What's Happening?
The UK Parliament has passed the Employment Rights Bill (ERB), which introduces significant changes to employment laws, including unfair dismissal rights, sick pay, and whistleblowing protections. The bill,
now the Employment Rights Act 2025, received Royal Assent and will be enacted immediately. Key reforms include extending day-one rights for workers, such as statutory sick pay and paternity leave, and new protections for pregnant women and new mothers. The bill also shortens the qualifying period for unfair dismissal protection and introduces changes to industrial action rules. HR departments are advised to update policies and contracts to comply with the new legislation.
Why It's Important?
The passage of the Employment Rights Bill represents a major shift in employment law, affecting both employers and employees. The reforms aim to enhance worker protections and rights, potentially impacting hiring practices and business operations. Employers may face increased scrutiny and financial risks, particularly small businesses, due to changes in dismissal compensation and industrial action rules. The bill's implementation could influence the labor market, with potential effects on job recovery and economic momentum. HR professionals will play a critical role in navigating these changes, ensuring compliance and adapting to the evolving legal landscape.
What's Next?
As the Employment Rights Act 2025 takes effect, HR departments must proactively update their policies and procedures to align with the new regulations. Employers will need to assess the financial and operational implications of the reforms, particularly regarding dismissal compensation and industrial action. The government may introduce additional secondary legislation to address practical aspects of the bill, requiring ongoing attention from HR professionals. The changes could also prompt discussions on labor rights and business practices, influencing future legislative developments and employer-employee relations.
