The Employment Rights Bill (ERB) is a key part of the Labour government’s implementation of its manifesto pledges.
So, you know that changes are coming. But what are those changes? what do you need to do? and when?
Well, nothing is actually set in stone yet, although the government has set out its “roadmap”.
In this article, we aim to keep you up to date with the main elements of what is currently expected to change, and when, and what you might need to do.
October 2025
Okay, so this isn’t actually part of the ERB, but there’s a small change you need to be aware of anyway.
This change relates to NDAs (non-disclosure agreements), in whatever form they come, and it prohibits any attempt to prevent relevant disclosures to an appropriate person for an appropriate purpose by potential victims of crime.
What that actually includes probably doesn’t need delving into right now. So why does it matter?
Well, it could impact on the enforceability of confidentiality terms contained in settlement agreements, employment contracts and employment policies, as well as standalone confidentiality agreements or NDAs. Your confidentiality terms, which are intended to protect confidential business information, could be rendered effectively void unless they carve out this exception for victims of crime.
What do you need to do? From October 2025, make sure that any new contracts or agreements containing any confidentiality obligations, include an appropriate carve-out relating to potential victims of crime. That way you can continue to safely benefit from the commercial confidentiality you need. Easy.
Sometime between now and April 2026
As soon as the ERB receives royal ascent (becomes law), it is intended that a number of measures will take effect almost immediately. These mostly relate to repealing the changes that the previous Conservative government made in relation to controlling or limiting the impact of trade unions and industrial action. They also include an intention to simplify the industrial action ballot process, plus additional protections for employees engaging in industrial action.
These changes will only really affect employers who recognise a trade union for collective bargaining purposes. And most businesses don’t face the threat of industrial action regularly even if they do recognise a trade union.
So, although your business might feel the effects of these particular changes over time, there isn’t anything that you need to do to prepare for them in advance.
April 2026
Changes to statutory sick pay may see you paying more sick pay, to more people. Both the lower earnings limit and the waiting period are being removed. Update your sick pay policy if you need to, and make sure your payroll team are ready for this change.
Similarly, paternity leave and unpaid parental leave rights and entitlements will apply from ‘Day 1’ of employment, for any new (or recently engaged) employees. Update your family leave policies and make sure that anyone who might need to know, knows about this change. In reality, most managers don’t remember how long it is after starting a new job that employees gain these entitlements. So, you’re probably only dealing with this change reactively as and when you receive a paternity leave or unpaid parental leave request. But do check your policies.
Whistleblowing protections will be strengthened to specifically include disclosures related to sexual harassment. It’s difficult to see what practical impact this will have, because the relevant disclosures would probably have been viewed as protected whistleblowing disclosures anyway.
Penalties for getting collective redundancy consultations wrong will be increased by doubling the maximum protective award. The process and rules will stay the same at this stage, but changes do come later.
A “Fair Work Agency” body will be established. The trade union recognition process will be simplified. And electronic and workplace balloting will be introduced. These are unlikely to require any proactive steps from businesses.
October 2026
Employers will be required to take “all reasonable steps” to prevent sexual harassment of their employees, and an obligation on employers not to permit the harassment of their employees by third parties will be introduced. Policies will need to be updated, and training will be required for all employees and managers, and that will all need to be done before the implementation of this change. We are expecting further regulations to specify what steps employers should take, and the changes to policies and training will depend in part on what those regulations and steps require.
A duty to inform workers of their right to join a trade union will be introduced. Details of form and content, or whether it can be included within an employment contract, are yet to be shared. Once we know what needs to be said, businesses will need to act by issuing such a statement to all workers.
Changes will be made (tightening up) in relation to policies regarding the allocation of tips. If this is relevant to your business, it would be prudent to review your current policy and put in place a relevant review schedule in advance of these changes.
It will become automatically unfair to dismiss an employee for failing to agree to a variation of their contract of employment (“Fire and Rehire”), unless that variation was to avoid the effects of serious financial difficulties affecting the employer’s ability to carry on their business and the variation could not be reasonably avoided. Basically, this will now only be available in very limited circumstances.
The starting point for various employment tribunal time limits will be extended from 3 months to 6 months.
The “two-tier code” will be reinstated, which seeks to prevent the emergence of a two-tier workforce, where private sector employees working on an outsourced public sector service contract have worse terms and conditions than those employees who were transferred to work on it from the public sector. If your business includes public sector contracts in an area where some of your employees work alongside or perform similar roles to transferred public sector employees, then this could impact upon you. You should review your existing public sector contracts and keep this in mind for new public sector contracts, particularly in respect of who may bear responsibility for any increased costs associated with levelling up or equalising the benefits packages of your employees. You should be mindful that the application of the TUPE regulations and the new “Fire and Rehire” rules will mean that levelling down is unlikely to be an option.
