Oct 2025 – Employment Rights Bill: What don’t we know?
The Employment Rights Bill promises sweeping reform of British employment law, yet many important details remain uncertain. This article highlights 7 key areas of uncertainty, why these matter to employers and expected next steps.
The Employment Rights Bill (ERB) is scheduled to return to Parliament this week, where it will undergo further scrutiny and debate. The House of Lords has proposed several significant amendments, including changes to the proposed “day one” right to claim unfair dismissal. The House of Commons will need to consider which of these (if any) to accept. Once the final version is agreed, the ERB will receive Royal Assent and become the Employment Rights Act. However, many of its provisions are not expected to take effect until at least 2026 and some are expected to be delayed until 2027. As a result, employers face a prolonged period of uncertainty and will need to monitor developments closely.
This article highlights 7 areas where the ERB remains silent or very high level, leaving employers without the clarity they need to prepare for the upcoming changes.
One – Day one unfair dismissal
Abolishing the current two-year qualifying period for unfair dismissal is probably the single most impactful part of the ERB, but key details are still unknown. The ERB provides for a “light touch” procedure during an initial period of employment, but key uncertainties include:
- The duration of the “initial period”. The government has expressed a preference for nine months.
- What will the “light touch” dismissal process entail, and how will it interact with the ACAS Code?
This is a fundamental change to employment law that will affect all employers and employees. Implementation is expected in 2027.
Two – Collective redundancy
The ERB introduces a new test for when collective redundancy consultation is required, and changes to the maximum penalty for not complying. Key uncertainties:
- What criteria will apply under the new threshold test for triggering collective consultation, where redundancies are proposed across multiple sites rather than at a single establishment?
- Will the minimum consultation period for 100 or more redundancies be increased from 45 to 90 days?
These factors will significantly impact the cost, complexity, and timing of redundancy exercises. Getting the collective consultation process wrong can be extremely costly for employers, especially with the increase in penalties. Whilst the additional threshold test for collective redundancies is expected to be introduced in 2027, the change to the protective award will take effect much sooner.
Three – Protection for employees who are pregnant or on/returning from family leave
The ERB contains a power for the government to introduce regulations restricting the dismissal of maternity returners, and employees who are pregnant or on/returning from family leave. Key uncertainties include:
- In what circumstances (other than redundancy) will dismissals be permitted during pregnancy, maternity leave (or other types of family leave), or following return to work?
- What evidence will employers need to produce to dismiss lawfully?
This is significant as this will impact a large number of employees and employers. Meeting these requirements could be quite complex (particularly in larger companies) and employers will need to make sure their systems and processes are fit for purpose. Further consultation is expected in autumn 2025, with the measures then taking effect in 2027.
Four – Ban on non-disclosure agreements covering harassment and discrimination
A new NDA ban was added to the ERB late in the process, but the key details remain unclear, including:
- Definition of “excepted agreements” where the ban does not apply.
- When will the ban come into effect, given the lack of a published implementation target date?
The new provisions will have a major impact on the settlement of harassment and discrimination allegations as well as for confidentiality wording in contracts, policies and settlement agreements.
Five – Fair Work Agency
The ERB establishes a new state body responsible for enforcing employment law, to be called the Fair Work Agency (FWA). Key uncertainties include:
- How long before the FWA is fully up and running?
- What approach will the FWA take to enforcement?
This reform is particularly consequential as the FWA’s remit will extend to holiday pay. Holiday pay is not currently subject to state enforcement, applies to all workers and is notoriously difficult to calculate correctly.
The FWA is expected to launch in April 2026, but it is uncertain how long it will take for it to become fully functional.
Six – Duty to take “all reasonable steps” to prevent workplace sexual harassment
The bill strengthens the existing duty to take reasonable steps to prevent sexual harassment and makes employers liable for harassment by third parties. Key uncertainties:
- What constitutes “all reasonable steps”?
- Will compliance with the latest EHRC guidance be sufficient, or will employers be expected to take additional measures?
This issue is significant as it potentially affects all workplaces and employers and often comes up in practice.
The call for evidence closed on 30 June 2025, with the obligation expected to take effect in October 2026.
Seven – Equality action plans (impacts employers with 250+ employees)
Employers in scope of this new requirement will need to publish action plans covering their plans to address their gender pay gaps and support employees through the menopause. Key uncertainties include:
- What specific information will be required in “equality action plans” relating to gender equality?
- What penalties will apply for non-compliance?
These measures will be introduced on a voluntary basis in April 2026, before mandatory compliance is required in 2027.
What’s next?
The ERB represents the most significant reform of British employment law in decades but many of the crucial details are unknown. As has been widely pointed out, the rush to get the Bill introduced to Parliament has meant that it is very high level in places, with gaps to be filled in by implementing regulations. The upcoming consultations are expected to provide greater clarity. In the meantime, we recommend that employers monitor the ERB’s progress and be ready to prepare for the changes ahead.
If you have any specific questions you would like advice on or if you would like information about what is discussed in this article, then please contact: Abi.Frederick@lewissilkin.com of Lewis Silkin LLP.