Katherine Maxwell, partner and head of the employment department at Moore Barlow
The Employment Rights Bill has entered the parliamentary pinball machine. Recent defeats in the House of Lords on a number of high-profile amendments mean the Bill has been sent back again this month to the Commons for further debate.
Peers have voted on measures including guaranteed hours for zero-hours workers and day-one unfair dismissal rights. The Peers want workers to have the ability to decline a guaranteed hours offer. They also continue to push back on the proposal to give employees day one rights. They continue to push for a six month qualifying period.
Their push to change key issues including these amongst other is not simply amendments on the fine print; it has major implications down the line for companies who are looking to prepare for this systemic change to how they do business.
That uncertainty has left many HR teams and business owners waiting for a final version before they act. There is hesitation to commit resource and budget to policies that might be altered. However, choosing to wait is in itself a decision. Experience shows that the businesses which cope best with legal change are those that start preparation early, not those that try to retroactively comply. Some of these changes are anticipated with effect from April 2027.
The cost of standing still
Recent research paints a concerning picture. According to a CBI and Pertemps survey, nearly eight in ten companies now believe the Employment Rights Bill will hit growth, investment, jobs or employee benefits. That figure has jumped from just over half last year. Meanwhile, the Federation of Small Businesses found that two-thirds of small employers said the proposals would make them curb hiring.
Waiting for clarity can come at a price. Employers who hold off on updating contracts or training managers could find themselves unprepared when the Bill takes effect. Disputes over dismissals, hours or flexible working could rise quickly, bringing extra cost and pressure. Standing still can also slow hiring, harm morale and damage reputation. Doing nothing is not a safe choice; it leaves businesses exposed when change arrives.
The no-regrets approach
What businesses need to consider while the bill sits in purgatory is that there are changes that make sense regardless of how amendments shake out. This includes treating probationary periods seriously now and document performance from day one. Even if a lighter dismissal process eventually applies to initial employment periods, the fundamentals remain the same. These aren’t just future legal requirements but good management practice that reduces turnover and improves business growth.
Businesses should review their zero-hours and casual contracts immediately. They should also upgrade their absence monitoring systems before statutory sick pay becomes a day-one right, which means holding return-to-work meetings and training managers to spot these patterns. These systems take time to embed, and businesses won’t want to attempt to implement multiple new systems after the law changes.
The same principle applies to preventing harassment. The legal duty to take reasonable steps to stop harassment already exists and is not affected by the ongoing debate in Parliament. Employers should therefore act now by carrying out risk assessments, providing staff training and putting strong reporting procedures in place. For public-facing organisations, these measures are especially important to reduce the risk of liability. It is also sensible to review flexible working policies so that, when new rules are introduced, likely in 2027, your business already has experience in the system.
The wider risk
Analysis from the CIPD found that among organisations expecting employment costs to increase, four in ten anticipate raising prices. We’re facing a feedback loop where uncertainty leads to defensive hiring, which suppresses job creation, which further dampens confidence.
The businesses that thrive through these changes will be those recognising that good employment practices and legal compliance aren’t opposing forces. You can wait for parliamentary certainty and scramble to comply or use this to implement changes that benefit your business regardless of final policies. Waiting may feel like a cautious approach but it’s in fact, the riskiest strategy.