New rights and protections are to be introduced for trade union representatives. Protections against detriments for taking industrial action will be extended. Trade unions’ right of access will be strengthened. As with other changes to the trade union and industrial action landscape, these are mostly likely to only require reactive responses, even if you do already recognise a trade union for collective bargaining. If anything, trade union officials are likely to approach you about any changes they would like to see being made.
The establishment of the “Fair Pay Agreement Adult Social Care Negotiating Body” and a process for “Fair Pay Agreements” for the adult social care sector in England, and for both adult and children’s social care workers in Scotland and Wales, following engagement with the sector. If your business operates in a relevant sector, then you can expect this to effect you in the future, but there is nothing you need to do at this stage.
Sometime in 2027
This is one of the big ones, and possibly the most contentious. The government intends to remove the qualifying period for the right to claim unfair dismissal (which is currently 2 years and had previously been 1 year and 6 months). The effect of this would be to give all employees protection from unfair dismissal as a ‘Day 1’ right. There is much to be ironed out in relation to how statutory probationary periods might be used, or if the qualifying period should be reduced rather than removed, but this will be a big change either way. Contracts may need to be updated to comply with the new probationary period requirements, and managers will need educating about this change so that they don’t fall foul of the new regime.
Another of the big changes is the introduction of a new regime aimed at “ending the exploitative use of zero hours contracts” and applying the same measures to agency workers. It is important to remember that “zero” hours contracts will include low hours contracts. Changes will include forcing employers to offer guaranteed hours that reflect the average number of hours actually worked, providing reasonable notice of shifts, and providing reasonable notice of cancellation of shifts. This will be a big change, and an administrative headache, for businesses that use zero hours contracts (or similar). Businesses should think very carefully about whether it is appropriate to continue their zero hours arrangements in relation to each worker and probably move away from them where they reasonably can. Much like the situation with the IR35 regime, this is likely to negatively impact on the flexibility of some arrangements that would benefit both employer and worker; but the cost, risk and inconvenience to the business is likely to override other considerations.
If you are a large multi-site or multi-division or group of businesses, this could be another big one. A new threshold for collective consultation in a collective redundancy situation is going to be introduced where redundancies are proposed at more than one establishment across an employer’s whole organisation (within a 90-day period). This threshold will also apply to the obligation to notify the secretary of state of the proposed redundancies. In cases where redundancies are proposed at only one establishment, the threshold for collective consultation will remain unchanged at “20 or more”. Although we don’t know what the new multi-establishment threshold number will be yet, this will place an additional obligation and burden on multi-establishment organisations to centrally track the numbers of redundancies that might be proposed across the whole organisation in any 90-day period. Even a single redundancy at one site may need to be included in a collective consultation process if the threshold number is exceeded due to proposed redundancies elsewhere. Quite a headache. Multi-establishment organisations should start thinking about what practical arrangements they can put in place to track and manage this on an organisation-wide basis, regardless of what the threshold number turns out to be.
Pregnant workers will be given enhanced protection against dismissal or redundancy.
Changes will be made to the right to request flexible working, including limiting the grounds on which flexible working requests can be refused.
Extension of the entitlement for employees to take bereavement leave.
Introduction of a power to enable regulations to specify steps that are to be regarded as “reasonable”, to determine whether an employer has taken all reasonable steps to prevent sexual harassment, layering onto the changes expected in October 2026.
Introducing a new obligation on larger employers (250 or more employees, or public authorities) to publish an equality action plan showing the steps that they are taking with regard to matters related to gender equality (including menopause), and to publish prescribed information. We are waiting on the necessary regulations to specify what is actually required. This will apparently have also been introduced on a voluntary basis in April 2026.
Further changes to the industrial relations framework, and extension of the prohibition against trade union blacklists.
Enabling further regulation of umbrella companies (employment businesses) that supply workers to work for other people or organisations.
Summary
There’s quite a lot in there, and those are only the main changes that will affect most businesses. Not all of the changes will impact on every business. There are some other changes that will affect specific sectors or niche working arrangements (like Seafarers), which we haven’t covered here.
The most important thing is to be broadly aware of what changes might be on the horizon, be mindful of which ones might affect your business, and then start planning for them well enough in advance to be prepared for the actual changes when we know for sure what they are.
(The content of this article is not intended to be legal advice)