Written by Nicola Gater | 28th February 2025

Changes are coming to UK employment law, and businesses need to be ready. The Employment Rights Bill 2024 was introduced in October 2024 and as of February 2025, is making its way through parliament. It’s expected to receive royal assent later this year, but most of the reforms won’t take effect until 2026 or later.

That might seem like a long way away but waiting until the last minute could leave you scrambling to update policies, train your managers, and adapt to new legal requirements. Getting ahead now will make the transition much smoother.

Here’s an overview of the expected changes and the Reality HR team’s recommendations to ensure your business is prepared.

Statutory Sick Pay (SSP) from day one

For many employees, taking time away from work because of ill health will mean a drop in their pay. Only around half of UK employees receive their full wages when they’re too ill to work, while roughly one in four have to rely solely on Statutory Sick Pay (SSP) to get by. Currently, employees are not eligible for SSP for the first three days of their absence, only receiving some pay from the fourth day of sickness absence if they are off that long.

However, this is set to change. The bill seeks to strengthen SSP by removing the three waiting days as well as extending eligibility to those who earn below the lower earnings limit. Currently, employees must earn at least £123 to qualify for SSP, (rising to £125 from April 6 of this year) but the new bill would remove this threshold altogether so all employees, including the lowest earners, can receive SSP if too ill to work. SSP would instead be calculated as a percentage of their earnings, with the exact percentage yet to be confirmed.

So what is the impact for employers? Losing pay encourages employees to attend work even when sick, meaning illness spreads through the team causing wider absence and lost productivity. Supporting employees to rest and recover means they are back at their best sooner, with less impact on others. Some employers are concerned that an increase in sick pay leads to an increase in sickness absence, however in our extensive experience across many organisation sizes and sectors, we know the most important factor in addressing high levels of absence is not pay, but implementing effective attendance management policies and processes which support employees to attend work regularly and deter casual absence and non-genuine sickness.

To prepare, it’s a good idea to review your sick pay and absence policies now to make sure they align with the new rules and support a healthy and well attended workplace. Managers should be trained to handle short-term and long-term absences effectively, ensuring employees feel supported while preventing unnecessary time off. You may also consider implementing initiatives that promote employee wellbeing and both physical and mental health.

Changes to zero hours contracts

Zero hours contracts may seem appealing, offering flexibility to both employers and workers. However, in reality, they tend to favour employers, giving them greater control over staffing costs and obligations, whilst workers have no guaranteed hours and are left vulnerable to periods of no income when work isn’t available.

The bill proposes a change to create more stability for workers, by requiring employers to offer qualifying zero hours workers guaranteed hours based on the hours worked during a ‘reference period’ (the government suggests this to be 12 weeks).

Additionally, the Bill plans to give workers the right to reasonable notice of shifts and any changes to those shifts, with payment for shifts that are cancelled at short notice.

If your organisation relies heavily on zero hours or casual worker contracts, you will need to consider adjustments to shift scheduling, staffing processes, and employee communication. You will need to ensure you provide adequate notice of shifts and have policies in place to manage cancellations fairly. Reviewing and updating contracts, scheduling systems, and payroll procedures will be essential to for legal compliance and keep your casual workforce happy.

Flexible working rights

Flexible working is no longer a “nice to have” – it’s an expectation for many. In 2024, employees were given the right to request flexible working from the first day of employment, and employers are required to consider and respond within 2 months.

In many cases a trial period can be agreed to explore the impact before a final decision is made. Requests can be refused for one of eight specific business reasons including the burden of additional costs, a detrimental impact on meeting customer demand or an inability to reorganise work among existing staff.

Under the new bill, if refusing a flexible working request, you will need to go further in justifying why it is “reasonable” to refuse, giving additional detail about why you are denying the request.

This may open up further discussion, disagreement or negotiation about the request and the reasonableness of any refusal, and so could result in appeals or even tribunal claims. We always encourage employers to be open minded about requests and at least agree a trial period wherever possible, however it will still be possible to refuse a request where there are clear and justified reasons to do so.

To prepare, review your flexible working policy now and ensure your managers are well trained so they are able to consider requests fairly and make reasonable decisions that balance the needs of the employee with what is right for the business.

Having a clear, structured approach to flexible working will help maintain compliance, and having an open-minded approach to considering requests will improve employee satisfaction, retention, and productivity. As a result, you may find your business is in a stronger position to attract and retain top talent.

New leave entitlements

The new bill also proposes statutory leave entitlements aimed at offering greater support for employees navigating challenges in their personal lives. Bereavement leave, currently only available to parents grieving a stillbirth or the loss of a child under 18, would extend to all employees, ensuring they have time to grieve. This is likely to be unpaid, and any specifications around qualifying relationships are still to be confirmed.

Paternity leave and parental leave are set to become day one rights, removing the requirement for a qualifying period of employment.

These changes reinforce the expectation for businesses to create a more supportive and inclusive workplace culture. Managers will need training to handle leave requests with care, empathy and discretion. Your leave policies should be reviewed to reflect the new entitlements, ensuring employees are aware of what is available to them.

Third party liability for discrimination and harassment

Businesses will become responsible for harassment committed by third parties, meaning you could be held liable if customers, suppliers or visitors harass your employees. To avoid legal claims, you will need to take proactive steps to prevent incidents and have processes to address them robustly and swiftly if they should occur.

