Unprecedented Employment Law Changes

Aisling McAuley

The long-anticipated Employment Rights Bill has now become law after receiving Royal Assent on 18 December 2025. There will be a gradual implementation of its provisions across the next few years. Solicitor Apprentice Aisling McAuley, part of our Employment team, takes a look at the changes.

There are some significant changes which have been debated. The key ones are:

1. Statutory Sick Pay from Day One: The current three-day waiting period and the lower earnings thresholds no longer apply, effective from 6 April 2026.
2. Flexible and Family-Friendly Working from Day One: Requests for flexible working arrangements become a day-one right. Paternity leave and unpaid parental leave will also shift to a right from a worker’s first day.
3. The controversial ‘fire and rehire’ practice will become an automatically unfair dismissal, taking effect from 1 January 2027.
4. Tighter regulation of zero-hours work: Employers using zero-hours contracts or agency/umbrella-company staff will face new obligations. This includes rights for regular hours, notice requirements for shifts, compensation for cancelled shifts and more rigorous agency work oversight. These changes are expected to come into force in 2027.
5. Stronger duties on equality, harassment prevention and transparency: A greater duty of care on employers including a stronger requirement to prevent sexual harassment (came into effect in October 2024), expand protections for pregnancy/maternity (expected in 2027) and more transparency.
6. Heightened record-keeping and reporting obligations: Employers will now be under an obligation to keep detailed records of holiday entitlement and pay. For larger businesses (250+ staff), there will be new gender-pay-gap action plans, menopause support and various other equality initiatives.

The scale and breadth of these changes are unprecedented. Some immediate concerns include an increase in administration, potential rises in payroll costs and the complexity of managing compliance across a diverse workforce.

The legislation may also be seen as an opportunity to modernise – to recast working practices. The shift towards transparency, flexibility and clarity around workers’ rights may enhance worker engagement and productivity. Only time will tell. 

There are various ways that employers should prepare:

• Update or draft workplace policies: harassment, flexible working, parental leave and whistleblowing procedures, for example.
• Audit existing contracts: especially zero-hours and agency arrangements.
• Begin thinking about equality action plans, reporting frameworks and employee welfare initiatives (e.g: menopause support).
• Review payroll systems ensuring they can support changes to SSP and the new rules on shift cancellation/compensation.

The legislation represents a huge shift in UK labour law. For employers, it brings additional responsibilities but also a chance to reset organisational practices in a rapidly changing world of work. Secondary legislation is expected throughout 2026 which will provide us with detail on how these changes will operate in practice. However, businesses that approach the changes pragmatically, start preparing early and react positively may emerge stronger with a more engaged and productive workforce.

If you would like more information on the changes, Aisling can be contacted on 01423 530630 or at [email protected].