Key Employment Law Changes HR and Legal Teams Should Monitor

Employment Law Changes

Following the 2024 general election, significant proposed reforms to UK employment law are making their way through Parliament. Many of these will have immediate relevance for employers, HR professionals, and in‑house legal teams. Below, we summarise the most important proposals, their potential impact, and steps you can take now to prepare.

Note: These reforms are still subject to amendment and parliamentary approval. The versions below represent the current proposals as of September 2025.

Overview of the Employment Rights Bill and Its Timing

The new government has made employment rights reform a central element of its legislative agenda, manifesting in the Employment Rights Bill.- While a number of the proposed changes will not come into force until 2026 or later, many will be subject to consultation as early as Autumn 2025.- Employers should treat this phase as a window for strategic readiness: auditing policies, assessing risk, and revising contractual templates.

Proposed Changes & Employer Impacts

Topic	Current Law	Proposed Change	Implications for Employers
Zero‑hour contracts	Employers may offer contracts with no guaranteed hours.	Workers would gain a right to a contract that reflects the hours they regularly work; guaranteed hours must be offered; reasonable notice of shifts and cancellations.	HR should review existing zero‑hour arrangements. In many cases, guaranteed hours contracts may become the default.
Fire and rehire / Dismissal & Re‑engagement	Employers sometimes dismiss and rehire workers on less favourable terms.	Dismissing employees for refusing new terms may be treated as unfair dismissal, unless changes are essential for business survival.	Before proposing contractual changes, employ robust consultation procedures and consider alternative options.
Parental leave & related rights	Parental leave (unpaid) currently requires one year’s service.	Parental leave and paternity leave rights would become day‑one rights; expansion of bereavement leave; protection for return to work mothers for six months.	Review existing parental leave policies; ensure your contracts and handbook reflect upcoming changes.
Statutory Sick Pay (SSP)	Right to SSP begins after several waiting days; eligibility is limited.	SSP would become a day‑one entitlement; also extended to agency workers and to those earning below the threshold.	Budgetary impact is a key consideration. Monitor guidance on the rate (proposed 80% of average weekly earnings or existing SSP rate).
Unfair dismissal rights 'from day one'	Employees gain unfair dismissal rights only after two years of continuous service.	Unfair dismissal rights would apply from the start of employment, with a lighter‑touch dismissal regime in an initial period (3–9 months).	Recruitment procedures, assessments, probationary practices, and dismissal records must be tightened to withstand early challenges.
Flexible working	Employees may request flexible working, typically after a period of service; employers can refuse for statutory reasons.	Right to request flexible working from day one; employers will need to show that refusal is reasonable.	Revise flexible working policies to accommodate early requests and improve clarity on refusal grounds.
Protection for new mothers	Pregnant employees are protected; redundancy protections apply during pregnancy.	Dismissal within six months of return from maternity leave would become unlawful.	Consider structuring return‑to‑work policies to mitigate risk, and ensure roles are held open or adapted appropriately.
Sexual harassment / liability	Employers are required to take 'reasonable steps' to prevent harassment; vicarious liability is well‑established.	The duty will change from 'reasonable steps' to 'all reasonable steps'; employer liability will extend for third‑party harassment unless fully mitigated. Compensation uplifts (e.g. 25%) are also proposed.	Revisit anti‑harassment policies, training, investigations, and contractual indemnities. Ensure third‑party interactions are covered under your risk assessments.

Risks for Non‑Compliance & Enforcement

Failure to align with new rules could expose employers to:- Employment tribunal claims and unfair dismissal suits- Fines, awards of compensation, and legal costs- Reputational damage and loss of trust among staff- Disputes arising from inconsistent contracts or policies

Action Plan: Preparing Your Organisation

1. Policy Audit & Gap Analysis – Review all employment contracts, handbooks and policies against the proposed reforms.

   
   

2. Risk Modelling & Budgeting – Estimate the financial impact of day‑one sick pay, expanded parental leave, and early dismissal rights.

   
   

3. Training & Awareness – Educate HR, managers and in‑house counsel on new consultation, dismissal and change practices, including robust documentation.

   
   

4. Amend Contract Templates – Build in flexibility to adopt changes in all new offers.

   
   

5. Communications Strategy – Develop clear communications for staff about any upcoming changes.

   
   

6. Monitor Legislative Progress – Keep track of consultation periods, draft regulations, and Parliament debates.

   
   

If you would like a customised compliance checklist or assistance adapting your employee documentation to these upcoming changes, Your Legal Team is ready to help.