Employment Rights Bill – What’s changing?

On 13 March 2025, Flexhuis and JMW Solicitors hosted an event examining the upcoming Employment Rights Bill and its impact on UK businesses. The session was led by Paul Chamberlain, Partner and Head of Employment at JMW Solicitors, who provided a comprehensive overview of the key changes and what employers need to prepare for.

What’s not included in the bill?

Paul Chamberlain first addressed what the Employment Rights Bill does not cover, clarifying that certain anticipated reforms are not part of the legislation:

No ‘right to disconnect’ – there will be no legal obligation for employers to allow workers to switch off outside of working hours.

No changes to equal pay reporting – pay-gap reporting requirements will remain unchanged.

No employment status overhaul – earlier proposals to simplify employment status into two tiers (employed vs. self-employed) have been dropped.

Parental leave, carers leave, and TUPE reforms – these topics are being considered in wider policy discussions but are not included in the bill.

Key changes in the bill

The session then covered the most significant changes employers will need to navigate:

Statutory Sick Pay (SSP) reform

SSP will become a legal right for all workers, removing the lower earnings limit that previously excluded low-wage employees.

An estimated 1.3 million low-paid workers will now be eligible.

New calculation method: SSP payments will be 80% of a worker’s average weekly earnings or the statutory rate of £118.75 per week (from April 2025), whichever is lower.

Zero-hours contracts – Stronger worker protections

Employers must offer guaranteed hours to workers after a certain period.

Reasonable notice must be given for shift scheduling.

Compensation required if shifts are cancelled at short notice.

Responsibility for compliance is shared between the end hirer and employment agencies, with agencies allowed to reclaim costs where contractual agreements exist.

Fire & rehire – Stricter rules

Dismissing an employee for refusing a contract change will now be automatically unfair.

The only exception is if the employer is on the verge of financial collapse and has no alternative.

Further consultations planned to strengthen remedies for affected employees.

Umbrella companies – Increased oversight

New regulations to prevent exploitation of workers engaged through umbrella firms.

Employers must ensure greater transparency in contracts and payment structures.

Neonatal Care Leave & Pay Act (Effective 6 April 2025)

Neonatal pay will become a day 1 right for employed parents of babies who are admitted into neonatal care.

They will be entitled to take up to 12 weeks of leave.

Pay will be either the statutory rate or 90% of weekly earnings, whichever is lower.

Employers must update policies and contracts to reflect this new right.

Employer impact & Next steps

Paul Chamberlain emphasised that this is one of the most significant shifts in UK employment law in decades, with many changes not taking effect until 2026. However, the Employment Rights Bill remains subject to change as it moves through Parliament, so businesses must remain vigilant and adaptable.

Failing to prepare could lead to:

Costly tribunal claims if employers do not comply with the new rules.

HR and management strain, as organisations adjust policies and contracts.

Reputational risks, particularly around zero-hour contracts and fire & rehire practices.

Final takeaways

The session underscored the importance of staying informed and updating employment policies in advance of these changes. The Employment Rights Bill will continue to evolve, and businesses must ensure they are compliant to avoid financial and operational risks once the new laws come into force.

If you have further questions about the upcoming changes to employment law, you can contact Paul directly at paul.chamberlain@jmw.co.uk

March 14, 2025