Employment Rights Bill: In the Final Stages Before it Becomes Law

On the 3rd September 2025, the Employment Rights Bill passed its third reading in the House of Lords and it will now go back to the House of Commons to discuss the remaining amendments. The House of Commons can then accept the amendments made or reject them and send them back to the House of Lords who would then likely hone down the amendments. Once the amendments are finally agreed after this ‘ping pong’ phase between the HoL and HoC, the Bill will then receive Royal Assent and become law.

The good news is that the Employment Rights Bill is soon approaching its final form. Regardless of whether the changes it creates are positive or negative from the view of employers, there will at least be a great deal more certainty on what the headline changes are and the form they will take. With that said, a lot of the more detailed practicalities will be set out in ‘secondary legislation’ as there are still on-going consultations that need to be considered.

We list below 4 aspects of the Employment Rights Bill to watch in terms of both amendments from the HoL and also secondary legislation.

Unfair Dismissal

This is one of the flagship changes the Government are looking to bring in, but full implementation has been pushed back to 2027. The date being pushed back is a significant indicator of how impactful this change could be and the Government’s need to review it in depth before implementation. We are still not being informed of the full extent of how the changes will work, beyond the fact that there will be an ‘initial period’ of employment lasting around 9-months where a new ‘light touch’ dismissal process will be in place. We do not yet know what ‘light touch’ will mean in practice and how the current ACAS Code of Practice will be affected.

N.B: As it stands, there is an amendment passed by the HoL to the unfair dismissal change whereby the first 6-months of employment are subject to a qualifying period (basically the same as the current 2-year period but squeezed into 6-months where an employee can be dismissed without being able to claim for unfair dismissal). Unfortunately for employers, this amendment is unlikely to be accepted as it would completely upend the Government’s ideology behind their unfair dismissal changes.

Fire and Rehire

When the original Bill was published it set alarm bells ringing for employers as it effectively banned the practice of ‘fire and rehire’ (where an employer fires then rehires an employee who refuses to amend their contract to a change the employer wants). Thankfully from the

perspective of employers an amendment was tabled in July 2025 which watered down the original Bill. It is still a substantial change, but the amendment means a fire and rehire which includes changes to contract terms covering pay, pensions, working hours, shift patterns, or time off would be automatically an unfair dismissal. That is unless the business is facing extreme financial difficulties, although it is not known what that threshold will mean in practice. The amendment however removed it being automatically unfair to fire and rehire when the contractual change the employer wants relates to a change to a role/ duties or a place of work.

This amendment will almost certainly be accepted by the HoC as it was an amendment backed by the Government, so it would be a major shock if that was refused.

Duty to take “All Reasonable Steps” to prevent Workplace Sexual Harassment

Significant changes already came in October 2024 on taking ‘reasonable steps’ to prevent sexual harassment, but the Bill bolsters those changes and includes a duty to not just take reasonable steps but ‘ALL reasonable step’s to prevent sexual harassment. The Bill also revives an old duty to prevent third-party harassment such as from customers to your employees. As it stands though, the Government has not detailed what will actually constitute ‘all reasonable steps’ to comply with the strengthened duty. Partially this is due to a consultation on the issue which ended back in June 2025. Although the EHRC have existing guidance on ‘reasonable steps’, employers will hope for detailed guidance from the Government and/or the EHRC before the changes go live in October 2026.

As always, this advice is general in nature and will need to be tailored to any one situation. As an MILS member you have access to the MILS Legal advice line, as well as several industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.