November 2025: EAT lunch takeaways and Update

The Employment Rights Bill (ERB) is a substantial piece of legislation for both employers and employees that aims to strengthen workplace protections.

The Bill had been in the “ping pong” stage between the House of Commons and House of Lords on a number of specific matters, including:

Unfair dismissal protection

The Government proposed to make unfair dismissal protections a day-one right. This would repeal the two-year qualifying requirement employees currently need to bring an unfair dismissal claim.

Employers would still be able to dismiss employees during an “initial period of employment” by following a “light touch” process. The details of the length of the period and the actual process had not been provided.

The House of Lords continuously pushed back on this proposal instead proposing reducing the two-year waiting period to 6 months. After a further push back by the Lords, the Government agreed to a 6 month qualifying period. The result of which is that the change may come in earlier than late 2027.

In further developments, the Government proposed a new provision to remove the statutory cap on compensation which currently stands as £118,223, or a years’ gross salary, whichever is the lower. This was a brand new amendment and during the debate in the House of Lords on 10 December 2025, it was rejected. The ping pong therefore continued on this point only - see below.

Guaranteed hours

The Government proposed a duty on employers to offer qualifying workers (including agency workers) a contract for guaranteed hours reflecting the hours the worker actually worked over a reference period.

Any such contract must not be on less favourable terms and must accurately reflect hours worked. Employees can choose to accept or decline this offer. However, the employer’s duty is continuous meaning offers of guaranteed hours must be made after each reference period.

The parameters of the key terms of this proposal have not been set out and it is an incredibly complex proposal.

The House of Lords pushed back, initially proposing that employees can be given the right to request guaranteed hours, which was refused by the Government. The Lords then proposed that, where an offer had been made and rejected, the employee could opt out of any further offers. They also pushed for consideration of seasonal workers which will be heavily impacted by the changes. This was again rejected. On its return to the Lords on 10 December, the provisions relating to guaranteed hours were agreed and will therefore come into force once the ERB is passed.

Trade Union aspects

The ERB proposes that union members will be automatically opted in to making contributions to political funds unless they have expressly opted out. The Lords however proposed to retain the current position where members have to expressly request to opt-in. On 10 December 2025, following further debate and amendments by the Government to the way in which members would be able to opt out, this provision was passed.

Further changes that have been agreed are:

• Employment Tribunal claims – the time limit to bring a claim will increase from 3 months to 6 months.
• (In addition, the ACAS Early Conciliation period has already been increased from 6 to 12 weeks as from 1^st December 2025.)
• Ban on Fire and Rehire - It will be automatically unfair to dismiss an employee for refusing new contract terms, save for some limited exceptions or in specific circumstances.
• Statutory sick pay – SSP will be payable from day 1 of sickness, abolishing the current three-day waiting period. It will also be payable to all, with the lower earnings limit qualification also being removed.
• Shift notices and changes – Employees will have the right to reasonable notice of both a shift cancellation or change to a shift. They will be entitled to compensation if reasonable notice isn’t given. What will amount to reasonable notice and what compensation would be applied is yet to be defined.
• Maternity rights – These will be extended to provide protection from dismissal for any reason from notification of pregnancy to within 6 months of the employee’s return from maternity leave.
• Other family leave – Paternity and parental leave will become day-one rights. Notably, at present, entitlement to paternity pay has not changed, and employees will need to have 6 months’ service.
• (Parental) Bereavement leave – The entitlement will be widened to include pregnancy loss under 24 weeks and to encompass a more general right to leave for bereavement for “loved ones”. Under the general right, employees will be able to take unpaid leave for up to 1 week for each person who has died.
• Harassment – The Employment Rights Bill will increase employers’ obligations to take all reasonable steps to prevent all harassment, not just sexual harassment.
• Flexible working – Employers will be required to state not only which of the 8 statutory reasons they are relying on in rejecting any request for flexible working, but also why it is reasonable for them to rely on that reason.
• Trade Unions – Employers will be obliged to notify employees of their right to join a Trade Union, to provide access to that Union in the workplace and to allow that Union to communicate with employees.
• Collective consultation obligations – Where an employer fails to comply with their obligation to collectively consult, the compensatory award will be doubled to 180 days’ pay per employee.

The ERB went back to the Commons on 15 December on the final point of the removal of the statutory cap on unfair dismissal compensation.

After assuring the HL that an impact assessment on the removal of the cap on compensation would be published before the measure came into effect, the Bill was passed. It now awaits Royal Assent before becoming the Employment Rights Act .