Employment Eye – September 2025

Employment Rights Bill: the final countdown

The Employment Rights Bill (the Bill), published on 10 October 2024, sets out a comprehensive package of employment law reforms aimed at enhancing worker’s rights and protections. Over the past year, the Bill has undergone significant changes as it has progressed through Parliament, with amendments being shaped by  public consultations and parliamentary debate. 

The Bill completed its report stage in the House of Lords just before Parliament’s summer recess in July 2025. During the report stage, where the Government does not have the majority, the Lords passed a number of unexpected non-Government backed amendments, with many of the amendments being criticised as diluting key provisions of the original Bill. 

On 15 September 2025, the Bill returned to the House of Commons, where the Government holds the majority. All of the Lords’ amendments were rejected by the Commons. 

This article summarises ten of the Bill’s proposals that were amended during its passage through Parliament  (including some of those House of Lords amendments). We have also provided a brief overview of when the Government expects these provisions to take effect. Further details can be obtained from the Government’s implementation roadmap.

1.    Unfair Dismissal – day one right

Bill: Employees will have the right not to be unfairly dismissed from day one (the current two-year qualify period will be abolished). There will be a “light touch” process that will allow employers to dismiss during the “initial period” of employment (expected to be 9 months). There will be no right to claim unfair dismissal if the employee has not started work (unless the dismissal relates to a reason that is automatically unfair, a political opinion or affiliation or a spent conviction).   

Amendment: This proposal was criticised in the House of Lords, particularly due to concerns for small business without HR support. Peers also stated that employers must be able to assess the suitability for a role without the threat of an unfair dismissal claim. The Lords passed a non-Government backed amendment to retain the qualifying period, but reducing its length from two years to six months. The Lords also supported another non-Government amendment that would allow employees to be accompanied at disciplinary and grievance hearings by a “certified professional companion”. 

The Government rejected both amendments, maintaining that it is appropriate for unfair dismissal protection to apply from the beginning of employment. Regarding accompaniment, the Government stated that requiring employers to permit workers to be accompanied at disciplinary and grievance hearings by persons other than trade union officials or other workers would likely lead to increase in the cost, complexity and length of such hearings. 

When? The new unfair dismissal provisions are likely to take effect in 2027, following Government consultation (expected autumn 2025). We also await publication of the regulations which will set out further details (including details of the light touch process).  

2.    The Fair Work Agency

Bill: There will be a new public authority, “The Fair Work Agency” (FWA). The FWA will harness existing Government enforcement functions (for example, enforcement functions of HMRC relating to national minimum wage) together with new enforcement responsibilities over holiday pay. It will also possess a range of enforcement powers, including powers to: 

• Require employers to attend interviews and provide information.
• Enter premises. 
• Provide labour force undertakings (undertakings for compliance where there have been a failing, such as a failing to keep the required records).  

Amendment: The Government subsequently amended the Bill to strengthen the FWA’s powers by including additional powers to: 

• Enforce failures to pay statutory payments (e.g holiday pay).
• Enforce the requirement for employers to keep adequate records relating to holidays and pay.
• Issue penalties for underpayments.
• Bring Employment Tribunal proceedings on behalf of workers.
• Recover enforcement costs and provide legal assistance to both employers and employees.

When? The FWA is likely to be established in April 2026. The Government has said that it will publish guidance on how the FWA will exercise its powers in practice, but there are no dates for when the enforcement powers are likely to come into force.

3.    Employment Tribunal Time Limits

Bill: Despite various comments about Employment Tribunal time limits, when published, the Bill did not refer to them.

Amendment: The Government later amended the Bill to extend the current time limit from three to six months. Currently, most Employment Tribunal claims need to be brought within three months of the act complained of (e.g. for unfair dismissal, it would be 3 months from the date of the dismissal). 

When? The new time limits will take effect in October 2026. The Government has said that it would reflect on the suggestion to extend the Acas early conciliation period.

4.    Fire and Re-hire 

Bill: The Bill restricts an employer’s ability to use fire and re-hire practices. It stated that a dismissal would be automatically unfair where the reason (or the principal reason) for the dismissal was that:

• an employer sought to vary an employee’s contractual terms, and the employee did not agree; or
• the employer employed someone else, or re-engaged the employee in question, under varied contractual terms to carry out the same (or substantially the same) duties, the dismissal would be automatically unfair. 

There is an exception if the employer can show that they were facing “financial difficulties” affecting their ability to carry on the business as a going concern.

