news - The Employment Rights Bill has finally passed through Parliament and is now awaiting Royal Assent. This means that it will shortly become law as The Employment Rights Act 2025🎉

There’s been a lot written about what might happen, what nearly happened, and what was debated along the way. Now that it’s landed, this is about understanding what’s actually been agreed, what’s coming next, and what employers should realistically be thinking about.

1) Unfair dismissal:

The proposal for day one unfair dismissal rights didn’t make it through. Instead, the qualifying period has been reduced to six months, replacing the long-standing two year threshold. In practical terms, this means employees will be able to bring unfair dismissal claims much earlier in their employment. Probation periods therefore become even more important than they already were.

Employers will need to make sure probation meetings are happening well in advance  of the six-month point - we can't reiterate how important this is going to be. Leaving reviews until month five and a half, or relying on informal check-ins, is likely to cause problems. Any extension of a probation period that takes an employee beyond six months will mean they have qualified for unfair dismissal rights. In reality, this means companies should be assessing whether things are genuinely working by around month four or five at the latest. If there are real doubts, those need to be addressed early and clearly. Where it’s not working, delaying a decision or extending probation “to see how it goes” could significantly increase risk - ask yourself, is it worth it? Clear decisions made earlier, while still fair and human, will often be the safer route. And remember, if it's really not working you can end a probation period at any point - you don't need to wait until the end.

The new qualifying period is expected to apply to employees who have six months qualifying service on 1 January 2027, with regulations to be issued early 2026. 

2) Removal of Statutory Cap on Unfair Dismissal Compensation

Alongside this, the Bill removes the statutory cap on unfair dismissal compensation. Previously, awards were limited to the lower of a statutory maximum (currently set at £118,223) or a year’s pay, whichever is lower. That limit is going. This increases potential financial exposure where dismissals aren’t handled properly, particularly for higher paid roles. It also puts greater emphasis on good process, clear evidence and consistent decision making from the very start of employment.

The timing of this change is slightly unclear, although it seems most likely that the government plans for it to take effect for dismissals from 1 January 2027, at the same time as the change in qualifying period.

3) Day one rights that are going ahead

While unfair dismissal won’t apply from day one, other rights will. The Bill confirms statutory sick pay from day one of absence, as well as day one paternity leave and unpaid parental leave. These changes will require updates to contracts, policies, payroll processes and manager guidance. For those who pay SSP only, this is going to impact your costs, so make sure your budgets account for it. We're also likely to see some changes to employee behaviour around sickness such as less presenteeism.

These are still scheduled to come into force in April 2026.

4) Flexible Working & Bereavement Leave

Alongside day one parental and paternity leave rights, the Bill keeps provisions on flexible working (expected in 2027) that require employers to respond reasonably to flexible working requests and explain refusals in writing. There’s also a new right for employees and their partners to bereavement leave for pregnancy loss before 24 weeks, reflecting evolving expectations about leave entitlements. A consultation has been launched seeking views on who should be eligible for this right, when the leave can be taken and any notice and evidence requirements.

5) Collective Redundancy Process

You should also be aware that the Bill changes how collective redundancies are handled. The reference to “at one establishment” stays in the law, but there’s an additional threshold test coming in regulations that could mean broader consultation duties than under the old legal test. At the same time, the maximum protective award for failing to consult has doubled  from 90 to 180 days’ pay, meaning the financial risk of skipping or poorly managing consultation has increased drastically.

6) Guaranteed hours and predictable work patterns

The Act introduces new protections for people on variable or insecure working patterns, including a right to request guaranteed hours and greater predictability around shift patterns and notice. The detailed mechanics are still to come through further regulations, but employers using zero-hours contracts, variable shifts or short notice scheduling should expect change here. This is likely to affect workforce planning, scheduling practices and how flexibility is structured and communicated.

The guaranteed hours regime in the Act is detailed and will be set out further in regulation. It doesn’t just address zero-hours contracts - employers may need to offer guaranteed hours to a qualifying worker when the hours they regularly work exceed the minimum set out in their contract. Workers will also have rights to reasonable notice of shifts and notice of changed or cancelled shifts, and these protections will extend to agency workers so that employers can’t simply avoid the regime by hiring through agencies.

This is due to come into force in 2027.

7) Fire and rehire: tighter boundaries

Fire and rehire hasn’t been banned outright, but the circumstances in which it can be used have narrowed considerably. Dismissals linked to changes to core terms such as pay, hours, pensions or shift patterns are far more likely to be automatically unfair. There are limited exceptions where a business is in serious financial difficulty, but the bar is high. The expectation is that employers are genuinely consulting, exploring alternatives and treating dismissal as a last resort, not a pressure tactic.

The restrictions are due to come into effect from October 2026.

8) A new Fair Work Agency

The Act creates a Fair Work Agency, bringing together enforcement of rights such as minimum wage, holiday pay and statutory sick pay. This shifts enforcement away from relying solely on individuals raising complaints and towards more proactive oversight. For employers, it increases the importance of compliance being embedded in everyday practice, not just fixed when an issue is raised.

Whilst the body is set to be created in April 2026, it is unclear when it will start enforcement. 

9) Expanded Duty around Harassment

The Bill strengthens protections against harassment at work. Employers will be expected to take all reasonable steps to prevent workplace sexual harassment, and they could be liable for harassment by third parties unless they can show they took all reasonable steps to prevent it. The detail is still subject to further clarification, but it’s a clear call for further active prevention and risk management rather than reactive fixes.

10) NDA's

The Bill introduces new provisions restricting the use of non-disclosure agreements that prevent workers from making allegations or disclosures about harassment or discrimination. These provisions aim to ensure that confidentiality clauses can’t be used to silence people raising serious issues.

11) Trade Unions and Collective Rights

The Act also strengthens trade union rights, including changes to industrial action thresholds and access rights. There is a significant new right for trade unions to access workplaces for recruitment and organising purposes. Amendments to the Bill clarified that this will include digital/virtual access. In addition there is a new duty on employers to inform workers of their right to join a trade union, with an obligation to make existing workers aware annually. It's anticipated that a template statement will be provided by the government for employers to use for this. A consultation on how this should all work in practice is ongoing and closes on 18th December 2025. 

Other areas include a reduced threshold for unions to secure statutory trade union recognition, removing the current threshold of 40% of all workers in the bargaining unit voting for recognition, seeing this being reduced to as low as 2% of the proposed bargaining unit. Also a package of reforms to strike action which will make it easier for unions to secure mandates for industrial action. This includes removing the 50% turnout threshold for strike action, reducing the notice period required from trade unions to employers for industrial action from 14 days. The Bill originally decreased this to 7 days, but it has settled on 10 days.

12) Tribunal Time Limits Extended

Time limits for bringing tribunal claims are set to increase from three months to six months for most employment tribunal claims. This offers a slightly longer window for resolution conversations but also means employers should keep records and evidence accessible for a longer period. 

What employers should be doing now

With some changes coming into force sooner than others, there is time to prepare but not ignore what's coming. Useful next steps include reviewing probation and dismissal processes, updating contracts, sickness and family leave policies, mapping where variable hours or shift work may be affected, and checking that consultation and change management approaches are fit for purpose.

At its core, this legislation pushes employers towards clearer decisions, better communication and fairer processes.  The difference now is that the consequences of getting it wrong arrive much earlier.

If you want help turning this into clear guidance for leadership, managers, or sense checking how this lands in your specific context, that’s exactly the kind of support we’re here for. Schedule in a chat with us using the link below.