Employment Rights Bill Returns to Parliament

The UK’s Labour market is in the middle of a major stir as the Employment Rights Bill returns to the House of Commons after a round of amendments in the House of Lords. This legislative struggle signals that the future of employment law is being reshaped.

What’s at stake

Several headline reforms are driving this change:

• A proposed right to unfair dismissal from day one of employment (though this was rejected in the Lords, and will now be debated further).

• New requirements around guaranteed hours for workers moving off zero-hours contracts - including amendments to give employees more choice and flexibility.

• Maintenance of higher thresholds for industrial action ballots, and stronger protections around employment contracts and fair pay standards.

  
  

What’s clear is that the Bill is entering a “ping-pong” stage bouncing between the Commons and Lords until agreement is reached. Until then, uncertainty remains.

Why this matters for employers

The pace of change may be slower than some hoped for, but the direction of travel remains the same. Employers should view this period not as a wait-and-see moment, but as a preparation window.

• Day-one dismissal risk: If protections are introduced, every new hire from day one would have unfair dismissal rights, meaning onboarding, performance management, and exit procedures must be rock solid.

• Guaranteed hours: If employees moving off zero-hours must be offered guaranteed hours, employers will face more administrative complexity - tracking opt-ins/outs, managing offers, and documenting choices.

• Union and industrial action changes: Higher complexity of union engagement may mean businesses need stronger processes and clearer communication strategies.

Proactive steps for organisations

While the exact legal text is still being finalised, employers can act now to reduce risk and avoid being caught out when the Law changes. Key actions include:

1. Review all employment contracts - especially for new hires and zero-hours workers. Ensure terms are clear, consistent, and up to date.

2. Audit HR and dismissal procedures - make sure performance management, probationary terms, and dismissal documentation meet best-practice standards.

3. Update onboarding and induction - new hires must know their rights, how performance is managed, and how dismissals or contract changes are handled.

4. Train managers - ensure your team understands proposed changes and potential implications, so decisions today don’t become liabilities later.

5. Track the timeline - keep close to Government guidance and parliamentary updates so you know when each reform is likely to come into force.

What this means for SMEs

While this sort of legislation often feels more relevant to large businesses, small and medium-enterprises (SMEs) must pay attention too. A shift in dismissal qualifying periods or contractual rights will impact all employers - regardless of size. Managing risk early can save dispute costs, reputational damage, and uncertainty.

Why acting early is smart

Waiting for the final Act may seem safe, but in reality, organisations that start now will be much better placed to implement change with minimal disruption. Policy updates, manager training, contract review and communication plans all take time - the sooner they begin, the smoother the transition.

At a time when workforce flexibility, fairness and stability are all under the spotlight, the Employment Rights Bill acts as both a challenge and an opportunity for employers. Those who prepare early will not just adapt, they will stand out.

DCG can support businesses by reviewing documentation, delivering tailored manager training, and ensuring HR policies meet new legislative changes. Contact us today for a free, no-obligation chat about how we can support you.