Employment Rights Bill: the timeline from autumn 2025 onwards

In practical terms, the legislation – one of the central pillars of the Labour government’s 2024 election manifesto – will require employers to update their employment contracts, policies and practices. Employers will need to affect changes around pay, flexible working and employee rights, including rights to sick pay, and to protection against unfair dismissal. Other reforms will impact how they manage industrial relations, address the gender pay gap, support employees through the menopause, and protect against the risk of sexual harassment.

Below, we take a look some of the big issues in the Bill that UK law makers still have to resolve, the government’s intended timeline for further consultation on some of the new measures, and how the tight parliamentary timetable for finalising the legislation could impact how much time employers are given to prepare for the changes before they are implemented.

A separate package of employment law reforms is planned in Northern Ireland.

The Bill’s current status

The Employment Rights Bill was introduced into the UK parliament on Thursday 10 October 2024, honouring an election pledge given by the Labour government to set out the Bill within 100 days of coming to power. Since then, the Bill has been subject to scrutiny in the government-dominated House of Commons as well as the unelected house, the House of Lords.

The Bill passed through the Commons earlier this year. It has now reached the third reading stage in the Lords. The third reading is scheduled to take place in the first week after parliament returns from its summer recess, on Wednesday 3 September.

Issues to be resolved

There is significant unease about the implementation of the Bill from within British industry, amidst concerns over additional costs and administrative burdens. Those concerns have been relayed by several UK law makers in parliament and are reflected in amendments that the Lords have proposed.

Two examples of issues where there are differences between the position taken by the government and that taken by the Lords are on proposed changes to unfair dismissal rights and in relation to planned new rights to minimum guaranteed hours.

The government wants to make the right to raise a claim for unfair dismissal a ‘day one’ right. Under its plans, the unfair dismissal right will be subject to the ability to dismiss during a probationary period if a “lighter-touch” process is followed by the employer. This is an area for consultation, including the length of that initial statutory probation period. The government has stated its preference in this regard is nine months. 

In contrast, the position taken by the Lords is that the right to claim unfair dismissal should only take effect after employees have completed at least six months’ service.

On rights to minimum hours, the government believes people should be able to remain on zero-hours contracts where they prefer to but wants to ensure those workers have a right to a contract that reflects hours regularly worked and are given reasonable notice of changes in shifts and compensation for shifts cancelled or curtailed.

In this respect, its position is that employers must offer workers minimum hours where their average hours worked goes beyond their contracted hours – even if the employee doesn't seek an uplift in hours. This proposed measure forms part of the government’s pushback against “exploitative” zero hours contracts.

For many employers, a new right to minimum hours based on an average hours worked calculation would entail continuous monitoring of hours worked, which can vary over time, and bring associated costs and administrative burdens. The Lords amendments seek to ensure that the right to uplift of guaranteed minimum hours should only apply where the employee actually requests this – which would reduce the administrative burden on employers.

There are a raft of other amendments that have been tabled since the Bill was introduced into parliament last October, some of which have been brought by the government itself.

Those amendments include a proposed ban on the use of non-disclosure agreements in cases of harassment or discrimination, subject to exceptions still to be confirmed. They also include the proposed addition of bereavement leave as a ‘day one’ right and a ban on ‘fire and rehire’ practices. A new provision has also been added to the draft Bill which, once implemented, will make it automatically unfair to dismiss an employee where they are to be replaced by “an individual who is not an employee of the employer”.

The parliamentary timetable

After a difficult first year in office, the government will be seeking a shift in narrative when the summer parliamentary recess ends on Sunday 31 August. Getting its Employment Rights Bill onto the statute book before parliament breaks again for the autumn party conference season is likely to be high on its agenda.

With differences between the positions of the government and the Lords still to be resolved, the Bill is set to enter into a period of parliamentary ‘ping-pong’ once the Lords completes its third reading which is scheduled for Wednesday 3 September. In ping-pong, bills are passed between the Commons and Lords until such time as there is agreement between the houses on their wording.

With parliament scheduled to break up again on Friday 19 September, there is only a small window for the government to get the Bill through in time ahead of the Labour party conference, which is taking place in Liverpool between 28 September and 1 October.

Our expectation is that the government will make the time in parliament for the Bill to complete the ping-pong stage before conference recess kicks in. While the government may need to make some concessions to the Lords in order to get the Bill through in that time, parliamentary and constitutional convention is that the Lords give way to the wishes of the elected government of the day after a couple of rounds of ping-pong. This is especially the case where the government is acting on a manifesto commitment, as it is with this Bill.

What next?

Much of the Bill serves as mere framework legislation for secondary implementing regulations and statutory codes of practice to follow, where the reforms will be set out in more detail. The government has also set out a roadmap for implementation (12-page / 1.13MB PDF), which is to be done in phases, providing employers with early sight of when it expects the various different reforms will take effect.

It is unclear whether the government will adapt its planned timeline for implementation of some or all of the different parts of the Bill if the legislation is held up in parliament.

Below is a comprehensive list of forthcoming developments that employers should look out for, based on the government’s proposed roadmap and parliamentary developments to-date.

An indicative timeline for employers