Is your business ready for this year’s Employment Rights Bill changes?

The Employment Rights Bill is on course to become law later this year, bringing far reaching changes in the workplace.

Steph Marsh, Head of the Employment team, outlines what it will mean for employees and employers, how its introduction will be phased and how employers should be preparing now for what’s to come.

Autumn 2025 changes

A flagship piece of legislation for the Government, the Employment Rights Bill is currently making its way through Parliament and is expected to receive Royal Assent in autumn 2025.

This Bill will amend and add to the existing Employment Rights Act 1996, with the majority of updates taking effect in 2026 and 2027 but some, in particular relating to industrial action and trade union activity, coming into force earlier.

Firstly, this will include a reversal of the ‘minimum service levels’ rule around striking (put in place by the previous Government in The Strikes (Minimum Service Levels) Act), which required employers in certain sectors such as healthcare or education, to require employees to work during a strike to maintain a minimum level of service.

Additionally, there will be increased protection from dismissal for those participating in industrial action. Currently, employees are protected by law from being unfairly dismissed if they take part in official action (organised by a trade union). If an employee is dismissed for going on strike for 12 weeks or less, it is considered automatically unfair. The Employment Rights Bill will also remove the current 12 week limit for claiming unfair dismissal if dismissal is due to taking part in industrial action.

In terms of trade union activity more generally, the time needed to give notice of industrial action will be reduced from 14 days to 10 days. A simple majority vote is all that will be needed for industrial action, without the need for picket supervisors. Finally, industrial action and ballot notices will be simplified.

April 2026 changes

The next phase of changes will come in April 2026 and focus more on employee rights, such as parental leave, sick pay and the gender pay gap.

Paternity leave and parental leave

Paternity leave and unpaid parental leave will no longer be awarded based on length of service. Instead, paternity leave and ordinary parental leave are expected to become a ‘day one’ right. Quite simply, a person will be entitled to take parental leave no matter how long they have worked at the company.

Currently, you cannot take paternity leave after you have taken shared parental leave. The Employment Rights Bill proposes that this will be removed should it become law.

Sick pay

Presently, to be eligible for Statutory Sick Pay (SSP), an employee must have average weekly earnings of around £125 per week for the tax year 2025/26. This is known as the lower earnings limit, and it is likely to be removed under the Employment Rights Bill. This means no minimum amount of earnings are required before a worker is eligible for sick pay.

In addition, SSP will be paid to employees from the first day of their sickness and not the fourth.

Redundancy

When an employer is in a redundancy situation, they must consult with employees and follow the proper process. Currently, where dismissals are made without this, it is deemed unfair and could see an employer taken to tribunal. Employees are awarded a penalty known as a Protective Award and these can span from 45 days to 90 days’ pay. The Employment Rights Bill is expected to double the Protective Award for failure to consult in a collective redundancy, from 90 days’ pay to 180 days’ pay.

Whistleblowing protection for sexual harassment

Sexual harassment will become a qualifying disclosure under the Employment Rights Bill. This means that anybody who makes a sexual harassment claim will be protected from detriment and disclosure under the legislation for whistleblowing.

Gender pay gap and menopause action plan

Under the Employment Rights Bill, employers are likely to need a voluntary action plan on the gender pay gap and the menopause if they have over 250 staff. These plans are likely to become mandatory in 2027.

October 2026 changes

The next set of changes aren’t likely to come in until this time next year, October 2026, and are also the most likely to change after further consultation.

• Dismissal and rehire (also known as fire and rehire) is expected to become an automatic unfair dismissal.
• Employers have a new duty to prevent sexual harassment from third parties and take all reasonable steps to prevent it rather than some. Further changes to ‘reasonable’ are also expected in 2027.
• In 2023, the Employment (Allocation of Tips) Act became law requiring employers to pass on tips in full to workers in a way that is fair and transparent. It sets out that businesses regularly receiving tips should have a Tipping Policy in place. The Employment Rights Bill requires employers to consult with workers before creating such a policy. Additionally, it will need to be updated every three years.
• Time limits to bring claims to an employment tribunal are expected to increase from three months to six months.
• Employers may have a new duty to inform workers of their right to join a trade union. There will be updated rules on a trade union’s right of access to the workplace and reasonable accommodation and facilities for representatives carrying out their duties.
• There will be a new right to time off for union equality representatives to carry out their duties.
• Workers taking part in industrial action will be protected against detriment and unfair dismissal.

2027 changes

Looking ahead to 2027, these changes are also likely to alter after further consultation has taken place.

• Unfair dismissal will become a day one right instead of the current two year limit required.
• New statutory rights are to be introduced regarding bereavement leave.
• There will be more protections against dismissal for pregnant workers and those on maternity.
• Workers on zero hours contracts are to be given guaranteed hours with compensation for shifts which are cancelled at short notice.
• Employers will be unable to refuse a flexible working request from an employee unless they give reasons and why explain why the refusal is reasonable.

Employer next steps

The Employment Rights Bill is set to shake up the current law surrounding the workplace for both employees and employers alike. For employers, it is important to be aware of the changes and to consider the impact of this incoming bill on their organisation.

Businesses need to be proactive and update any relevant policies and contracts to ensure you are compliant with the latest updates to employment law.

It will also be vital to keep up to date with further changes, as we cannot say for sure whether the changes further down the line will be altered, and if so, to what extent.

Coodes’ Employment team offer the full spectrum of services and advice for supporting your business. We offer pragmatic and business-specific solutions, on an ad hoc basis or through our Employment Retainer scheme. We can provide businesses with varying levels of support depending on their specific needs.

To prepare for the Employment Rights Bill, get in touch with Steph Marsh, or Coodes’ Employment team today. Email steph.marsh@coodes.co.uk or call 01579 324017.