Passing of the Employment Rights Bill

After months of delay, including several weeks of ‘ping pong’ between both houses of Parliament, the Employment Rights Bill will receive Royal Assent tomorrow, 18th December. 

Yesterday (16th December), the House of Lords voted to pass the Bill after considering the latest amendments and acknowledging the calls by the REC and other business bodies to progress the Bill so we could get on with ensuring vital regulations are in place in a form that businesses can cope with. Further delay risked rushing this process on a Bill that was always going to pass eventually, due to the Government’s large majority.  

While we continue to have significant concerns about the new law, the passing of the Bill will provide a level of certainty for businesses. As we wrote in a joint letter to the Secretary of State for Business and Trade, we believe that passing the Bill now is an important step to avoid losing the progress made in collaboration with government. For example, the REC led on ensuring that unfair dismissal rules start from 6 months into a job, rather than on day one. This hard-won amendment will be particularly important for our industry, helping businesses to be more confident in hiring new staff and removing most agency assignments from the new rules. 

We will continue advocating for changes to how guaranteed hours and day one access to Statutory Sick Pay will apply to agency workers. The partnership approach of the past few weeks means we have a better platform to make progress on these too. Other issues, including thresholds for industrial action and the practical application of union rules, will also be discussed next year. We hope that workable agreements can be found in due course under the new approach of working with businesses.  

While some measures in the Bill will take effect immediately upon Royal Assent, the vast majority of changed will be introduced in a staged way over the next two years (as currently set out). So the focus for January is still on shaping the rules, with a number of formal consultations to be published early in January 2026. 

If details are not worked out in partnership with business, there is a risk to job creation and economic growth. There can be no return to the approach of freezing businesses out of discussions on how their workplaces are regulated, as happened too often in the first year of the Bill. 

The REC will continue advocating on behalf of members and ensuring there is enough time in the process to allow businesses to prepare for the new rules. We will also continue providing up-to-date legal advice on aligning practice with the new law. 

You can find more on the ERB in our Employment Rights Bill Hub.