Impact of Private Members Bill on Employment Law

Day one unfair dismissal rights are coming. Are you ready?   The Employment Rights Bill passed the House of Commons in March 2025 and is now with the House of Lords.   While most changes won't take effect until 2026-2027, HR teams need to start preparing now.   Key changes coming for UK employers: → Unfair dismissal protection from day one of employment (currently 2 years) → Probationary periods with easier dismissal procedures (maximum 9 months being consulted on) → Flexible working requests from day one (already in effect April 2024) → Statutory sick pay from day one (currently starts after 3 waiting days) → Zero-hours contract workers can request guaranteed hours contracts   National Insurance changes hitting April 2025: → Employer NICs increasing from 13.8% to 15% → Secondary threshold reducing from £9,100 to £5,000 per year → Employment Allowance increasing from £5,000 to £10,500 annually   Sexual harassment prevention duties strengthened to "all reasonable steps" (currently "reasonable steps" since October 2024).   Collective redundancy rules changing - employers must count proposed redundancies across all sites, not just individual establishments.   The timeline matters: Implementation roadmap published July 2025 shows phased delivery. Some measures delayed until 2027.   For HR teams, this means: → Audit current contracts and handbooks now → Review probationary period procedures → Strengthen sexual harassment prevention policies → Plan for increased NICs costs from April → Consider impact on recruitment strategies   The bill is 310 pages long - one of the largest employment law changes in 30+ years.   SMEs will be particularly affected due to a proportionally higher administrative burden and costs.   Start planning now rather than later.

The Federation of Small Businesses (FSB) has come out swinging, warning the Government that the Employment Rights Bill could “wreak havoc on our already fragile economy.” As James Hurley writes: “One of the most radical changes is the planned removal of a two-year qualifying period for protections from unfair dismissal. Other changes that are concerning some small employers include granting new rights on sick pay from day one of employment.” The Bill, due to return to Parliament for further debate, has sparked widespread concern. Entrepreneurs across our network have voiced serious reservations, which we’ve communicated to the Government. Finding the right balance is crucial to prevent widespread negative impacts. The FSB’s numbers are stark: two-thirds of surveyed small companies indicate the plans would restrict their hiring capabilities, while one-third anticipate reducing their workforce before the measures take effect in 2026. The CIPD’s recent survey of over 2,000 employers reinforces these concerns: 32% are cutting headcount through redundancies or reduced recruitment, while 24% are either cancelling or scaling back business expansion plans. The government’s own analysis projects annual costs to businesses in the billions. This economic burden won’t remain contained to businesses alone - an imbalanced approach risks creating exactly what the legislation aims to prevent: fewer and less secure jobs. Beyond job cuts and reduced hiring, the legislation may inadvertently encourage employers to shift toward temporary, casual, and self-employed workers. The government doesn’t need to back down on every measure. A case can be made for fairer compensation for last-minute shift cancellations, appropriate bereavement leave for workers, and reforms to the practice of fire and rehire. However, history demonstrates that sustainable workers’ rights improvements are intrinsically linked to economic growth. Economic expansion periods have consistently driven dramatic improvements in wages and job quality, enabling major advances in workers’ rights – from minimum wage laws to union rights and reduced working hours. The Government doesn’t need me to tell them we’re not expanding now. That’s why in the final three months of last year, 32% of small employers expected to reduce staff, up from 17% in the previous quarter, while the proportion of companies looking to hire fell from 14% to 10% over the two quarters. Now’s the time to double-down – nay, triple-down – on its pivot to growth. (Link to whole article in the comments.) (Craig Beaumont, Martin McTague OBE, Emelia Quist might be interested)

🇬🇧 UK Employment Law Is Shifting — Here’s what you Need to Know! As an experienced HR recruiter working closely with in-house teams, I’m seeing first-hand how much pressure People teams are under to stay ahead of the curve — and the legislative curve just got a whole lot steeper. The UK is currently undergoing one of the biggest employment law overhauls in recent years, with the proposed Employment Rights Bill aiming to introduce a wave of new worker protections. While much of it is still under consultation, here’s what HR leaders and TA professionals need to keep an eye on: 🔹 Day-One Rights Employees may soon be entitled to protection from unfair dismissal, sick pay, and parental leave from day one — meaning policies and onboarding frameworks will need a rethink. 🔹 Flexible Working for All The right to request flexible working is now a day-one right — and businesses should ensure their processes (and mindsets) reflect this. 🔹 Clampdown on ‘Fire-and-Rehire’ Employers may soon face tighter restrictions on this practice, which will have implications for change management and restructuring strategies. 🔹 Predictable Hours & Scheduling Especially relevant for shift-based businesses, this proposed change aims to give workers more certainty — and could impact resourcing models and contracts. 🔹 The Rise of the ‘Fair Work Agency’ A new enforcement body may be introduced, with powers to take tribunal claims on behalf of workers. The spotlight on compliance and fairness just got brighter. ✅ On top of this, we’ve already seen Carer’s Leave, enhanced redundancy protection for new parents, and a national minimum wage increase come into effect this April. 📌 If you’re leading a People function right now — this is a critical moment to get ahead of compliance, review your frameworks, and ensure your employer brand reflects the values behind these changes. From a recruiter’s perspective, these updates will also shape how we attract, engage, and retain top HR talent. Candidates are increasingly asking about flexibility, fairness, and EVP — and this legislation gives those questions even more weight. If you're unsure what this means for your hiring, structure, or policy frameworks — I’m always happy to share insights or connect you with experts who can help. #EmploymentLaw #HR #PeopleFirst #UKHR #Recruitment #TalentAcquisition #FlexibleWorking #DEI #EmploymentRights #HRStrategy

