18.12.2025
The Employment Rights Bill has reached a pivotal moment. With major employment law changes due to take effect from 2026, employers face a very different operating landscape. How organisations hire, manage performance and handle exits will feel the impact. Those who prepare early will be better placed to respond.
Employment Rights Bill update
The Bill applies across England, Scotland and Wales. Employment law remains devolved in Northern Ireland.
Originally described by the government as the “biggest upgrade to rights at work for a generation”, early proposals included day-one unfair dismissal rights, prompting strong resistance from business groups.
Following discussions between trade unions and employer representatives, the government has now proposed what it describes as a more “workable” package. The central change is a reduction in the unfair dismissal qualifying period from 24 months to six, while existing day-one protections against discrimination and automatically unfair dismissal remain in place.
The proposed timetable remains ambitious. Most reforms are expected to roll out across 2026 and 2027, with changes to unfair dismissal currently due to take effect from January 2027.
A wider reset of employment rights
The unfair dismissal change sits within a broader programme of employment law reform. In its latest update, the government confirmed the Bill is intended to deliver:
- Day-one rights to statutory sick pay and paternity leave from April 2026
- The creation of a new Fair Work Agency, increasing oversight and enforcement
- Minimum wage rises again in April 2026, including a higher National Living Wage
- A commitment that the unfair dismissal qualifying period can only be changed through primary legislation
- Confirmation that the compensation cap for unfair dismissal will be lifted
- Due in October 2026, it will bring decisive changes to workplace practices and discrimination
The government has been clear that both workers and employers need certainty and time to prepare. It has also acknowledged the particular challenge this creates for small businesses adapting to a more tightly regulated employment landscape. From April, also home workers will feel it hit their wallets, with tax relief on additional costs scrapped.
Why this matters for employers
A six-month qualifying period materially shifts risk. For many organisations, this will require tighter discipline across recruitment, performance management and compliance.
Key implications include:
1. Probation periods matter more than ever
Employers will need robust probation frameworks and active performance management from day one. Informal or poorly documented processes will carry real risk.
2. Hiring decisions carry greater consequence
Selecting the right candidate for the first time matters more than ever. Recruitment, screening and onboarding processes will need sharper focus and consistency.
3. Fair process is no longer optional
With the compensation cap set to be lifted, unfair dismissal claims will carry much higher stakes. Process, evidence and governance will be under scrutiny.
4. Risk concentrates around certain employee groups
Higher earners, older workers and those with protected characteristics may be less able to mitigate losses, increasing potential liabilities for employers.
For employers, this is a structural shift in how employment rights are applied, enforced and challenged.
Staying compliant without slowing down
In regulated and safety-critical sectors, compliance pressure is already intense. Employment reform adds another layer, often without the luxury of time or spare capacity.
This is where Morson Edge supports employers at the sharp end.
We support organisations operating in complex, regulated environments where compliance, speed and productivity must coexist.
How Morson Edge helps:
Our outsourced and specialist talent solutions bring structure, consistency and control where risk is rising.
We help clients to:
- Strengthen recruitment and screening to reduce early-stage risk
- Build robust onboarding and probation frameworks
- Apply consistent process and governance across the employee lifecycle
- Maintain compliance without adding internal headcount
- Free internal teams to focus on strategy, delivery and performance
Across our client programmes, we embed specialist capability quickly. No noise. No fluff. Just clear action that reduces exposure and keeps productivity on track.
Employment law will keep evolving. The organisations that stay ahead are the ones that plan early and act decisively.
Think sharper. Stay compliant. Keep moving.
If you’d like to understand what the Employment Rights Bill means for your workforce strategy, speak to Morson Edge.
