Employment Rights Bill: Latest updates

As many businesses will already be aware, the Government have proposed various reforms to the existing employment law framework (see our previous article for further details).
This article considers some of the latest updates to the Employment Rights Bill (ERB) and our comments on them.

More Delays to the Employment Rights Bill

As was widely anticipated, due to the sheer number and significance of some of the proposed reforms (as well as resistance from various Employer organisations), the Government have just announced that some of the reforms will now be delayed.

Subject to some further consultation on the finer details many of the reforms are now not expected to be implemented until April and October 2026, whilst other reforms are delayed until 2027. This is a long way from the Government’s much vaunted manifesto commitment to publish a new Employment Rights Bill within the first 100 days with the implication that it would become law shortly after!

Consultations on the flagship proposal which would allow employees to bring an unfair dismissal claim as a day one right (rather than after 2 years’ service under the current law) are expected to continue until early 2026 with the new right to become effective some time in 2027.

A summary of some of the key changes and expected implementation dates are detailed below:

April 2026:

• Protective award for collective redundancies – doubling maximum period
• Day 1’ entitlement to paternity and unpaid parental leave
• Statutory Sick Pay improvements (removal of waiting period and lower earnings limit)
• Establishment of a Fair Work Agency
• Simplified trade union recognition and digital/workplace balloting systems

October 2026:

• Ban on fire-and-rehire (see below)
• Launch of a Fair Pay Agreement Negotiating Body for adult social care
• Extending the duty on employers to take ‘all reasonable steps’ to prevent harassment in the workplace AND to further extend this so as also to protect employees from harassment by third parties (rather than just their colleagues or employer)

2027:

• Mandatory gender pay gap and menopause action plans (voluntary from April 2026)
• Additional Rights for pregnant workers
• Extending Bereavement leave to cover a wider group of persons (as opposed to just children under 18)
• Protections against zero-hour contract abuse
• ‘Day 1’ unfair dismissal rights

Latest updates to the Employment Rights Bill

Notable updates to the ERB announced by the Government in in July 2025 include:

A ban on the use of non-disclosure agreements (NDA’s) to prevent employees from reporting harassment and discrimination

An NDA is a contract (or contractual term) that prevents one or more parties from sharing certain information. The Government announced a new proposal under the ERB which renders a contract void when an employer attempts to prevent a worker from making allegations/disclosures about harassment or discrimination. This would apply to both contracts of employment AND settlement agreements.

This proposal acts as a further extension of the existing whistleblowing framework, which protects workers who make ‘protected disclosures’ e.g. about sexual harassment, providing the public interest requirement is met.

The new ERB proposal extends this protection to workers by:

• dispensing with the requirement to meet the public interest test; and
• banning agreements which prevent disclosure about how an employer responds to such an allegation (as well as the actual allegation/ disclosure itself).

It is not clear yet as to when exactly this new proposal is due to be implemented (likely some time in 2026) but in advance of it becoming effective employers will need to consider:

• Reviewing their contracts of employment and settlement agreements to ensure that they are compliant and do not attempt to ban any disclosures under the new proposals; and
• Review how investigations are carried out where these types of allegations/ disclosures are raised in the future as the ban for NDA’s also extends to how employers respond to such allegations. As part of this it would be prudent to review policies and ensure investigations are watertight if these proposals are approved.

Ban on fire and re-hire proposals weakened

The government have described the practice of terminating an employee’s contract and re-engaging them on new, less favourable terms as “the scourge of fire and rehire” and pledged to abolish both “fire and rehire” and “fire and replace” (where a new workforce is engaged to replace the old).

The practice of fire and rehire has received widespread negative press coverage in recent years following several high-profile cases. These included the dismissal of almost 800 employees by P&O Ferries in 2022, to be replaced by lower-paid agency staff, in addition to a case where Tesco (unsuccessfully) sought to use the practice to overturn preferential pay rates it had agreed on a “permanent” basis with staff who agreed to relocate.

The latest updates in respect of this proposal weaken the initial proposal by outlining that an automatic unfair dismissal will only arise if the employer dismisses an employee:
a) For failing to agree to a ‘restricted variation’. As currently drafted, this would only apply to a variation to terms involving pay, pension, working hours, timing/duration of shifts or a reduction in holiday entitlement); or
b) In order to re-engage an employee where one of more of the differences between the two sets of terms constitutes a ‘restricted variation’ but where the role is otherwise substantially the same.

However, businesses should still exercise caution and obtain advice if they are considering changing terms. It is anticipated there will be further consultation and therefore possibly further updates on this proposal.

How Morr & Co can help?

If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Employment team on 0333 038 9100  or email info@morrlaw.com and a member of our expert team will get back to you.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.