What You Need to Know About the Proposed Changes to Employment Rights in the UK

Enhanced Protections Against Unfair Dismissal

Day-one rights: Employees will gain protection from unfair dismissal from their first day of employment, removing the current two-year period.

Not expected to change before autumn 2026 for employer preparation.

Probation periods: Employers may implement ‘initial periods of employment’ (up to 9 months) with simplified dismissal processes during probation, subject to consultation.

Restrictions on ‘Fire and Rehire’ Practices

Dismissing employees to rehire them on inferior terms will be deemed automatically unfair unless critical for business survival. Employers must follow a statutory code of practice.
From 20th January 2025, tribunals can increase protective awards by 25% for non-compliance with the code.

Zero-Hours Contract Reforms

Employers must offer guaranteed hours to workers regularly exceeding contracted hours, based on a 12-week reference period.
Compensation required for cancelled or shortened shifts.

Harassment and Discrimination Protections

Employers must take ‘all reasonable steps’ to prevent sexual harassment, with liability extended to third-party harassment.
The Draft Equality (Race and Disability) Bill proposes mandatory ethnicity and disability pay gap reporting for employers with 250+ staff, likely effective from 2026.

Flexible Working Rights

Flexible working becomes a ‘default’ right from day one, with employers required to justify refusals.
Employees can request flexible arrangements (e.g. remote work, adjusted hours) from day one.

Parental and Bereavement Leave

Enhanced rights for carers and parents, including neonatal leave (12 weeks paid leave for parents of babies requiring neonatal care, potentially effective April 2025)
Enhanced Maternity Protections: Dismissing pregnant employees or those within 6 months of returning from maternity leave is automatically unfair, except in extreme cases.
Paternity Leave: Paid leave available from day one (previously required 26 weeks’ service)
Unpaid Parental Leave: Immediate access for childcare needs.
Bereavement Leave: New statutory right to paid leave for all employees, regardless of dependent status.

Statutory Pay and Leave Changes

Day-one entitlements: Immediate access to statutory sick pay (SSP), parental leave and bereavement leave.
SSP reforms: Removal of the lower earnings limit and four-day working period.
Employers face higher costs but improve worker financial securiy during illness.

Wage Increases (Effective April 2025)

National Living Wage (21+): £12.21/hour (6.7% increase)
National Minimum Wage:

18–20-year-olds: £10/hour

126-17-year-olds: £7.30/hour

Future Reforms (2026 Onward)

Right to disconnect: Legislation to limit after-hours work communications, pending consultation.
Single worker status: Merging employee and worker categories into a single status.
Equal Pay extensions: Expanding equal pay rights to cover race and disability.

Potential Implications for Employers

Policy Updates: Revise probationary periods, dismissal process and sick pay systems.
Cost Increases: Higher SSP costs and potential litigation risks from day-one dismissal rights.
Compliance: Prepare for the Fair Work Agency (2026), consolidating enforcement of pay, holiday rights and harassment protections.
Training: Equip managers to handle flexible working requests and sickness absences empathetically.

What should employers be doing?

Review zero-hours contracts and shift scheduling practices.
Update harassment prevention policies and training.
Prepare for increased wage costs and neonatal leave provisions.
Engage with 2025 consultations and probation periods, pay gap reporting and dismissal processes.

Key Dates for the Diary:

April 2025: SSP reforms and zero-hours contract changes take effect.

Autumn 2026: Day-one unfair dismissal rights and Fair Work Agency Launch.

Most significant reforms, including day-one unfair dismissal rights and pay gap reporting are deferred to 2026 to allow for employer preparation and consultations. For ongoing updates, monitor the Employment Rights Bill’s parliamentary progress and consult law specialists to ensure compliance.