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Introduced by the new Labour government as part of its manifesto commitment to “Make Work Pay”, the Bill sets out the most significant reform of UK employment law in decades.
Its provisions will be introduced gradually throughout 2026 and 2027, and both employers and employees should prepare for substantial changes to workplace rights and obligations.
Here is a summary of some of the key changes that can now be expected:
One of the most notable changes is the reduction of the qualifying period for unfair dismissal claims from two years to six months. This means that employees will gain protection against unfair dismissal much earlier in their employment. In addition, the cap on compensation for unfair dismissal will be removed, creating the potential for significantly higher awards and more costly settlements. Employers will need to review their probationary processes and ensure that dismissal decisions are fair and well-documented.
From 2026, family-related rights will expand considerably. Paternity leave and unpaid parental leave will become available from day one of employment, and statutory sick pay will be payable from the first day of absence. Employees will also gain a new right to unpaid bereavement leave, including in cases of miscarriage. These changes will require employers to update policies and systems to manage leave effectively and support staff during sensitive periods.
The final Bill retains the recently introduced day-one right to request flexible working. Employers will still be able to refuse requests, but only on reasonable grounds, although the eight current statutory reasons permitting refusal will not change. This shift reflects a broader trend towards flexibility in the workplace and will require businesses to consider how they accommodate different working patterns without compromising operational needs.
The controversial practice of dismissing employees to impose new contractual terms, often referred to as “fire and rehire”, will be heavily restricted. From late 2026, dismissals for this purpose will generally be treated as automatically unfair unless a business is in severe financial distress. Employers will therefore need to be mindful of these timescales, and where change programmes are planned, explore alternative approaches and engage in meaningful consultation.
Non-disclosure agreements will also come under scrutiny. Clauses that prevent employees from speaking about discrimination or harassment will become void, reinforcing the importance of transparency and accountability in workplace culture.
The Act introduces reforms to industrial action and union rights. The rules around minimum service levels during strikes are likely to be removed, and dismissal for participating in lawful industrial action will become automatically unfair. Changes to the collective redundancy consultation requirements are likely to widen consultation obligations for employers, and new requirements are also due to be introduced to assist with access to trade unions. These changes underline the need for constructive engagement with employee representatives.
From 2027, zero-hours and low-hours workers will gain the right to a guaranteed hours offer based on their typical working pattern. The Bill will extend the existing law to require employers to take “all” reasonable steps, rather than just “reasonable steps” to prevent sexual harassment. Pregnant employees and those returning from maternity leave will benefit from enhanced protection against dismissal, which will be automatically unfair except in very limited circumstances. Employers should review workforce planning and ensure compliance with these new safeguards.
The final Bill will also extend the time limit to bring most Employment Tribunal claims from three months to six months, from October 2026. This could potentially lead to an increase in claims and a longer period of uncertainty as to whether a claim is likely to be received.
Although royal assent is now anticipated, many details will be clarified through secondary legislation in the coming months. For employers, these reforms bring both challenges and opportunities. Employers should begin by auditing existing policies, contracts, and procedures to identify areas requiring change. Training for managers will be essential to ensure compliance and avoid costly disputes by minimising risk and building trust. Employees, meanwhile, should familiarise themselves with their new rights and seek early advice on any difficulties at work where necessary.
For further information, advice or training, please contact Alice Kinderalicekinder@bexleybeaumont.com | 07526372580
