Employment Rights Bill : A Guide for Small Businesses
UPDATED 18th March 2025
If you’re here, you already know that employment law is never boring—but let’s be honest, it can be a real headache. That’s where I come in.
The Employment Rights Bill is set to bring significant changes to UK workplaces, especially for small businesses. While it’s not law yet, and debates about its feasibility are ongoing, now is the time to start preparing. Acting early ensures you’re not caught off guard, even as details of the bill continue to evolve.
In this blog, we’ll explore what the Employment Rights Bill could mean for small businesses, the concerns raised about its practicality, and the steps you can take now to stay ahead. This blog will be updated regularly to keep you informed.
What Is the Employment Rights Bill?
The Employment Rights Bill UK is a proposed piece of legislation aimed at improving employee protections across the UK. While the bill has not yet become law, it’s sparking plenty of debate. Experts, including the Regulatory Policy Committee (RPC), have flagged concerns about whether the bill is “fit for purpose.” Despite this, it’s crucial for small businesses to prepare, as many of the proposed changes may eventually be implemented in some form.
Lets look at each of the areas in and give you the updates.
🚀 1. Unfair Dismissal: The Day-One Debate
👉 Where are we now?
Right now:
- Employees need two years of service to claim unfair dismissal.
- There’s no legal framework for probation periods—employers set their own rules.
So, if someone is let go before hitting two years, they’re out of luck unless the dismissal is discriminatory, linked to whistleblowing, or falls under an automatically unfair reason (like raising health and safety concerns).
👉 What was proposed?
- Employees would get a day-one right to claim unfair dismissal.
- Employers could still dismiss easily within the first nine months—but they’d have to follow a fair process.
The idea? More protection for employees while still giving businesses flexibility.
👉 What’s changed?
- Employers can’t bypass dismissal rules by calling it a redundancy.
- Employees can now request written reasons for dismissal, even in short-term roles.
This means businesses need to be more careful—managers will have to think twice before hitting the eject button too quickly.
👉 When’s it happening?
- Consultations in 2025, likely taking effect in Autumn 2026.
If you’re hiring, now’s the time to tidy up your probation processes.
🔥 2. Fire and Rehire: More Risk Than Ever
👉 Where are we now?
- Fire and rehire is technically legal but hugely controversial.
- Some businesses use it to force employees onto worse contracts—but it’s landed a few big names in trouble.
👉 What was proposed?
- Making it automatically unfair to dismiss someone for refusing new contract terms.
- Allowing it only in cases of genuine financial distress—and only with a proper process.
👉 What’s changed?
- No more interim relief—employees won’t get paid while waiting for a tribunal decision.
- Fines have doubled—businesses could be on the hook for up to 180 days’ pay if they get it wrong.
So, if you’re thinking about contract changes, make sure you have a solid business case—or it could get expensive.
👉 When’s it happening?
- Consultations in 2025, expected in 2026.
Thinking about restructuring? Get advice now.
📅 3. Redundancy Rules: More Admin, More Risk
👉 Where are we now?
- If you’re making 20+ redundancies at one site, you must go through a formal consultation.
- If you skip it? Tribunal claims and big fines (up to 90 days’ pay per employee).
👉 What was proposed?
- The 20-person rule would apply across all locations—not just per site.
- The fine for non-compliance would increase from 90 to 180 days’ pay.
👉 What’s changed?
- The government is still debating how the 20-person threshold should work—it might be based on a percentage of total employees instead of a fixed number.
👉 When’s it happening?
- No firm date yet, but likely 2026.
If your business operates across multiple sites, this could have a big impact—so stay informed.
⏰ 4. Zero-Hours Contracts: No More Guessing Games?
👉 Where are we now?
- Zero-hours contracts give businesses ultimate flexibility—but leave workers stuck in limbo.
👉 What was proposed?
- If someone works regular hours for 12 weeks, they must be offered a fixed contract reflecting those hours.
👉 What’s changed?
- Agency workers are now included—so end hirers must offer guaranteed hours too.
- There’s still debate over what counts as “low hours”—some industries might get exceptions.
👉 When’s it happening?
- Expected in 2026.
If you rely on zero-hours contracts, start planning now.
📌 What’s Been Shelved?
Not everything made the cut. Some proposals have been delayed, downgraded, or quietly scrapped.
- Menopause Action Plans – No legal requirement, just “recommended best practice.”
- Ethnicity & Disability Pay Gap Reporting – Might happen later, but for now, it’s not mandatory.
- Ban on Unpaid Internships – Instead of a ban, the government is just “gathering evidence” (which means… probably nothing for now).
- Right to Switch Off – The proposed work-life balance protections have vanished completely.
If you were hoping for big changes in these areas, don’t hold your breath.
🚀 Final Thoughts: Get Ahead Now
Yes, these changes are big. But the good news? You have time. Most won’t kick in until 2026, so start preparing now and avoid last-minute panic.
Here’s where to start:
✔ Review your contracts & policies – Especially probation rules, redundancy procedures, and shift scheduling.
✔ Sort out your record-keeping – Holiday pay tracking must be watertight.
✔ Stay updated – Some details are still up for debate.
✔ Communicate with employees – Get ahead of questions before they start rolling in.
And if you need help figuring all this out? That’s what I’m here for.
Find out more about the Employment Rights Bill on my podcast below or just get in touch.
