What the workers rights reform bill means for UK employers

The UK government has confirmed the revised terms of its wide-ranging workers’ rights reform programme, now enacted through the Employment Rights Act 2025. Although some of the original proposals have been softened, the legislation still represents the most significant change to UK employment law in many years.

For business owners and employers, the key issue is not whether these changes will affect them, but when and how. The reforms are being introduced in phases across 2026 and 2027.

Day-one rights for unfair dismissal

Perhaps the most impactful change is the removal of the two-year qualifying period for claiming unfair dismissal. Under the new Act, employees will have the right to claim unfair dismissal from their first day of employment. To balance this, the government has introduced a statutory probationary period framework (expected to be up to six months), during which employers will have a simplified process for dismissing staff who are not suitable for the role. However, this still represents a major shift that will require employers to overhaul their recruitment and performance management processes.

Restrictions on zero-hours contracts

The Act introduces strict new rules aimed at tackling 'exploitative' zero-hours contracts. Workers who regularly work predictable hours over a defined reference period (likely 12 weeks) will have the legal right to request a contract reflecting those regular hours. Furthermore, employers will be required to give workers reasonable notice of shifts and provide compensation if a shift is cancelled at the last minute.

Fire and rehire practices

The practice of dismissing employees and immediately re-engaging them on less favourable terms—often referred to as 'fire and rehire'—will be heavily restricted. The Act makes it automatically unfair to dismiss an employee for refusing to accept a variation in their contract, except in very narrow circumstances where the business is facing severe financial distress and there is no viable alternative.

Preparing for the changes

While full implementation will take time, employers must start preparing now. Contracts of employment, staff handbooks, and HR policies will all need comprehensive reviews. Managers will require urgent training on how to handle the new statutory probationary periods and the expanded rights to flexible working and parental leave. Seeking professional HR and legal advice early will be crucial to navigating this new landscape safely.