The Employment Rights Bill, first introduced by the Labour government in 2024, represents the most substantial overhaul of workplace law in decades. 

While the Bill is currently making its way through Parliament, the direction is clear: employers should expect an increase in legal duties, more stringent procedural expectations, and stronennager enforcement mechanisms. Preparation now will help reduce the risk of future disruption and legal claims once the reforms come into force, likely from 2026 onwards.

Employers should begin with a review of their HR policies. Many existing staff handbooks and templates will no longer meet legal requirements under the new regime. Areas such as sickness absence, flexible working, family leave, probationary periods and dismissal procedures will all need attention. Day-one rights to request flexible working and to claim unfair dismissal will reduce the reliance employers can place on informal or probation-based dismissals. Managers should be trained to follow a fair and well-documented disciplinary procedure from the outset of employment.

Contract terms will also require review. Employers may need to revise working time arrangements, particularly where part time hours are offered or where casual workers are used under rolling or zero-hours arrangements. Reforms targeting exploitative scheduling practices mean employers could be required to offer more predictable hours to those with regular working patterns. In some cases, businesses may wish to consider alternative models such as job share or annualised hours to manage demand more consistently within the scope of the new rules.

Businesses that rely on fixed-term contracts or make regular changes to staffing structures will also need to reassess their planning in light of changes to dismissal rules and protections against contractual variation. Where restructuring is necessary, careful handling of redundancy pay entitlements, voluntary redundancy processes, and statutory consultation requirements will be essential to remain compliant.

Employers involved in transfers of staff should also stay alert to potential changes to TUPE. Although no sweeping reforms to TUPE have been announced as part of the Bill, the broader emphasis on fair treatment and contractual transparency may affect how such transfers are managed, particularly when accompanied by contractual changes or redundancy risks.

Another important area of focus is equalities compliance. Employers with over 250 staff will be expected to publish annual equality action plans addressing pay gaps and inclusion. While some elements remain subject to consultation, it is likely that duties will expand over time. Employers should start reviewing their data practices and consider how to build in support mechanisms such as reasonable adjustment examples to demonstrate compliance with their duties under the Equality Act and the new legislation.

Employee relations will also become more structured. With union access and recognition set to become easier, employers should ensure their internal processes for managing workplace concerns are robust. A well-drafted grievance policy and consistent application of fair procedures can reduce the risk of disputes escalating. In certain cases, employers may wish to use a settlement agreement to resolve issues where the employment relationship has broken down, though this should be approached with legal advice.

Contract reviews should also extend to restrictive covenants, especially for senior or client-facing staff. As employment rights strengthen and staff mobility increases, enforceable post-termination protections may become more important for business continuity and safeguarding client relationships.

The overall message for employers is clear. The Bill will not be business as usual. It will require policy reform, contract amendments, staff training, and greater attention to workforce structure and legal compliance. Acting early can help employers avoid rushed decisions and put in place the right frameworks ahead of the implementation period.

Contact DavidsonMorris for specialist guidance for your organisation.