Employment

Joanne Leach
August 2025

Senior Associate Joanne Leach discusses key takeaways from the Employment Rights Bill, offering guidance for employers on how best to navigate upcoming changes, in FT Adviser.

Joanne’s article was published in FT Adviser, 5 August, and can be found here.

The Employment Rights Bill (ERB) represents one of the most comprehensive and transformative reforms of UK employment law in recent decades, bringing sweeping changes that touch on nearly every aspect of the employment relationship, from unfair dismissal rights and zero hours contracts to trade union access and statutory leave entitlements. It is therefore poised to reshape the employment landscape across all sectors.

The ERB is not a standalone initiative but a central component of the UK government’s broader Plan to Make Work Pay – a policy framework aimed at tackling low pay, poor working conditions, and job insecurity. As outlined in the government’s implementation roadmap, the ERB is designed to raise living standards, support economic growth, and create fairer opportunities across the labour market. By embedding stronger rights and protections into statute, the legislation seeks to ensure that work genuinely rewards effort and provides a stable foundation for individuals and families. It is positioned as both legal reform and a socioeconomic lever for long-term change.

For employers, the implementation of the ERB presents both a significant compliance challenge and a strategic opportunity to modernise workplace practices.

A phased but pressurised rollout

While the ERB was initially expected to receive Royal Assent before the summer recess, it is now likely to be finalised in the autumn session, with further changes still possible during the remaining Lords stages and Commons “ping-pong”.

The government’s roadmap outlines a phased implementation of the ERB, with limited measures relating to industrial action coming into force at the time of Royal Assent and most key measures following in April and October 2026. The most complex reforms, including day-one unfair dismissal rights and protections for workers on zero-hours contracts, are expected to be enacted in 2027.

While this staggered timeline offers a window for preparation, it should not be misconstrued as a reason to delay. The breadth and depth of the changes mean that employers must begin reviewing contracts, policies, and working practices now to ensure they are compliant when the new measures take effect.

The implementation burden: legal complexity and organisational readiness

The ERB’s reforms are far-reaching and will affect every employer, regardless of size or sector. Among the most demanding tasks businesses will need to undertake are:

  1. Contractual variation

Employers will need to revise employment and worker contracts to reflect new statutory rights. This may include changes to probationary periods, new sick pay entitlements which will kick in on the first day of sickness absence, and the introduction of predictable working patterns. For example, workers who regularly work consistent hours over a defined period may have the right to request a more predictable schedule with guaranteed hours. Employers must ensure that contracts are updated to reflect these rights and that any changes are communicated clearly to staff.

  1. Policy changes

Existing workplace policies will require significant updates. Anti-harassment policies will have to be strengthened to reflect new employer duties to take all reasonable steps to prevent harassment, including the harassment of employees by third parties. Redundancy procedures will need to be revised to ensure compliance with the new wider obligation to consult collectively and notify the government when a new company-wide threshold (to be defined in secondary legislation) is met, not just when 20 or more redundancies at a single establishment are proposed within a period of 90 days, as is currently required. Flexible working policies will have to be updated to reflect the ERB’s provisions, which include a requirement that  flexible working requests should be approved unless the employer can reasonably justify refusal on specified business grounds.

  1. Training and culture change

The ERB introduces a wide array of new statutory rights and procedural obligations. However, these reforms are not merely technical adjustments: they will require consistent interpretation and application across all parts of a business. Inconsistent implementation of new rights, such as mishandling flexible working requests or failing to consult properly on redundancies could expose employers to discrimination claims or tribunal proceedings. Line managers and HR professionals will therefore need comprehensive training to understand the new rules. Beyond compliance, fostering a culture of transparency and fairness will help employers position themselves as socially responsible in a competitive labour market.

  1. Administrative burden

The ERB introduces new administrative requirements that will increase HR workloads. For example, employers will find themselves having to track qualifying periods in relation to new rights and respond to requests for predictable hours within statutory timeframes. These tasks will require robust HR systems and processes to ensure compliance and avoid legal risks.

The extension of tribunal time limits: implications for risk management and administrative burdens

The proposal to extend tribunal limitation periods from three to six months under the Employment Rights Bill (ERB) will significantly increase the administrative burden on employers for several reasons:

  1. Longer document retention periods

Employers will have to maintain detailed records for a longer period – potentially up to nine months or more when factoring in Acas Early Conciliation and potential further extensions granted by tribunals. This means employers will need to extend document retention periods and ensure that all relevant communications, decisions, and performance records are preserved well beyond the previous three-month window.

