On 16 December 2025, the UK Employment Rights Bill cleared its final parliamentary hurdle in the House of Lords, marking a historic moment in employment law reform and paving the way for it to receive Royal Assent imminently.
This Bill represents one of the most significant overhauls of workplace rights in decades. After prolonged debate, back-and-forth amendments, and sustained scrutiny from business and trade bodies alike, Parliament has now agreed on a framework that promises to reshape employer, employee relations across the UK.
What Has Changed? Key Provisions of the Bill
While many measures will be phased in over the next two years, several headline changes stand to impact every HR and people team:
Expanded unfair dismissal protection
The qualifying period for ordinary unfair dismissal claims will reduce from two years to six months for new hires, meaning a broader group of workers will be protected sooner.
Removal of compensation cap on unfair dismissal
The Bill abolishes the statutory cap on compensatory awards, significantly increasing employers’ financial exposure in dismissal disputes once this provision comes into force.
Zero-hours contracts reform
There are new safeguards for zero-hours and low-hours workers, including guaranteed hours based on actual worked patterns, reasonable notice of shifts, and compensation for last-minute cancellations, especially pertinent for industries with flexible staffing models.
Day-one rights for key entitlements
Statutory rights such as sick pay, paternity leave, and unpaid parental leave will become available from day one of employment as early as April 2026.
Trade union and industrial action reforms
The Bill repeals older anti-strike laws, simplifies ballots and recognition procedures, and strengthens protections for workers participating in industrial action.
New enforcement architecture
A dedicated Fair Work Agency will be established to ensure compliance, including the ability to bring tribunal claims on behalf of workers.
Why This Matters for HR Leaders
- HR policies, contracts, and procedures will need review and revision well ahead of implementation dates
- Performance management and probation handling may need greater structure to mitigate the risk of unfair dismissal claims
- Workforce planning models might shift, especially where flexibility has been central to operating models
- Employers should prepare to educate managers and teams on new statutory rights and compliance expectations
Opportunities and Challenges
Unions have welcomed the changes as overdue, asserting that they bring UK workplace protections closer to modern standards. Employers and business groups, while supporting progress, have expressed concerns around implementation timelines and increased administrative and financial burdens.
For HR professionals, proactive planning will be critical. With staged commencement dates stretching into 2027, organisations that invest early in compliance readiness will be better positioned to embed these reforms effectively, turning regulatory change into a strategic advantage.
At Wellity Global, we provide organisations with the guidance and expertise needed to implement legislative changes effectively and maintain robust workforce compliance.
