The Employment Rights Bill is the government’s flagship labour law reform. It outlines major reforms to UK employment law and is currently in its final parliamentary stage. It has passed the House of Lords and returned to the Commons for consideration of amendments.
The government hopes that the Bill will pass through Parliament by Christmas. If so, Royal Assent is expected in early 2026, with implementation phased through 2026 and 2027.
This newsletter highlights the main changes, expected commencement dates, and the steps employers should take.
Key Reforms and Timeline
The government’s roadmap identifies three main phases of change: April 2026, October 2026, and some time in 2027.
- April 2026: Enhanced statutory sick pay (with no waiting days and wider eligibility); day-one parental leave rights; and the creation of a Fair Work Agency to inspect workplaces and issue fines.
- October 2026: A ban on ‘fire and rehire’ in defined cases; new duties to prevent workplace harassment (including third-party harassment); and extended tribunal time limits from three to six months.
- 2027 was expected to bring the most important reform, to the amount of service required to bring a claim of mainstream unfair dismissal (which is currently two years). As at the time of this Newsletter, the latest report is that a change may come in 2026, however. It was expected to be a ‘day one’ right with no qualifying period but, in a last-minute change, the government has just announced that there will be a qualifying period after all - and it will be six months. Automatically unfair dismissal claims, such as those relating to whistleblowing or health and safety, are not affected and will remain a day-one right.
- A new proposal would change compensation for mainstream unfair dismissal: it will no longer be subject to a cap of a year’s pay, though it will still be subject to an overall cap (currently £118,223). It is not yet clear when this would become law.
Recent Developments
The Bill introduces the concept of ‘restricted variation’ which defines which contractual changes can trigger the new dismissal protections. Only specific alterations, such as reductions in pay, working hours or pension contributions, will be covered. Employers will also be barred from replacing dismissed workers with agency staff when seeking to impose contractual changes.
In November 2025, the Government launched four consultations on:
- Trade union access to workplaces
- Enhanced protection for pregnant women and new mothers
- Bereavement leave and pay
- Dismissal procedures during the initial employment period.
These consultations close between December 2025 and January 2026, and their outcomes will help shape the regulations that will emerge in these areas. Participation in the ongoing consultations will enable employers to shape the final rules.
Implications for Businesses
Businesses should prepare for a tighter regulatory environment from 2026. Day-one rights for sick pay and parental leave will increase compliance obligations, while higher penalties are expected for redundancy and harassment breaches.
The end of the two-year unfair dismissal threshold will be the most significant change for decades and will require more careful management of performance and disciplinary issues earlier in employment.
The new Fair Work Agency will have the authority to investigate and issue fines. Firms should review their policies on pay, leave, consultation, and shift notices.
Impact on Employees
Employees will benefit from stronger job security, wider access to sick pay, and greater protection from unfair treatment and exploitative contract changes.
But the exact timing of these new rights will be staggered and depends on secondary legislation.
How 3CS Can Help
3CS can help your organisation prepare for the Employment Rights Bill through tailored policy reviews, training, and compliance support.
Contact 3CS today to ensure your business is prepared for the upcoming reforms.
