9 all-important FAQs on the Employment Rights Bill

From what it is, to when it's expected to come into force, to changes to sick pay and redundancy; we've answered the key questions on the Employment Right Act (formerly the Employment Rights Bill) here.

The Employment Rights Bill is changing a number of things, especially for those working in the retail sector. But what are the key things independent retailers need to know?

We've put together 9 commonly asked questions and answered them in bitesize chunks, with the help of legal experts and Bira Legal partner WorkNest, getting straight to the point for small businesses that need a quick breakdown.

• What is the Employment Rights Act 2025?
• When will the changes from the Employment Rights Act take effect?
• How does the Act affect unfair dismissal claims?
• What changes are being made to zero-hours contracts?
• How is Statutory Sick Pay (SSP) affected by the new legislation?
• What new rights do parents have under the Bill?
• How does the Act address workplace harassment?
• Will there be changes to redundancy consultation processes?
• How should retailers prepare for these changes?

1.  What is the Employment Rights Act 2025?

The Employment Rights Act 2025 is legislation introduced by the Labour Government aiming to enhance worker protections, improve job security, and reform various aspects of employment law in the UK.

2.  When will the changes from the Employment Rights Act take effect?

On 16 December 2025, the Bill finally concluded the ping pong between the House of Commons and the House or Lords, with both agreeing to the contents of the Bill.

The Bill received Royal Assent on 18 December 2025, with the changes to be introduced gradually and staggered over the upcoming years. It is now known as the Employment Rights Act 2025.

As the Act progressed through Parliament, the expected timing for its provisions to take effect shifted. Although many provisions were originally anticipated to come into force later in 2025, delays in consultation and implementation mean that these changes may now be introduced at a later date. Retailers should continue to track the Act's development to ensure they are prepared for compliance once the new measures are implemented.

When the Bill was first published, the government’s “Next Steps” document indicated that some of the central reforms, such as the introduction of unfair dismissal as a day one right, would not be implemented until at least autumn 2026, to allow sufficient time to finalise the details. However, the  Implementation Roadmap states that public consultation will now begin in summer 2025, with the intention for further regulations to be introduced in 2027.

What happens next? Keep an eye on the Bira Hub for regular updates and the government website as there are still consultations ongoing and more to come.

The governments roadmap contains the timeline for implementation, but there are no substantial changes to take effect prior to April 2026.

3.  How does the Bill affect unfair dismissal claims?

The Act has finalised, and this provision has altered significantly. The final rules on unfair dismissal rules include:

• The House of Lords proposal to scrap the “Initial Period of Employment” phase and make unfair dismissal a day one right, was accepted.
• The rules are more straightforward, in that the qualifying service to raise this claim will change from 2 years to 6 months.
• ETA – employees who have six months qualifying service on 1 January 2027.
• The Act removes the statutory power to change the qualifying period by order.
• This means future changes will be harder to pass and must be made through primary legislation.
• Compensation cap on unfair dismissal to be removed.
• Currently it is either 52 weeks gross salary or a statutory cap set at £118,223 (whichever is lower).

We are unsure on the implementation date, but it could align with the introduction of the 6 month qualifying service to raise the claim (1 January 2027).

4.  What changes are being made to zero-hours contracts?

The Act has finalised, and the final rules on zero hours and minimum hours workers include:

• Employers will need to make an offer of guaranteed hours to a qualifying worker after the end of the reference period (if the hours regularly worked exceed the minimum number set out in their contract).
• Reasonable notice of a shift, of a shift being changed and cancelled.
• This has been extended to agency workers.
• The House of Lords amendment to make this a right to request guaranteed hours, as opposed to have them did not make it into the final Act.
• Late amendments require regulations allowing potential exceptions to the duty to offer guaranteed hours, balancing the benefit to the workers who receive the offer, against preventing the guaranteed hours regime from having  a “significant adverse effect” on employers facing “exceptional circumstances.”
• This can be contracted out of, with a collective agreement reached through a Trade Union, so long as the terms are included within the contract.

What happens next? The key details—such as eligibility criteria and the length of the reference period—will be defined in future regulations and are yet to be determined.

According to the Roadmap, these measures (including their application to agency workers) will take effect in 2027.

5.  How is Statutory Sick Pay (SSP) affected by the new legislation?