Employment Law Update - July 2025

Businesses have been asking for some time for an indication of the timescale for the wave of reforms under the Employment Rights Bill and we now have it. It should be noted that a number of the reforms are still subject to consultation and the timeline may therefore change. 

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Roadmap for implementation of the Employment Rights Bill

Autumn 2025

Measures that will take effect when the Act receives Royal Assent or soon afterwards (which is expected to be in Autumn 2025) include: 

• Repeal of the Strikes (Minimum Service Levels) Act 2023
• Repeal of the great majority of the Trade Union Act 2016 
• Removing the 10 year ballot requirement for trade union political funds 
• Simplifying industrial action notices and industrial action ballot notices 
• Protections against dismissal for taking industrial action

Read in more detail here.

April 2026:

• Collective redundancy protective award – doubling the maximum period of the protective award from 90 to 180 days pay
• 'Day 1' Paternity Leave and Unpaid Parental Leave 
• Whistleblowing protections 
• Fair Work Agency body established 
• Day One Statutory Sick Pay for all
• Simplifying trade union recognition process
• Electronic Workplace balloting.

Read in more detail here.

October 2026

• Fire and rehire reforms
• Bringing forward regulations to establish the Fair Pay Agreement Adult Social Care Negotiating Body 
• Introduction of the two-tier code for procurement
• Tightening tipping law
• Duty to inform workers of their right to join a trade union 
• Strengthen trade unions' right of access
• Requiring employers to take “all reasonable steps” to prevent sexual harassment of their employees 
• Introducing an obligation on employers not to permit the harassment of their employees by third parties 
• New rights and protections for trade union reps 
• Employment tribunal time limits extended from three to six months
• Extending protections against detriments for taking industrial action.

Read in more detail here.

Sometime in 2027

• Gender pay gap and menopause action plans (introduced on a voluntary basis in April 2026)
• Further rights for pregnant workers 
• Introducing a power to enable regulations to specify steps that are to be regarded as “reasonable”, to determine whether an employer has taken all reasonable steps to prevent sexual harassment 
• Blacklisting reforms
• Industrial relations framework 
• Regulation of umbrella companies 
• Collective redundancy – collective consultation threshold on business-wide redundancies
• Flexible working reforms
• Bereavement leave 
• Ending the exploitative use of zero hours contracts and applying the same measures to agency workers 
• Day One protection from unfair dismissal

Read in more detail here.

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Changes to the Employment Rights Bill

This month, the Government also announced some significant changes to the Employment Rights Bill.  There are some other amendments that have been proposed by peers in the Reading Stage, but as these are unlikely to have Government support, we concentrate on the Government proposals:

Bereavement Leave for pregnancy loss

The current right to parental bereavement leave currently only applies in the event of a stillbirth after 24 weeks of pregnancy or the death of a child before their 18th birthday.  The Government say they will now provide a right to one week’s bereavement leave in the event of:

• The ending of any pregnancy after less than 24 weeks (other than a live birth), or
• The failure of an embryo to become implanted following a transfer (an unsuccessful IVF transfer)

There is no current mention of this leave being paid.

Non-disclosure agreements

This is the change that received the most publicity.  The reforms will make void any provision in an agreement insofar as it seeks to prevent the worker from making an allegation of, or disclosure of information relating to, harassment or discrimination or the employer’s response to harassment or discrimination. There is reference in the proposal to “excepted agreements”, but no indication of what these will be.  The impression given by the Government’s announcement is that the traditional settlement agreement entered into with a departing employee will not be able to prevent a worker speaking about allegations of harassment or discrimination.

It remains to be seen whether there will be any watering down of these provisions or a wide category of “excepted agreements”, but if not, then these reforms could have a significant impact on the way in which employers approach discrimination complaints and reaching settlements with employees.

Day One Unfair Dismissal Rights

The House of Lords has, at the Reading Stage, rejected the Government’s proposals for Day One Unfair Dismissal rights, with an “initial employment period” of 3 – 9 months with reduced rights, and proposed instead simply changing the qualifying period for unfair dismissal from two years to 6 months.  For this to become law, either

• the Government would have to change its position and amend the Bill accordingly, although they would no longer be able to describe this as “Day One Unfair Dismissal rights”
• the House of Lords would have to go against convention and refuse to pass a law that implemented a manifesto promise

At the moment, therefore, we would report that there is “an element of uncertainty”, but that businesses should not assume that just because the House of Lords has proposed changes, there will not be day one unfair dismissal rights. We consider it more likely that some form of Day One Unfair dismissal right will be implemented in 2027.

Dismissal and re-engagement

The Government had announced that it would strengthen protections against the abuse of terminating and re-engaging employment contracts in order to implement changes to terms and conditions.  The original Bill does so by:

• Deeming an employee to be automatically unfairly dismissed if the reason for dismissal is
  • because the employee refused to agree to a variation to their contract of employment; or
  • to enable the employer to employ another person to carry out the same or substantially the same duties under a varied contract of employment

unless:

• • • The reason for the variation was to eliminate, prevent or significantly reduce financial difficulties which were likely in the immediate future to endanger the operation of the business as a going concern; or
    • In all the circumstances, the employer could not reasonably have avoided the need for the variation.

In response to representations by employers, the Government has now proposed amendments to these provisions as follows:

• Automatic unfair dismissal will only apply to proposed variations which are “restricted variations”, namely those that relate to pay, pension, hours or holiday (so other minor changes will not trigger automatic unfair dismissal).
• Where an employee is dismissed
  • Because they do not agree to an unrestricted variation (eg a variation that does not relate to pay, pension, hours or holiday); or
  • to enable the employer to employ another person to carry out, the same, or substantially the same duties with a contract variation that does not relate to pay, pension, hours or holiday

the dismissal will not be automatically unfair, but the Tribunal would have to consider whether it is unfair in the ordinary sense, taking into account:

• • • Any consultation carried out with the employee and/or trade union
    • Anything offered to the employee in return for the variation
    • Any other matters specified in the regulations
• The original wording referred to seeking to replace with employees on varied terms. It is proposed that this is changed to clarify that it also relates to employers seeking to replace individuals with non-employees doing substantially the same duties on different terms
• In recognition that the concept of “the operation of the business as a going concern” is not relevant to public sector employers, it is proposed to reflect this in amended wording that clarifies that in the public sector, there will be a defence to automatic unfair dismissal where the circumstances are that financial difficulties relate to the financial sustainability of carrying out the employer’s statutory functions or if the authority is subject to a “relevant intervention direction"

These changes might offer some comfort to employers who were concerned that under the original provisions, they would never be able to make any changes to employment contracts where employees did not agree, and to public sector employers who felt that the original wording was likely to prevent them ever making any changes at all other than by agreement. However, the changes are not drastic and there will still be a considerable restriction on employer’s ability to implement changes by way of termination and re-engagement.  For example, in a scenario where a shift change is proposed for 100 workers and 98 of them agree, a termination and offer of re-engagement to the two who do not agree would still appear to be an automatically unfair dismissal unless the employer can show that it could not reasonably have avoided the need for the shift change.