Employment Rights Bill passed by the House of Lords
The Employment Rights Bill has (finally) successfully cleared Parliament, with the House of Lords dropping its opposition during the third round of legislative back‑and‑forth, most recently concerning the cap on compensatory awards for ordinary unfair dismissal claims which is now to be removed.
Provided Royal Assent is granted before Christmas, (Royal Assent is expected on Thursday 18th December 2025) the legislation will formally become the Employment Rights Act 2025.
The Act will result in significant changes for UK employers.
Changes to be implemented from April 2026 include:
- Statutory Sick Pay payable from the first day of absence
- Doubling of collective redundancy protective awards from 90 to 180 days
- The launch of the Fair Work Agency to enforce labour standards
- A simplified trade union recognition process
- Reporting sexual harassment will count as a qualifying disclosure for whistleblowing protection.
Other key changes that will be implemented through 2026 and into 2027 include:
- Restrictions on fire-and-rehire to change terms and conditions
- Increased trade union access rights
- Extended tribunal claim time limits from 3 to 6 months
- Guaranteed Hours Contracts
- The right to reasonable notice of shifts and shift changes
- Unfair Dismissal eligibility after 6-months of employment and the removal of the cap on compensation
- New protections for pregnant workers and those returning from family leave
- Strengthening of flexible working rights
Details will continue to develop during the implementation phase of the Act. Employers should ensure handbooks, contracts, and HR systems reflect the changes that will result from these new provisions. Managers and HR teams should also receive renewed training and guidance on handling family leave, sickness absence, whistleblowing, and union recognition. Workplace models such as zero-hours contracts should be reviewed in-line with the changes..
Please look out for our upcoming in-depth roundup detailing which changes will take effect and when. For further guidance, contact the Geldards Employment Law team.