With so many legislative changes on the horizon, identifying the most time and cost critical in all the upheaval can be tricky, if not overwhelming. In a bid to cut through the noise, Simon Fowler, CEO of AdviserPlus, and Rena Christou, MD of Halborns, highlight the ten areas HR needs to get a handle on right now to avoid a hit to their employers’ reputation and finances.
We face the most significant shake-up of employment law in a generation under the Employment Rights Bill. Couple this with the impact of the increases in national insurance contributions (NI) and organisations are facing a perfect storm of rising costs and complexity.
These reforms, particularly the shift to day-one rights and changes to statutory sick pay (SSP), will place an even greater administrative burden on HR teams. A recent statistic indicated a likely 230 percent increase in probation-related tasks alone, at a time when 94 percent of HR professionals report signs of burnout, and 75 percent of managers feel overwhelmed by expanding responsibilities.
Organisations need to act now to navigate the challenges ahead. Here are the key changes employers need to prepare for.
Day-one rights for unfair dismissal
One of the most significant reforms the UK government has proposed is to replace the two-year service requirement for ordinary unfair dismissal claims with a new “day one” right, which is expected to come into force in autumn 2026.
Under the proposed framework, employers would follow a lighter-touch dismissal procedure during an initial probationary period, which is likely to be around nine months. The government is consulting on this, and current suggestions include a meeting where the employee may bring a trade union representative or colleague.
This new regime will not apply in redundancy situations or where the dismissal is unrelated to the individual (e.g. organisational changes), meaning that the full consultation process would still be required, even during probation.
Employers should prepare now, especially by reviewing how probation periods are managed. Missed review dates are a common pitfall and if a review is held after the end date, the law assumes probation has been passed, increasing notice entitlements. Additionally, if a role is not backfilled after dismissal, it could be classed as redundancy, triggering full unfair dismissal protections.
Employers should review contracts, onboarding, probation policies and recruitment practices now to ensure clarity and consistency ahead of the changes.
Fire and rehire
The new rules will all but remove fire and rehire as a tool for changing contractual terms, unless the business faces insolvency and the changes are essential to avoid collapse. Any dismissal using this method outside such scenarios will be automatically unfair and subject to a 25 percent compensation uplift.
Employers should review and revise contracts to ensure they allow maximum flexibility around location, hours, and duties, to reduce the need for unilateral changes. Proactive updates will support smoother transitions and reduce the risk of disputes later.
Collective redundancy consultation
The rules on collective consultation are changing too. In addition to the current threshold of 20 or more redundancies at a single site, a new trigger will apply across the whole business. This is likely set at either 50 or 100 redundancies. While this adds complexity, some safeguards remain, for example, the threshold will still apply per legal entity (not across group structures), employers can hold separate site-based consultations, and overseas employees may count if they have a strong UK connection.
Proposals to allow interim relief claims for consultation breaches have been dropped. But the maximum compensation will double from 90 to 180 days’ pay. A further 25 percent uplift may apply for breaching the statutory code of practice, which brings total exposure to 225 days’ pay per affected employee.
Employers need to take early, strategic steps to prepare and ensure redundancy processes are consistent, clear, and well-documented.
Zero-hours contracts
While zero-hours contracts won’t be banned, employers must offer minimum-hours contracts to workers who regularly work consistent hours over a 12-week period. This applies to zero- and low-hours contracts (e.g. five hours per week) and agency workers.
Workers don’t have to accept the offer, but it must be made. Exceptions apply for seasonal or event-based roles, or where the worker resigns or is fairly dismissed during the reference period. Employers must also give reasonable notice for shift changes or cancellations or provide compensation.
This change will add complexity, particularly in sectors like care, hospitality and retail. Now is the time to review flexible staffing models and ensure systems are in place to meet these new requirements.
Trade unions and recognition
Trade unions will have a new statutory right to access workplaces to recruit members. If refused, they can apply to the Central Arbitration Committee for enforced access.
Recognition procedures will also be simplified. The threshold to trigger a ballot may be lowered from 10 percent to 2 percent membership. The requirement for 40 percent of eligible voters to support recognition is also being removed and recognition will be granted by a simple majority. Employers must include a statement in all employment contracts making clear that employees have the right to join a union.
Employers should assess and strengthen internal employee engagement channels to support effective communication and reduce the risk of formal unionisation.
Pay gap reporting
Employers with 250 plus employees will be required to publish an Equality Action Plan alongside gender pay gap data. Future changes will mandate the inclusion of outsourced and contract workers in reporting figures.
Ethnicity and disability pay gap reporting are also expected to become mandatory. These are more complex than gender reporting, due to the broader range of groups and data sensitivities involved.
Employers should begin gathering diversity data, set clear equality objectives, and review how senior contractors may impact future pay gap reporting.
Preventing sexual harassment
These changes came into force in October 2024 and mean that employers must take all reasonable steps to prevent sexual harassment, including from third parties such as customers or clients. Failure to do so could result in compensation uplifts of up to 25 percent.
Employers should take proactive steps to prevent workplace harassment by strengthening policies, improving training and ensuring clear, supportive reporting channels are in place.
Family friendly rights
Parental and paternity leave will also become day one rights, and large employers will be required to implement a menopause action plan, likely modelled on gender pay gap reporting.
Employers should update policies, train managers on entitlements, and embed menopause support within wider wellbeing initiatives.
Statutory sick pay (SSP)
The SSP reforms are particularly impactful. SSP will become payable from day one of absence, and to all workers regardless of earnings, increasing employer costs and potentially driving higher absence rates. Employers should strengthen sickness absence management processes by tightening policies, conducting regular reviews, and using data to spot trends and intervene early.
Employment tribunal reform
The deadline for most employment tribunal claims will increase from three to six months. This extended window is expected to lead to a rise in claims, especially in combination with the new day-one rights. The bill also creates a new Fair Work Agency to enforce rights like SSP and holiday pay, with powers to bring claims on behalf of vulnerable workers.
Employers should expect greater scrutiny and prepare with strong compliance, clear documentation, and early issue resolution.
With so much change on the horizon, employers need to raise their game or risk legal exposure, employee disengagement and compliance gaps.
