Navigating Employment Law Changes in 2025: A Six-Step Guide for U.K. Employers

• The U.K.’s Labour government has introduced the Employment Rights Bill, which includes 28 reforms to strengthen worker protections and business practices, with most provisions taking effect in 2026.
• The bill introduces sweeping changes, including abolishing exploitative practices, providing day-one rights for dismissal and leave, making flexible working the default, expanding sick pay, and enhancing support for working families.
• To ensure compliance with U.K. employment law changes, HR managers must be proactive by reviewing existing policies, training staff, revising systems, and conducting regular audits.

Newly elected governments often usher in sweeping legislative changes, and the U.K.’s Labour government is no exception. 

This October, they introduced the Employment Rights Bill, marking a significant transition to employment laws aimed at strengthening economic security and worker protections across the country. This landmark bill will overhaul worker rights and business practices through 28 individual employment reforms.

Additionally, the government will create a Fair Work Agency to enforce the new rights and assist employers with legal compliance. 

Businesses will have reasonable time to prepare for these reforms, with most provisions not expected to take effect until 2026.

5 Key Changes within the U.K. Employment Rights Bill:

1. Ending Exploitative Practices

The bill will abolish zero-hour contracts and fire-and-rehire practices, guarantee hours for regular workers, impose stricter penalties for wage non-compliance, introduce mandatory sexual harassment policies, and expand whistleblower protections to include a broader range of disclosures.

2. Day-One Rights

The bill introduces protections from unfair dismissal from the first day of employment and establishes rights to parental, paternity, and bereavement leave from day one.

3. Flexible Working

Flexible working becomes the default unless proven unreasonable; employees can request flexibility from day one, requiring employers to respond within two months.

4. Strengthening Sick Pay

Statutory sick pay will be expanded by extending eligibility to workers earning below the lower earnings limit and removing existing waiting requirements.

5. Support for Working Families

The bill will extend parental leave entitlements (including increasing paternity leave from two to four weeks), improve pay for shared parental leave (aligning it closer to maternity pay levels), and introduce carer’s leave.

Broad Support for the Bill

These reforms are expected to create fairer, more productive work environments by enhancing pay, productivity, job security, and overall working conditions. 

Both U.K. business leaders and employee groups view the bill as a significant step towards strengthening worker protections and improving business performance, with a strong emphasis on flexible and fair employment practices.

The bill has received support from prominent figures, including Shirine Khoury-Haq, CEO of the Co-op Group, who commends its policies supporting women, parents, and carers. 

Paul Nowak, Secretary General of the Trades Union Congress, appreciates the focus on secure jobs and higher employment standards. 

Additionally, Simon Roberts, CEO of Sainsbury’s, highlights the potential to improve labor mobility and drive better business outcomes.

Six Steps HR Managers Must Take to Ensure Compliance

To stay updated on changes in U.K. employment law, legal and compliance experts, such as Chris Hughes, recommend several actions for HR professionals. Here are the key steps to ensure compliance:

1. Review and Update Policies

• Conduct a comprehensive review of existing HR policies.
• Update family leave policies to reflect new entitlements.
• Revise procedures for handling flexible working requests to meet new timelines.

2. Training and Awareness

• Train HR staff and management on new legal requirements.
• Educate employees about their rights under the new laws through internal communications.
• Subscribe to legal bulletins and updates from reliable sources.

3. Implement Robust Compliance Systems

• Develop systems to track compliance with new regulations.
• Monitor working hours and pay to ensure adherence to minimum wage laws.
• Create a robust process for handling flexible working requests.
• Build a framework for the new carer’s leave entitlements.

4. Enhance Workplace Culture

• Update workplace harassment policies and training programs.
• Develop an inclusive culture supporting flexible working and family leave.

5. Seek Legal Advice

• Consult employment law experts to review compliance strategies.
• Obtain tailored advice to address specific areas needing attention.
• Engage with professional networks (specifically HR and legal) for insights on upcoming changes.

6. Conduct Regular Audits

• Perform regular audits of HR practices to ensure ongoing compliance.
• Identify potential issues early and take corrective action.

Additionally, staying informed through government announcements and updates will help HR managers remain aware of new legislation that could impact their practices.

Managing Flexible Work Successfully in the Context of New Laws

As the U.K. prepares to introduce new employment laws requiring employers to respond to flexible working requests within two months, workplace experts have offered valuable insights on how businesses can adapt effectively. 

Dr. Gleb Tsipursky, best-selling author and future of work expert, emphasizes that clear remote work policies are essential for both compliance and success. Tsipursky asserts that well-defined work-from-home guidelines ensure compliance and enhance a company’s appeal to investors and top talent.

In a recent Allwork.Space podcast, Kari Smith, Director at JLL’s Work Dynamics Consulting, stressed the importance of adopting strategies and utilizing resources to optimize flexible work management. 

Employers who equip HR managers and teams with the right tools to handle flexible work arrangements efficiently can also mitigate potential obstacles.

The Bottom Line

The 2025 changes to U.K. employment law will require employers to reassess HR practices, update existing policies, train or retrain staff, and implement more robust compliance systems. 

Staying informed and consulting expert legal advice will be essential for ensuring compliance with the legislation and averting potential legal challenges next year and beyond.