Recent legislation that came into force in October 2024 requires employers to take reasonable steps to prevent sexual harassment, but the bill will go further as employers will need to prove they have taken all reasonable steps, and likely in respect of preventing all forms of harassment.

So, what can your business do? Strengthening anti-bullying and anti-harassment training, setting up clear reporting procedures, and updating policies to reflect these new third-party liability rules are all essential. Managers play a crucial role here, and our Dignity at Work training can help equip them with the knowledge and tools to create a safe, inclusive workplace.

Beyond just meeting legal obligations, fostering a respectful work environment is key to building employee trust, maintaining a positive company culture, and ensuring that everyone feels safe and valued at work.

Whistleblowing protections

The new bill clarifies that disclosures about sexual harassment now explicitly qualify as protected whistleblowing. While this isn’t a massive shift – employees could already whistle blow about sexual harassment under existing public interest disclosure categories such as legal non-compliance or health and safety risks – it removes any ambiguity and reinforces protections for those who speak up.

This change could encourage more reporting of concerns, including from witnesses as well as victims, and will require broader investigation is undertaken. That said, not every complaint about sexual harassment automatically counts as. For protection under whistleblowing law, a worker must disclose information to the right person (usually their employer or a regulator) and believe it’s in the public interest.

Employees who report misconduct must feel confident that their concerns will be taken seriously, handled sensitively, and won’t lead to retaliation. Whistleblowing policies must be up to date and have clear, safe, procedures for handling complaints.

Training is key here. Managers need to know how to respond appropriately when concerns are raised. Creating a culture of trust and transparency isn’t just about compliance, it’s about ensuring every employee feels safe, valued, and supported in the workplace.

Unfair dismissal protections

Currently, employees need two years of continuous service before they can claim unfair dismissal at tribunal. The new bill removes this qualifying period, giving employees protection from unfair dismissal from day one.

This raises the risk that employees could appeal against dismissals or make claims when previously they could not. Whether or not their claim is valid, it costs time and money to deal with. To reduce the risk, it becomes more important to recruit the right person and support them properly to learn and perform well in their job, so there is no need to dismiss. However, if things don’t go to plan and you have to part company, then following fair processes will avoid a claim. Act now to review and update your recruitment, induction and probation processes and ensure all your managers have knowledge, and the time, to implement them properly. Check your performance management, disciplinary and dismissal policies are legally compliant and ensure they are carried out properly and consistently throughout your organisation. Management training in these areas will be key to reducing the risk of employment tribunals.

Fire and rehire restrictions

The Employment Rights Bill is changing the way you can handle ‘fire and rehire’, a controversial practice, some examples of which have been seen in the media in recent years. Traditionally, this let employers make contractual changes by terminating an employee’s existing contract and offering them a new one on different terms.

The bill will make it automatically unfair to dismiss an employee for refusing to agree to a change in their contract of employment, except where you can show evidence of financial difficulties, that the firing and rehiring was to eliminate, prevent, or significantly reduce or mitigate the difficulties; and that the need to change the contractual terms was not reasonably avoidable. Fire and rehire is a last resort!

Even where an employer can meet each of these tests, an employment tribunal will still have to assess whether the dismissal was fair in the circumstances.

Before relying on fire and rehire, we recommend proposed contractual changes are properly consulted upon with transparent negotiations, fair procedures, and approaches that maintain trust and involvement, in order to seek agreement and avoid the need for fire and rehire.

Collective redundancy consultation rule changes

Any employer proposing 20 or more redundancies “at one establishment” (the site or workplace) within a period of 90 days must go through a process of collective redundancy consultation before the redundancies can go ahead. This means informing and consulting representatives of affected employees, and failure can result in claims for a “protective award” of up to 90 days’ uncapped pay for each affected employee.

Employers must also file Form HR1 with the government, giving advance notice of the redundancies, and begin consultation with representatives at least 30 days before the first dismissal (45 days for 100 or more dismissals).

The new bill removes references to “at one establishment” from the legislation, meaning that employers need to look across the whole business when calculating the number of proposed redundancies.

Seek HR advice to ensure you understand the new redundancy consultation rules and have a clear plan for compliance. Effective communication with affected employees and providing adequate support during redundancy processes will help maintain morale and minimise disruption for your business.

Other employment law changes and trends for 2025

Beyond the key legislative changes we have talked about, there are a few trends and changes to keep an eye on. Updates to child employment laws will bring clearer guidelines around Saturday jobs and entertainment work, making it easier for businesses to navigate the rules when hiring young workers.

Sunday trading laws are also changing, meaning some businesses, particularly in retail and hospitality, may need to revisit contracts and working hours to stay compliant. The rise of social media use in the workplace continues to create challenges, with businesses needing clear policies on what’s acceptable both in and outside of work.

At the same time, workforce demographics are shifting in ways that will change hiring and retention strategies. With lower birth rates, fewer young people are entering the job market, while more retirees are returning to work, either because they need to earn money or want to stay active. This multigenerational workforce brings both opportunities and challenges, requiring businesses to rethink how they attract and support employees at different life stages.

We can help you navigate these challenges, and whether you need policy reviews, manager training, or expert HR advice, we can help you implement best practices and prepare for the Employment Rights Bill. Get in touch with our team at [email protected].