HR’s Role in Adapting to the Employment Rights Bill

Posted onFebruary 25, 2025

The Employment Rights Bill (ERB), introduced to Parliament on 10th October 2024, represents a significant update to UK employment law designed to strengthen worker protections and modernise workplace practices. This Bill will have a direct impact on mid-sized companies, particularly in areas related to HR policies and processes.

Currently progressing through Parliament, Royal Assent is expected by mid-2025, with many of its provisions set to take effect in 2026, following further consultations and the development of detailed regulations. Despite the timeline, HR leaders should act proactively now to prepare for these changes. By doing so, HR can ensure the company stays compliant, maintains strong employee relationships, and is ready to adapt smoothly when the new rules are implemented. This forward-thinking approach will also demonstrate the company’s commitment to fostering a fair and progressive work environment.

Key Areas of Impact

1. Regulation of Zero-Hours Contracts and Predictable Scheduling

The ERB introduces key reforms to improve job security and income predictability for zero-hours workers. While zero-hours contracts will not be banned, the Government is consulting on a framework for the right to guaranteed hours, subject to a qualifying reference period. These changes will particularly impact industries that rely on flexible staffing, such as retail, manufacturing, and hospitality. The specific details—such as eligibility criteria, reference periods, and the duration of guaranteed hours—are yet to be determined.

These measures include:

Right to Request Guaranteed Hours: Workers with consistent work patterns over a set period can request a contract with fixed hours. The Government is consulting on the details, including eligibility and contract duration.
Notice for Shift Changes: Employers must provide reasonable notice for any shift changes, reducing last-minute alterations.
Compensation for Cancelled Shifts: Employees will be entitled to pay if a shift is cancelled or significantly changed without adequate notice.

These changes will require employers to adjust workforce planning and scheduling processes. HR teams should review rostering systems, establish fair procedures for managing shift changes, and ensure compliance with the new regulations as further details emerge.

2. Strengthened Flexible Working Rights

The ERB strengthens the Flexible Working Bill by reinforcing employees' right to request flexible working from day one of employment. Under the new rules, employers can only refuse a request if a specified ground under the Employment Rights Act applies and the refusal is deemed reasonable. Additionally, employers must clearly communicate the grounds for refusal and justify why the decision is reasonable.

Key provisions include:

Expanded Right to Request Flexible Working: Employees can request flexible working arrangements from their first day rather than waiting 26 weeks as previously required.
Faster Decision Timelines: Employers must respond to flexible working requests within two months, down from three.
Requirement for Justification: Employers denying requests must provide clear, business-related reasons for doing so.

HR should ensure that managers are trained to assess flexible working requests fairly and that internal policies align with the new requirements. Failure to comply may lead to grievances or legal challenges.

3. Changes to Statutory Sick Pay (SSP)

The ERB proposes significant reforms to SSP, impacting how businesses manage employee absences.

Changes include:

SSP from Day One: Employees will no longer have to wait three days before qualifying for SSP, which could increase company payroll costs.
Lower Earnings Limit Removed: More workers, including those on lower wages, will now be eligible for SSP.

HR must revisit their absence management policies and update payroll systems to reflect these changes. Additionally, companies should consider whether enhanced sick pay policies might be necessary to maintain employee engagement and well-being.

4. Expanded Leave Entitlements

The ERB introduces greater flexibility in leave entitlements, aiming to support employees during significant life events.

Key changes include:

Parental Leave and Paternity Leave from Day One: Employees will now have access to these benefits without needing to meet a qualifying period.
Bereavement Leave Provisions: Currently, employees are entitled to two weeks of parental bereavement leave for the loss of a child. The ERB extends this right to cover a broader range of close family relationships, offering one week of leave in most cases and maintaining the two-week entitlement for loss of a child.

Organisations will need to update their HR policies and ensure payroll systems can accommodate these enhanced benefits. Proper communication with employees about their entitlements will also be crucial.