It's happened! The Employment Bill has been agreed and is headed for royal assent this week. Whilst it uplifts entitlements and protections for employees, it also makes employment riskier and less attractive to employers. Unemployment rates are now just over 5% and this is likely due to increases in numbers of businesses (SMEs particularly) bringing in freelancers instead of employees. So, what do employers need to think about? 1. Probation periods - when the law comes in you have 6 months to make decisions about whether to exit or keep new starters. Good processes will be key here. 2. Contracts and policies updated to cover entitlements and processes. Previous enhancements might no longer be, so do you make further enhancements or follow new statutory rules. 3. Implement tight absence management processes. Statutory sick pay will become a day 1 right so you need to ensure employees taking high levels of time out are managed. 4. Training for your front line managers so they can implement these new ways of working consistently and confidently 5. Creating contractor or service agreements if you want to onboard self employed team members instead of employees. Need help with this? Get in touch info@bitesizehr.co.uk #hradvice #employmentbill #employmentlaw

The Government has tabled a number of significant amendments to the Employment Rights Bill. These are detailed in its responses to four consultations it launched in October 2024 – concerning zero-hours contracts measures for agency workers, remedies in collective redundancy consultation cases, trade union legislation and statutory sick pay – as well as a consultation undertaken by the previous Government on umbrella companies. The Employment Rights Bill contains measures to tackle one-sided flexibility in zero hours contracts, introducing a right to guaranteed hours reflecting the hours workers have worked during a reference period (anticipated to be 12 weeks). The Government has confirmed that it is tabling amendments to the Bill to set out the framework for agency workers regarding zero-hours contracts. The obligation to offer guaranteed hours will rest with the end user of the worker’s services, although the legislation will maintain flexibility by allowing the obligation to be placed on agencies in certain scenarios. Both the end user and agency will be responsible for providing an agency worker with reasonable notice of shifts, shift cancellations and changes to shifts. Agencies will be responsible for making payments to workers which result from short-notice cancellations, movements or curtailments of a shift. The Government is also proposing to double the maximum period of the protective award for failing to adhere to collective consultation requirements from 90 to 180 days. The Government decided against making interim relief available to employees who bring claims for the protective awards or who make an unfair dismissal claim in a ‘fire and rehire’ scenario. The Government is tabling a number of amendments concerning trade unions and industrial relations. These include strengthening protections against ‘unfair practices’ during the statutory recognition process and simplifying the current information requirements for industrial action ballots and notices. The Bill contains provisions making all employees eligible for statutory sick pay (SSP) by removing the lower earnings limit. However, the Bill allows for lower earners to be paid less than the statutory rate. The Government has now confirmed that employees will either receive 80% of their average weekly earnings or the current rate of SSP, whichever is lower, and has tabled an amendment to the Bill accordingly. The previous Government launched a consultation on ‘Tackling non-compliance in the umbrella company market’. The current Government has now responded to the consultation and has tabled an amendment to the Bill to allow umbrella companies to be regulated for the purposes of employment rights. The Government will consult further on regulations to ensure that workers have comparable rights and protections when working through an umbrella company as when taken on directly by an employment business. #hr #humanresources #hrdirector #hrmanager

The Employment Rights Bill has completed its passage through Parliament, with Royal Assent expected before Christmas. Once enacted, it will become the Employment Rights Act 2025. Progress had stalled over concerns about removing the statutory compensation cap for unfair dismissal. However, following Government assurances and calls from business groups to conclude the process, peers withdrew their final amendment, allowing the Bill to pass unchanged. The Act brings in many changes, but the removal of the compensation cap is one of the Act’s most significant reforms. During Lords debates, the Government confirmed it will publish an impact assessment before these provisions take effect. Notably, David Pannick KC argued that fears around uncapped awards are overstated, pointing to discrimination claims, which have long been uncapped without leading to excessive outcomes. For employers, this confirms that major reform is coming. While uncapped compensation increases potential financial exposure - particularly for higher earners- the promised impact assessment suggests there may be time to prepare, review policies and plan for implementation. We will be speaking more about these important changes to employment law and how businesses can prepare, more in the New Year.