Employment Rights Bill Passes Ahead of Year-End Recess – What employers need to know

After months of debating between the House of Lords and the House of Commons, the long-awaited Employment Rights Bill has now passed through Parliament.

It is anticipated that the Bill will receive Royal Assent almost immediately, although it will not come into force until much later. However, it is important that business owners and employers understand the changes and start taking measures to prepare for them. Set timetables will be introduced, designed to give employers clarity and time to prepare, while gradually strengthening protections for workers.

Here, we will take you through the key changes and timelines employers should be aware of and what the next steps look like.

Once the Act is formally approved, the requirements for notice and balloting will be reduced.

• Day-one rights will apply for statutory sick pay, paternity leave and unpaid parental leave.
• Enhanced whistleblowing protections, including additional protection for workers who report sexual harassment.
• Trade union recognition process will be simplified, as well as an introduction to e-balloting for industrial action.
• Introduction of a Fair Work Agency to improve the enforcement of employment rights.
• The protective award for failing to comply with informing and consulting in collective redundancy will double from 90 days to 180 days.

Employers and HR teams should review and update staff handbooks, sickness absence policies, and family leave arrangements to reflect these changes. The sooner you get organised, the better!

Additional reforms to expect include:

• Shorter qualifying periods from 2 years to 6 months for unfair dismissal protection
• Introduction of bereavement leave
• New rules to limit fire-and-rehire practices
• Employers to take all reasonable steps to protect employees, including against third-party harassment
• Tighter controls on zero-hours contracts
• Enhanced enforcement powers for regulators
• The cap on unfair dismissal compensation will be removed, so there is no upper limit.
• Compulsory gender pay gap and menopause action plans for employers with over 250 employees
• Tribunal limits extended to six months, allowing employees longer to bring a claim

Although the final wording of the Bill has now been agreed, further regulations and official guidance will provide clarity on how certain provisions will work in practice, including consultation duties, procedural requirements, and how new enforcement powers will be used.

While there is general agreement that the Bill provides a clearer framework, some uncertainty remains around how the changes will operate on a day-to-day basis once they come into force. In particular, there are concerns about the impact on employment tribunals and how compensation levels will be applied. For HR and legal teams, this means keeping up to date with new guidance as it is published and starting compliance planning as early as possible.

With formal approval of the Act expected soon, now is the time employers should start preparing by:

• Reviewing existing policies, practices and procedures to identify what needs changing in 2026 and beyond.
• Updating policies to reflect new rules on parental leave, sick pay, sexual harassment, flexible working, bereavement leave and whistleblowing protections.
• Training managers and HR teams on the developing framework of employee rights and how these will be enforced.
• Monitoring further regulations and guidance, which will set out the detailed requirements for each phase of the reforms.

Taking these steps will help ensure businesses remain compliant as the new law comes into force and are well prepared to adopt effective people management practices throughout 2026 and 2027.

In relation to these developments, the Backhouse Solicitors team of employment specialists are here to help. We provide clear legal advice and practical guidance. We also offer a comprehensive HR and Employment Law package, including support with handbooks, workplace policies and procedures.

Contact us today to discuss our HR and Employment Law package options or to book a free initial consultation with our friendly advisors and find out how to protect your business from unnecessary employment claims.

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