Amendment: The Government later revised its approach by introducing the concept of “restricted variations”. Under this revised framework, a dismissal will only be considered automatically unfair if the employer attempts to implement a “restricted variation” (such as changes to pay and performance, holidays and working time) and the employee does not agree. Variations allowing employers to unilaterally make contractual changes without employee agreement will also be classed as “restricted variations”.  A dismissal will not be automatically unfair if the proposed contractual variation is not “restricted variation”. 

The financial difficulty exception was also amended for public sector bodies that do not operate on a going concern basis, please see our In the Spotlight article for further details.

When? These changes will take effect from October 2026. The Government has said  that it intends to consult on fire and rehire in autumn 2025.

 5.    Collective Redundancies

Bill: Employers proposing to dismiss (as redundant) 20 or more employees “at one establishment” within a 90 day period must comply with collective consultation obligations. The Bill removed reference to “one establishment”, meaning that employers would be required to collectively consult where there are 20 or more redundancies proposed across the organisation as a whole. 

Amendment: The Government revised its approach and reinstated the “one establishment” threshold (collective consultation will apply if there are 20 or more redundancies at one establishment). However, it introduced an additional threshold by stating that collective consultation will apply where another “threshold number of employees”  is met (with the number to be defined in the regulations). However, employers will not be required to consult all employee representatives together or try to reach the same agreement with all of them. The Government also increased the maximum protective award for failure to collectively consult from 90 days’ pay to 180 days’ pay. 

When? The threshold provisions will come into force in 2027, with the consultation beginning in 2025/2026. The new protective award provisions will apply from April 2026.

6.    Zero/Guaranteed Hours Contracts

Bill: The Government has said that it is committed to banning exploitative zero hours contracts to ensure that  workers have the right to a contract that reflects the number of hours they regularly work. The Bill introduced the right to receive guaranteed hours. Employers will be required to offer guaranteed hours to qualifying workers at the end of each reference period (expected to be 12 weeks). The hours offered must reflect the hours worked during the reference period, but there will be exceptions to address short-term/fluctuating needs. A qualifying worker also includes someone that has a low number of guaranteed hours. 

Amendment: Following consultation, the Government extended these provisions to include agency workers. Under the revised approach, the end hirer would be responsible for making any guaranteed hours offer. The pay offered must be no less favourable than the agency terms they’d been working under or of the terms of comparable workers. Recourse to the Employment Tribunal will be permitted where the employer has manipulated work patterns to avoid the application of these provisions. 

The House of Lords passed a non-Government backed amendment replacing the employer obligation to offer guaranteed hours with a right to request guaranteed hours (which would have to be granted if requested). However, the Government rejected the Lords’ amendment, stating that workers who meet the qualifying criteria should receive a guaranteed hours offer without having to make a request for one.

When? Consultation is expected in autumn 2025 and these measures are expected to take effect in 2027.

7.    Reasonable Notice re Shift Work

Bill: The Bill introduced the right to receive reasonable notice of shifts, including changes to or cancelled shifts.  Compensation will be available for cancelled, moved or curtailed “qualifying shifts.” The definition of a “qualifying shift” extends to shifts that workers are required to work, requested to work or they have suggested working (and the employer has agreed). 

Amendment: A Government amendment provides that compensation will only be payable where the worker reasonably believed that they would be needed to work the shift. The House of Lords passed a non-Government backed amendment defining “short notice” as cancellations less than 48 hours before a shift is due to start. 

The Government rejected the Lords’ proposed definition of “short notice”, stating that it would pre-empt consultation and limit the Government’s discretion. 

When? Consultation is expected in autumn 2025 and the measures are likely to take effect from 2027.

8.    Industrial Relations and Trade Union Rights 

Bill: There were an array of reforms relating to trade union rights and industrial relations, as the Government has said that it wants to modernise the framework and improve transparency. For example:

• There will be a requirement for employers to explicitly notify employees of their right to join a trade union.
• Trade union officials will have wider rights of access to workplaces for recruitment, organising and collective bargaining (subject to a statutory process).
• Trade unions will be able to apply to the Central Arbitration Committee (CAC) to order access.  
• The recognition process will be simplified, reducing the minimum membership threshold to 2% (currently 10%) and removing the 40% support and 50% turnout thresholds.
• There will be protections from detriment on grounds of industrial action and increased protection from dismissal when participating in protected industrial action. 

