Anticipated Employment Law Changes in Autumn Budget 2025

 

The UK is on the brink of its most significant employment law overhaul in decades, driven by the Employment Rights Bill, expected to receive Royal Assent in late 2025 with phased implementation through 2026–27. Key reforms include:

Day-One Rights:

• Unfair dismissal protection from the first day of employment (currently two years).
• Day-one entitlement to parental leave and statutory sick pay.

Statutory Sick Pay (SSP):

• Payable from day one of sickness.
• Removal of the Lower Earnings Limit, widening access.

Family-Friendly Policies:

• Enhanced protections during pregnancy and six months post-return.
• New statutory bereavement leave entitlement.

Zero-Hours Contracts:

• Ban on exploitative practices; guaranteed hours for regular workers.
• Compensation for last-minute shift cancellations.

Fire and Rehire Restrictions:

• Dismissal and re-engagement on worse terms will be automatically unfair except in narrow circumstances.

Industrial Relations:

• Repeal of minimum service level rules for strikes.
• Dismissal for lawful industrial action becomes automatically unfair.

Equality & Harassment:

• Mandatory gender pay gap and menopause action plans for large employers by 2027.
• New employer duty to prevent third-party harassment.

Other Changes:

• Extended Employment Tribunal claim deadlines (3 → 6 months).
• Creation of the Fair Work Agency for enforcement.

Actions for Businesses

• Recruitment & Dismissal: Revise hiring processes and contracts to reflect day-one rights and probationary procedures. Train managers on fair dismissal protocols.
• Scheduling & Staffing: Audit shift allocation practices to comply with zero-hours reforms; implement guaranteed hours where applicable.
• Family Leave & Sick Pay: Update payroll systems and policies for SSP and new leave entitlements; communicate changes to staff.
• Industrial Action Risk: Strengthen employee engagement and dispute resolution strategies to mitigate strike risks.
• Compliance & Training: Prepare gender pay gap and menopause action plans; train managers on harassment prevention duties.

These changes will increase compliance obligations and HR complexity, but they also align with business values of brands like McDonald’s of Family, Inclusion, and Integrity, reinforcing a people-first culture.