Employment Rights Bill – Royal Assent Confirmed

After months of parliamentary scrutiny, the Employment Rights Bill has now received Royal Assent, formally confirming it as law. This marks a significant milestone in the Government’s plan of employment law reform and provides greater certainty on the direction and scale of the changes ahead.

The reforms reflect a clear shift in approach, bringing together measures aimed at strengthening worker protections across several familiar pressure points for employers. The Employment Rights Act 2025 addresses issues such as dismissal processes, fire and rehire, harassment prevention and flexible working. Although much of the practical detail will be set out in future regulations and guidance, Royal Assent gives employers the certainty required to begin reviewing policies, assessing risk and planning for change.

Below is an overview of the key reforms introduced by the Employment Rights Act 2025.

Key reforms

Unfair dismissal

• The qualifying period for ordinary unfair dismissal claims will be reduced from two years to six months.
• The statutory cap on unfair dismissal compensation will be removed.

Fire and rehire

• The Act strengthens protections around dismissal and re-engagement. This now means that employers will face tighter restrictions where dismissal is used to force through certain contractual changes such as pay, pension, hours of work and holiday entitlement.

Zero hours

• New safeguards for workers on zero-hour and low-hour contracts, including a right to be offered a contract reflecting regular hours worked.

Family-related leave and protections

• Strengthened protections against dismissal during pregnancy, maternity, adoption or shared parental leave or within six months of returning to work.
• New right to bereavement leave.
• Paternity leave and unpaid parental leave will become a day-one right.

Collective redundancies

• Expanding the collective redundancy consultation requirements and protective rules (increasing employer obligations in larger-scale workforce reductions).

Statutory sick pay

• Statutory sick pay to be available for all workers from day one.

Harassment

• Strengthening of the duty to take reasonable steps to prevent sexual harassment at work – taking “all” reasonable steps. Regulations will specify what steps employers should be taking.
• Introducing protection from third-party harassment - employers will be liable for harassment by third parties, such as suppliers and clients, unless all reasonable steps are taken to prevent it.

Flexible working

• Specified business grounds can still be relied on, but there will be a new requirement for any refusal to be ‘reasonable’.

Implementation and timing

Most reforms will not take effect immediately. The Government has confirmed that changes will be introduced on a phased basis, with many key provisions expected to come into force during 2026-2027, following consultation and the publication of detailed secondary legislation. Notably, it is proposed that the changes to the qualifying period for unfair dismissal claims will take effect retrospectively from 1 January 2027, meaning that in practice, they will apply to dismissals where employees are recruited next year.

Royal assent nonetheless confirms that these changes will proceed, allowing employers to plan ahead with more confidence.

Practical next steps for employers

Employers should begin to:

• Review contracts and working arrangements, particularly for zero-hour and casual workers.
• Reassess probation, dismissal and performance management processes.
• Consider the cost and policy impact of expanded statutory sick pay.
• Plan ahead for more onerous collective redundancy consultation requirements.
• Prepare HR teams and managers through early training and guidance.

How we can help

We are closely monitoring developments and will continue to provide updates as further detail emerges.

If you require any support with contract and policy reviews, workforce planning, training and tailored advice on managing risk as the new framework is implement, please do get in touch.

Contact our legal experts