Amendment: The Government has made various amendments, including:

• Extending the current CAC’s Code of Practice on access and unfair practices during recognition and derecognition ballots to cover the entire recognition process.
• The right of access will also include digital and virtual access.
• The information required in ballot notices for industrial action will be reduced. 
• The union’s mandate for industrial action will remain valid for 12 months rather than six.
• Reducing  the notice period for industrial action from 14 days to 10.
• Penalties for employers that fail to comply with access rights. 

For further details please see our previous article. 

The House of Lords later passed a non-Government back amendment to retain the 50% turnout threshold for ballots for industrial action. However, this amendment has been rejected by the Government in the House of Commons because it considers it appropriate to remove the provision that industrial action is regarded as having the support of a ballot only if at least 50% of those eligible to vote in the ballot did so. 

When? The provisions are expected to take effect in October 2026, following consultation likely to begin in autumn 2025. 

9.    Non-disclosure Agreements (NDA) – confidentiality clauses

Bill: There were no provisions in the initial draft.

Amendment: The Government amended the Bill to add in new NDA provisions. Essentially, NDAs will be void if they attempt to prevent a worker from disclosing details about harassment or discrimination, including disclosures about the employer’s response to allegations. The Government has said that this will not impact on the "legitimate use of NDAs" (for example, to protect intellectual property). 

When? Unknown at this stage. Although the Government has indicated that it will be “moving as fast as possible” to consult and enforce these provisions. The forthcoming regulations will identify the individuals to whom measures will apply and the conditions excepted (for example, where a victim requests an NDA, they will still be able to speak certain professionals about the alleged harassment).

10.    Bereavement Leave

Bill: The Bill introduced a general right to bereavement leave. The right to two weeks' parental bereavement leave following the death of a child under 18 or a stillbirth will be extended so that it applies to the loss of a wider group of people. This leave will also be a day-one right.

Amendment: The Government later amended the right so that it will include employees who suffer pregnancy loss before 24 weeks. This includes losses resulting from miscarriage, ectopic pregnancy, and unsuccessful embryo transfer during IVF treatment.

When? This is likely to come into force in 2027. The Government is expected to commence consultation in autumn 2025.

What happens next?

The Bill may now go back and forth between the Lords and the Commons (known as “ping-pong”) until the final version of the Bill is agreed, but it is highly likely that the Lords will give way to the Commons due to an established convention known as the Salisbury Doctrine. The convention ensures that the Lords will not block major Government Bills (that have been mentioned in an election manifesto). Once the Houses reach agreement, the Bill is ready to receive Royal Assent (this is when it becomes law), which is expected in October 2025.  

Employers are encouraged to start preparing for these changes (and this article does not cover all of them!), particularly where contracts, policies and working practices are concerned. Some employers may need to think about HR and admin resources to ensure there is sufficient support available to implement the changes and carry-out necessary training. Here at Bevan Brittan we have teams of sector specialists that are able to work with you and your organisation to ensure that you have an effective planning strategy, practical guidance and the support you need to ensure compliance once the provisions take effect.

Employment law 2025 – keeping you and your organisation up to date

There have been a number of non-Employment Rights Bill notable developments since July’s edition of Employment Eye - below is a short recap on some of the key developments.

• 9 July 2025 – Marshall v McPherson Ltd: The EAT confirmed that the ‘last straw’ prompting the claimant’s resignation did not, by itself, need to be a serious breach of contract. The ET had therefore failed to consider whether all of the acts complained of had cumulatively constituted a fundamental breach of the implied term of trust and confidence.
• 21 July 2025 – The Department of Health and Social Care announced plans to introduce a regulatory framework specially designed to address the behaviour of senior NHS managers. Senior manager guilty of serious misconduct will not be able to secure future roles within the NHS.
• 24 July 2025 – The Commissioners for Hm Revenue and Customs v Taylors Services Ltd (Dissolved): The Court of Appeal agreed with the Employment Tribunal, clarifying that travel between a worker’s assigned place of work and their home address does not count as ‘time work’ for National Minimum Wage purposes.
• 22 August 2025 – The Government published new technical guidance for employers on neonatal care leave and pay. The 35-page guide provides employers with an overview of how the provisions work in practice so that employers are able to comply with their obligations and meet the required standards.
• 1 September 2025 – The Home Office announced that the new corporate criminal offence of 'failure to prevent fraud' has come into effect.
• 5 September 2025 – The Equality and Human Rights Commission has provided its final updated Code of Practice on services, public functions and associations to the Minister for Women and Equalities. It will now be considered by the Government.

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If you would like further information on any of the topics discussed in this article, please contact a member of the Employment, Pensions and Immigration department who will be happy to help.