  1. Increased volume and complexity of claims

Giving claimants more time to prepare and submit claims means that employees and their advisers are more likely to bring tribunal claims that might otherwise have lapsed due to time constraints. As a result, employers may face more frequent litigation and a higher volume of Data Subject Access Requests.

  1. Greater pressure on HR and legal teams

This higher volume of claims will lead to HR departments needing to track and manage potential claims over a longer horizon, increasing the workload associated with them. Employers will also need to strengthen internal grievance and appeal procedures to resolve issues early and reduce the likelihood of potential conflicts escalating to tribunal claims. This cultural and procedural shift requires training, policy updates, and consistent implementation across teams

  1. Strategic implications

The limitation extension alters the litigation landscape from a sprint to a marathon. This will require employers to pace their response strategies, allocate resources more sustainably, and remain vigilant over a much longer period of time. Businesses are likely to have to reassess HR budgets and increase insurance cover to account for the heightened risk relating to employment litigation.

Oversight and enforcement

The ERB introduces a more robust enforcement framework, anchored by the creation of the Fair Work Agency – a statutory body with investigatory and enforcement powers. The agency can investigate systemic non-compliance, respond to complaints, and bring tribunal claims on behalf of workers. The ERB also enhances the role of tribunals, giving them discretion to impose higher compensation and penalties.

Employers will also be subject to new record-keeping and reporting obligations, particularly in relation to working time and pay. These requirements are designed to support transparency and facilitate both internal audits and external scrutiny. Failure to comply risks civil penalties, reputational damage, and, in serious cases, criminal liability.

Taken together, these provisions signal a shift from reactive enforcement to a more proactive and preventative model. Employers will need to ensure that HR systems, line management practices, and internal grievance procedures are aligned with the new legal standards, not only to avoid sanctions but to demonstrate a genuine commitment to fair and lawful employment practices.

Key compliance risks and strategies for mitigation

Employers preparing for the implementation of the ERB must be alert to several potential challenges that could undermine compliance, increase legal risk and erode employees’ trust. However, each can be mitigated with proactive planning and clear communication.

  1. Underestimating lead time

Implementing many of the ERB’s reforms will require consultation with staff, particularly where changes affect existing terms and conditions of employment. Employers should begin internal reviews and consultations as early as possible to avoid a last-minute scramble. This includes engaging with employee representatives and trade unions where appropriate.

  1. Inconsistent implementation

Applying new rules unevenly across departments or locations can lead to claims of discrimination. Employers should develop centralised guidance and ensure that all managers receive consistent training. Regular audits and reviews can help identify and address inconsistencies.

  1. Neglecting agency and casual workers

The ERB extends protections to agency workers and those on atypical contracts, such as zero hours or gig economy workers. Employers must ensure that these groups are included in compliance planning and that their rights are respected. This may involve reviewing contracts with staffing agencies and updating onboarding processes.

  1. Failing to engage with consultation

The Government has committed to further consultations throughout autumn and winter 2025 to refine the ERB’s implementation. Employers should consider actively engaging with these consultations to help shape practical guidance and raise sector-specific concerns. Participation can also provide early insights into forthcoming changes and help businesses stay ahead of the curve.

Strategic opportunities for employers

While the ERB introduces new obligations, it also presents opportunities for forward-thinking employers:

  1. Improved retention

Enhanced rights and greater predictability in working patterns can lead to improved employee satisfaction and reduced turnover. This is particularly valuable in sectors that rely heavily on casual or part-time labour, such as hospitality and retail. By offering more stable and supportive working conditions, employers can build a more loyal and engaged workforce.

  1. Competitive advantage

Employers who adopt best practices early will be better positioned to attract top talent and avoid reputational risks. Demonstrating a commitment to employee rights and wellbeing can enhance an employer’s brand and make it a more attractive place to work. This is especially important in a competitive labour market where candidates are increasingly prioritising workplace culture and values.

  1. Legal certainty

The ERB aims to provide clearer rules and definitions, particularly in areas such as working time, redundancy, and dismissal. This can reduce ambiguity and the risk of litigation. Employers who invest in understanding and implementing the new rules will benefit from greater legal certainty and face fewer disputes.

  1. Enhanced employee engagement

By involving employees in the implementation process and responding constructively to their concerns, employers can foster a more inclusive and collaborative workplace culture. This can lead to higher levels of engagement, productivity, and innovation.

Conclusion

The Employment Rights Bill marks a significant shift in UK employment law, with implications for every employer. While the reforms present challenges, they also offer a chance to modernize workplace culture and practices and build a more resilient and engaged workforce. By taking proactive steps now, employers can ensure they are ready for the changes ahead and position themselves for long-term success. Employers who act early, invest in training, and engage constructively with the reforms will be best placed to thrive in the new legal landscape.