5. Employer Responsibility for Workplace Harassment

The ERB strengthens workplace harassment protections, particularly for sexual harassment, by:

Placing a Legal Duty on Employers: Employers must take all reasonable steps to prevent workplace harassment, strengthening existing requirements.
Introducing Third-Party Harassment Protections: Businesses will be responsible for preventing harassment by clients, customers, and suppliers, covering all protected characteristics—not just sexual harassment.
Enhancing Whistleblowing Protections: Whistleblowing legislation will be amended to ensure disclosures of sexual harassment are explicitly protected.

To remain compliant, HR teams should review workplace harassment policies, implement regular training, and establish clear reporting mechanisms. As the ERB raises the threshold for employer responsibility, even proactive businesses may face challenges in demonstrating compliance. Failure to take preventive measures could result in legal repercussions. Further guidance is expected on what constitutes “reasonable steps” under the new law.

6. Fire and Rehire Practices

The fire and rehire provisions in the ERB aim to reduce the misuse of dismissals to force employees to accept changes to their terms of employment. While the Bill does not ban this practice entirely, it makes it harder to implement legally, particularly when dismissals are based on employees refusing to accept changes. There is an exception for employers facing financial difficulties, but this may not be easy to meet.

For HR, this means greater responsibility to ensure any proposed changes to contracts are communicated and negotiated fairly, with a clear process that involves consultation and proper justification. HR teams should review their policies to ensure compliance with these provisions, train managers on fair change management practices, and ensure employees are fully informed of their rights to prevent disputes.

7. Removal of the Qualifying Period for Unfair Dismissal Claims

The Employment Rights Bill (ERB) removes the two-year qualifying period for unfair dismissal claims, allowing employees to challenge dismissals from day one. This change has raised concerns, particularly among smaller employers. A Federation of Small Businesses (FSB) survey (6 January 2025) identified day-one dismissal rights as a key issue. While some fear a rise in claims, others suggest it may reduce speculative whistleblowing and discrimination cases.

The ERB introduces a proposed 9-month probationary period, allowing dismissals for capability, conduct, statutory contravention, or “some other substantial reason” (excluding redundancy). The changes are expected no sooner than Autumn 2026.

Key recommendations:

Robust Performance Management: Ensure fair, well-documented dismissal procedures.
Stronger Onboarding & Probation: Set clear expectations and conduct regular performance reviews.
Thorough Hiring Processes: Strengthen pre-employment screening, investigate CV gaps, and follow up on references.
Flexible Workforce Planning: Consider temporary hires or consultants to reduce dismissal risks.
Manager Training: Educate line managers on dismissal protocols.
Employment Contract Updates: Align contracts with new legal obligations.

Key Actions for HR to Ensure Compliance

To effectively navigate the changes brought by the ERB, HR teams must take proactive steps now to prepare. Below are essential actions to help ensure compliance and smooth adaptation:

Policy Updates: Conduct a thorough review of employment contracts, HR policies, and dismissal procedures to ensure compliance with the new legal framework.
Training for Managers: Equip HR teams and managers with the knowledge to implement changes effectively, particularly in flexible working, fair dismissal, and workplace harassment policies.
Employee Communication: Clearly communicate new rights and protections to employees to foster transparency and trust.
Budget Adjustments: Anticipate potential increases in costs related to sick pay, leave entitlements and shift compensation, and adjust financial planning accordingly.
Legal Compliance Monitoring: Stay informed about the ERB's implementation timeline and seek legal guidance if needed.

Navigating Change: Conclusion

In conclusion, the ERB presents significant changes that will reshape employment practices for mid-sized businesses, particularly in HR. While implementing these reforms may seem challenging, they provide an opportunity to improve employee satisfaction, retention, and workplace culture. By proactively preparing for these changes, HR leaders can ensure compliance, reduce risks, and create a fairer, more progressive environment that benefits both the workforce and the company’s long-term success.