The Employment Rights Bill — where are we now?

The Employment Rights Bill, which contains the UK Government’s flagship employment law reforms, has been subject to significant amendments. We summarise the current position ahead of Royal Assent expected later this year.    

Background

The Employment Rights Bill (ERB) – introduced on 10 October 2024 – has been widely consulted upon, and also reviewed by the Commons and the Lords. Significant amendments have been made and it is expected to receive Royal Assent this autumn (albeit the majority of its provisions will not come into force immediately). 

In this article we summarise the current ERB position for seven key areas of employment law reform.

Discrimination and harassment

A central tenet of the ERB is to strengthen protections against workplace harassment, as follows:

• Employers will be under a new duty to take all reasonable steps to prevent sexual harassment, raising the bar from the current ‘reasonable steps’ standard.
• Sexual harassment will be added to the whistleblowing regime, meaning workers reporting past, ongoing or likely future sexual harassment will be eligible for whistleblower protections, such as interim relief and the voiding of contractual confidentiality obligations.
• Liability for third-party harassment will be reintroduced, covering all protected characteristics.

These provisions remain largely unchanged from the original ERB and are expected to come into force in October 2026.

Fire and re-hire

The ERB introduces new restrictions on dismissal and re-engagement practices. Dismissals linked to an employee’s refusal to accept variations to the contract of employment will be deemed automatically unfair. A limited ‘financial test’ exception applies if an employer can demonstrate that a variation was necessary to prevent imminent business failure. 

This reform, which is anticipated to be implemented in October 2026, has been somewhat diluted. In the original ERB, any contractual variation was to be in scope for the enhanced protection. Following consultation, however, only ‘restricted variations’ of the contract of employment – most prominently changes to pay, pension, working hours, holiday entitlement and the inclusion of variation clauses – are in scope. Notably, changes to duties and place of work are not.

Collective redundancies

The protective award for failure to collectively consult will be increased from 90 to 180 days’ pay per affected employee, with this change expected to take effect in April 2026. 

While the original ERB proposed to remove the ‘establishment’ test (thereby significantly widening the circumstances in which collective consultation is required), this reform appears to have been abandoned.

Families and pregnancy

The ERB will enhance protection for pregnant women and those returning from a period of family leave.  

It is expected that this will make it unlawful for an employer to dismiss any employee who has been pregnant within six months of their return-to-work date, save for ‘specific circumstances’ (which have yet to be defined).

A consultation on strengthened rights for pregnant workers is due to start in autumn 2025 and it is anticipated that these provisions will not come into force until 2027 (with precise details to be governed by regulations).

Increased protection is also expected to be introduced (although detail still to be provided) in relation to dismissal after a period of:

• maternity leave
• adoption leave
• shared parental leave
• extended paternity leave in the case of bereaved parents
• neonatal care leave.

Paternity leave, parental leave (both from April 2026) and bereavement leave (expected to come into force in 2027) will become day-one rights for eligible employees.  

Non-disclosure agreements (NDAs)

Significant amendments to the original ERB on the use of NDAs were introduced in July. These amendments will render any provision in an agreement void if it precludes the worker from making any allegation of, or disclosure of information relating to, any ‘relevant’ harassment or discrimination (including an employer’s response to any allegation).

Discrimination or harassment will be ‘relevant’ when it consists of the conduct of the employer or another of the employer’s workers; or the actual or alleged victim is the worker themselves or a fellow worker.

Currently not included within the definition of ‘relevant’ harassment or discrimination are victimisation, the duty to make reasonable adjustments and third-party harassment. However, these may be added at a later date.

It is unclear when these provisions are intended to come into force, as they were not included in the Government’s implementation roadmap published in July.

Statutory Sick Pay (SSP)

The ERB will remove the three-day waiting period to receive payment of SSP, therefore an ‘incapacity for work’ will commence on day one of an absence.

Following a consultation seeking views on what percentage of average weekly earnings should be for the purposes of calculating SSP, the government’s consultation response (published March 2025) confirmed that the percentage rate would be set at 80% of normal weekly earnings, where that falls below the applicable SSP flat rate. The Government has not yet provided any confirmation as to what the flat rate will be.

Unfair dismissal

Arguably the most significant change that the ERB will introduce is removing the qualifying period (currently two years) for an employee to acquire the right not to be unfairly dismissed and making this a day-one right.   

While this will mean that employees will have protection from unfair dismissal even during a probationary period, the Government has indicated that there will be a simplified process for a fair dismissal during ‘an initial stage of employment’. It remains to be confirmed what that process will be. It has also been confirmed that any dismissal on grounds of redundancy will not be covered by any provisions relating to ‘an initial stage of employment’, therefore a full and fair redundancy process will have to be used by employers for all employees, regardless of their length of service once the increased protection has been introduced.

The Lords passed an amendment (in July) to retain a qualifying period of six months. However, it is unlikely that the Government will back away from its pledge to grant employees unfair dismissal protection from day one.

A consultation is expected to be launched this autumn, with the new measures introduced in 2027.

Laura Macdonald and William Lane are solicitor members of the Law Society of Scotland’s Employment Law Subcommittee