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Employment Rights Bill 2025: Key Reforms, Latest Updates & Employer Actions

by Rebecca Naylor, HR Partner

Employment Rights Bill 2025: Key Reforms, Latest Updates & Employer Actions

The Employment Rights Bill 2025 continues to progress through Parliament, with significant amendments and discussions shaping the future of employment law in the UK. The latest updates from the House of Commons highlight major reforms aimed at enhancing worker protections and trade union rights. Employers must stay informed to ensure compliance and prepare for upcoming changes.

Latest Developments: What Was Discussed in Parliament?

On 4 March 2025, Parliament introduced several key amendments to the Employment Rights Bill, including:

  • Guaranteed hours for agency workers: Closing zero-hours contract loopholes, ensuring nearly 1 million agency workers receive contracts reflecting their actual hours worked.
  • Statutory sick pay for all workers: Extending entitlement to low earners.
  • Enhanced trade union rights: Reducing the strike notice period from two weeks to ten days and extending strike authorisation to one year.
  • Day-one protection against unfair dismissal: Removing the minimum service requirement for unfair dismissal claims, bolstering job security.
  • Ban on zero-hours contracts: Ensuring workers have more predictable and stable working arrangements.

While trade unions consider these reforms vital progress, business leaders express concerns about potential cost increases and operational challenges. The bill is scheduled for its final vote in the House of Commons next week, before heading to the House of Lords for further scrutiny.

Potential Reforms & Key Changes for 2025

Though most reforms are expected to take effect in 2026, some changes could be implemented as early as spring/summer 2025, including:

  • Immediate statutory sick pay reform: Removing the three-day waiting period.
  • Flexible working requests: Employers must provide a 'reasonable' justification for denying flexible working requests beyond existing statutory criteria.
  • Stronger employer duties on harassment: Employers will need to take 'all reasonable steps' to prevent workplace sexual harassment and will be held liable for third-party harassment.
  • Expansion of whistleblowing protections: Including sexual harassment allegations under 'public interest disclosure.'
  • Changes to redundancy rules: Removing the 'at one establishment' test for collective redundancy thresholds.
  • Regulation of tips and gratuities: Employers will need to consult trade unions on tip allocations, conduct reviews every three years, and publish anonymous worker feedback.
  • Protection against unfair dismissal: Dismissals for refusing contract variations will be unlawful.
  • Greater trade union rights: Employees will have the right to a statement of trade union rights and paid time off for trade union equality representatives.
  • Extended employment tribunal time limits: Increasing the claim window from three months to six months.
  • Union recognition and bargaining reforms: Revising statutory trade union recognition and repealing parts of the Trade Union Act 2016.

Additionally, regulations will strengthen oversight of agency worker, minimum wage compliance, and modern slavery laws while introducing new obligations for ship operators.

How Employers Should Prepare

At Your HR Partners, we recommend that employers prepare now to ensure a smooth transition. Key steps include:

  1. Review and update policies – Align contracts, policies, and procedures with upcoming changes, especially regarding flexible working, harassment prevention, redundancy rules, and sick pay.
  2. Train management teams – Equip line managers with training on the new obligations to ensure compliance.
  3. Engage with trade unions and employees – Foster dialogue on tips, working conditions, and dismissal-related matters.
  4. Monitor legislative updates – Some reforms will require further consultation and guidance, so staying informed is essential.
  5. Plan for financial and operational impact – Evaluate the cost implications and operational adjustments to meet new legal standards.

Join Our Employment Law Seminar

To support businesses in navigating these changes, Your HR Partners is hosting an employment law seminar with a free breakfast. We’ll cover these reforms in detail and discuss other legislative updates for 2025.

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