What the Employment Rights Bill means for responsible business

In March of this year, we gave some insight on the upcoming changes introduced by the Employment Rights Bill (ERB). The ERB represents the most significant overhaul of UK employment law in over a generation. With more than thirty proposed reforms, aiming to enhance job security, modernise workplace protections, and promote fair treatment across all sectors, it is prudent for employers to consider the impact of the proposed changes on their respective organisations.

This is an area we are monitoring closely, as the Government continues to implement changes, as reflected in some of our recent blogs.

Key legislative reforms

The ERB introduces significant reforms aimed at improving the work environment and how employers build their current and future workforce. For example:

• Employers will be required to take “all reasonable steps” to prevent sexual harassment. Employers will also be liable for harassment of their employees by third parties if they fail to take all reasonable steps to prevent it. This marks a shift towards a more proactive approach to workplace safety than previously seen.
• Additionally, the removal of the two-year qualifying period for unfair dismissal claims, and the introduction of a simplified dismissal process during probationary periods for certain types of dismissal, alter the conditions governing job security and dismissal procedures from the outset.
• Harassment reforms are expected to be implemented by October 2026, while the right to unfair dismissal protection from day one is anticipated in 2027.

From a social impact perspective, the ERB enhances family leave policies and statutory sick pay. For example:  

• Paternity and unpaid parental leave will become day one rights, and bereavement leave will become a general right, including for employees who experience pregnancy loss before 24 weeks, by April 2026.
• The reforms will also remove the lower earnings limit and three-day waiting period for statutory sick pay. Furthermore, workers on low or zero-hours contracts (including agency workers) who regularly work more than their contractual hours will gain the right to request a predictable working pattern after 12 weeks of employment, aiming to reduce unpredictable scheduling, with these changes expected in 2027.

In terms of governance and compliance, the ERB:

• Introduces a ban on “fire and rehire” practices, making it automatically unfair to dismiss employees for refusing a “restricted variation” (ie a change to an employee’s contract that changes terms relating to pay, pensions, working hours and time off) unless absolutely essential for business continuity.
• Strengthens collective consultation requirements and increases protective awards, with implementation expected by October 2026.

A new enforcement body, the Fair Work Agency, is expected to launch in April 2026 to oversee compliance with minimum wage, holiday pay, and modern slavery laws.

Employer considerations

The ERB presents both challenges and opportunities for employers. While the expansion of day-one rights and the overhaul of statutory entitlements may increase compliance obligations and workforce costs, these reforms are presented by the Government as a strategic opportunity to build more inclusive, transparent, and resilient workplaces and workforces. For example, the enhanced sick pay provisions are designed to support wellbeing and work-life balance, whilst the stronger harassment and whistleblower protections have the aim of fostering a culture of trust and accountability within the workplace.

Employers who begin preparing for these reforms now may be better positioned to adapt smoothly as changes take effect. While aligning proactively with the reforms could support employee engagement, retention, and organisational reputation, it also requires careful planning and resource allocation.   In the context of growing responsible business practices – embedding principles such as fairness, flexibility, and accountability into employment practices can help demonstrate a commitment to responsible business conduct.

Moreover, these changes provide an opportunity for employers to review internal policies and governance structures. Updating HR policies to reflect the latest statutory entitlements and protections will be an important (and likely first) step taken by employers. Investing in leadership training will help employers implement these changes consistently and support a culture of accountability.

Conclusion

The ERB brings both legal change and significant cultural change to the current employment landscape in the UK.  While the phased implementation gives employers time to adapt, the breadth and depth of the reforms demand more than just technical compliance – it is also a chance for employers to reflect on workplace culture and practices. Forward-thinking employers will recognise this moment as an opportunity to embed fairness and sustainability into their employment practices. By aligning with the ERB’s principles – such as day-one rights, predictable working patterns, and enhanced protections – organisations can work to foster more inclusive and engaged workforces. Acting early may also help organisations to stay competitive in a rapidly evolving employment market.

Many thanks to solicitor apprentice Keeley Barnes for their help in writing this article.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2025