The Employment Rights Bill, set to come into force in early 2026, introduces some of the most significant workplace reforms in recent history, reshaping employer responsibilities and workplace policies. These changes are leading to an evolution that will redefine the employment relationship, requiring businesses to adapt to a new landscape.
Emma-Claire Kavanagh, Managing Director in BIE’s People and Culture Practice, spoke with James Major, Partner at Clyde & Co, as he gave his views on the current and future reforms under the Employment Rights Bill and their impact on organisations.
Having specialised in employment law for nearly 25 years, James describes these changes as ‘unquestionably the biggest’ of his career. From restructuring and redundancies to workplace culture, equality and mental health, the changes will have a far-reaching impact.
While the final details will be determined following consultation and the publication of supporting regulations, organisations must stay engaged, monitor developments, and take proactive steps to prepare. Below we outline the changes across four areas: Restructuring and redundancies, culture and workplace behaviour, ED&I and wellbeing and mental health.
The Employment Rights Bill introduces significant changes that will impact redundancies and restructuring processes. One of the most notable changes is the introduction of unfair dismissal protection from day one of employment. Employees currently require two years of continuous service to claim unfair dismissal, but under the new bill, this right will be available from day 1 of employment.
However, a statutory probation period, likely to be up to nine months, is expected to offer some level of flexibility for employers. Dismissals that occur within this period, provided a lighter touch process is followed, may not be subject to unfair dismissal claims.
Another major change is the abolition of ‘fire and rehire’ practices. Previously used as a last resort by businesses to, for example, enforce contractual changes, this practice will be deemed automatically unfair under the current proposals. There will be a limited exception where business viability is at risk, but this will likely be narrowly interpreted. To prepare for this shift, employers may want to review and update contracts to ensure they maximise the scope to make changes to the contract without requiring consent.
Changes to collective consultation rules are also expected to have a significant impact. Currently, collective consultation is required when 20 or more redundancies occur at a single establishment. Under the new bill, this threshold will apply across all UK sites within a legal entity, potentially increasing the number of businesses subject to these obligations and significantly increasing the occasions on which collective consultation obligations are triggered. Employers will need to maintain detailed redundancy logs to track dismissals over a 90-day period and ensure compliance. Implementing a redundancy tracking system will help monitor dismissal numbers across multiple sites and prevent unintended breaches of consultation requirements.
Furthermore, as the likelihood of tribunal claims increases due to reduced qualifying periods for unfair dismissal, businesses should ensure thorough documentation of dismissal and redundancy decisions to mitigate legal risks. Training HR teams and managers on the new legal framework and redundancy procedures will also be critical in navigating these changes effectively.
Workplace culture and behaviour are under increasing scrutiny, with legislative changes reinforcing employer responsibilities. The duty to prevent sexual harassment, introduced in October 2024, will be strengthened further. Under the current proposals, employers will be required to take ‘all reasonable steps’ (not just ‘reasonable steps’) to prevent sexual harassment, further strengthening the duty on employers. Additionally, third-party harassment protections will be introduced covering all protected characteristics under the Equality Act, meaning employers will have to take ‘all reasonable steps’ to prevent any harassment by clients, suppliers, and other external parties. To comply, businesses should undertake risk assessments, implement proactive measures, and provide comprehensive training to ensure a safe and respectful workplace.
It was thought likely the Government would introduce a right to disconnect, a policy already in place in countries like France and Ireland. A UK-specific code of practice was expected in 2025, but recent indications from the Government suggest this proposal may be about to be ditched.
Flexible working rights are also to be strengthened. The bill proposes that flexible working should be the default unless employers have a clear, justifiable reason to deny it. Whilst only a change in nuance from the current position, it may lead to an increase in the number of formal requests, particularly in response to employers seeking to mandate more office-based working, and employees may feel more empowered to challenge the outcome if it doesn’t go their way. Employers will need to be prepared for a shift towards a greater expectation of work flexibility and adapt their internal policies and processes accordingly.
The new bill expands on existing ED&I initiatives, particularly in the areas of pay gap reporting and family-friendly rights. Gender pay gap reporting requirements will be extended to include race and disability pay gap reporting under the new proposals. Employers with 250 or more employees will also be required to create and publish action plans detailing measures taken to reduce gender pay disparities.
To prepare for these changes, employers should start reviewing their diversity data collection processes. Ensuring accurate and comprehensive data on race, disability, and other protected characteristics will be crucial for compliance with new reporting requirements. Employers should update their privacy notices and encourage employees to disclose relevant demographic data to improve reporting accuracy.
Employers might also wish to consider conducting internal pay audits to identify any potential disparities on the basis of race and disability so they can develop strategies to address inequalities before the proposed new measures take effect.
Additionally, an enforcement unit, similar to the one used for National Minimum Wage compliance, is expected to be introduced to oversee adherence to equal pay legislation. Organisations should proactively review their pay structures and ensure transparency in how salaries and bonuses are determined to avoid potential penalties.
Family-friendly rights will also be strengthened, with day-one entitlement to paternity leave, unpaid parental leave, and unpaid bereavement leave. Protection from dismissal following maternity and other family leaves will be extended to six months post-return, increasing job security for parents. Employers should review their family leave policies and ensure managers are trained to support employees taking family-related leave.
Menopause policies will also become mandatory for employers with over 250 employees under the current proposals in the Bill. Businesses will need to implement workplace adjustments, training, and policies to support employees experiencing the menopause, reflecting the increasing recognition of its impact on working life. Developing an action plan and providing resources for affected employees will be essential for compliance.
A key area of focus for the Government and employers alike is the implementation of strategies to manage employee wellbeing and sickness absence, especially mental health absences. Many businesses are already introducing mental health first aiders, employee assistance programs (EAPs), and wellness initiatives, but we are likely to see more change through 2025 and beyond.
The ‘Get Britain Working’ white paper published in 2024 outlined various initiatives to address long-term sickness absence, but many employers are still struggling to manage increasing cases of anxiety, depression, and other mental health conditions in the workplace. Training for managers on identifying and supporting employees with mental health challenges is expected to become an essential component of workplace policies.
Additionally, workplace adjustments for neurodivergent employees are receiving increased attention. Employers are encouraged to take steps to better accommodate neurodiversity, ensuring that working environments are inclusive and accessible.
Overall, the changes within the Employment Rights Bill signal a major shift towards a more employee-centric approach. Businesses must proactively prepare for these reforms by reviewing their policies, ensuring compliance, and fostering inclusive workplace cultures. With the changes in the Bill expected to come into force from early 2026 onwards, early preparation will be key to successfully navigating this evolving employment landscape. You must ensure that your organisation’s teams and leadership have the capabilities and knowledge to manage these changes effectively; to stay ahead of the curve.
