Employment law in the UK is changing, with new rules around flexible working, zero-hour contracts, day one rights to unfair dismissal and “fire and rehire” practices set to take effect between 2025 and 2027. These changes will influence how you hire, manage, and support your people.
If you’re wondering how these updates affect your contracts, policies, and processes, you’re not alone. Many employers share the same concerns. The good news is that with the right help, you can protect your business from disputes and help promote fairer working conditions.
Our guide outlines what to expect and how you can prepare for the employment law changes. Our HR consultants stay up-to-date with UK employment law and make sure that your contracts, policies, and processes reflect any recent or future changes.
What are the key employment changes in 2025/26 that will impact businesses?
Employment legislation continues to evolve, particularly under the Labour government’s plan to modernise UK employment rights. From minimum wage rises to updates in parental leave and worker protection, there are several areas you’ll need to be aware of.
Below, we explore five key changes that may affect your business.
New rules on flexible working requests and zero-hour contracts
Employees now have the right to request flexible working arrangements from day one. This means they no longer need to wait 26 weeks before making a request.
As an employer, you’ll need to handle these requests fairly and respond within an appropriate timeframe.
| Flexible Working Requests – Quick Breakdown | |
|---|---|
| Employees | Employers |
| Can make flexible working requests from day one of employment | Must respond to requests within two months |
| Can make up to two requests per year | Must provide a valid reason if rejecting a request |
| Don’t need to explain how a flexible arrangement will work or affect the business | Must ensure decisions are fair and non-discriminatory |
| Must submit requests in writing and include details of the proposed change | Should update contracts and policies to reflect new rights |
Alongside flexible working, the government plans to clamp down on exploitative zero-hour contracts to tackle inconsistent work and income security, a key concern in sectors like construction and hospitality.
Employers will need to provide workers with guaranteed hours based on their average working pattern over a specific period.
To stay compliant, review your current employment contracts and ensure you clearly outline hours, availability, and how you handle flexible working requests.
Addressing fire and rehire practices
The new Employment Rights Bill introduces tougher guidance to stop unfair “fire and rehire” practices. This happens when employers fire employees and then offer to rehire them, but on worse terms.
It’s your responsibility as an employer to take reasonable steps to explore fair alternatives before making any contractual changes. This could include offering a temporary agreement or implementing changes in phases.
| Dismissal and Re-engagement Practices – Quick Breakdown | |
|---|---|
| Employees | Employers |
| Have the right to challenge unfair contractual changes | Must consider reasonable alternative options first |
| Can seek representation from a trade union or adviser | Must consult with employees and their representatives (e.g. trade unions) |
| Should provide as much information as possible about the proposed changes (and in writing) | |
| Must ensure any change is lawful, fair, and communicated clearly | |
| Dismissal and re-engagement should be a last resort | |
If you run a recruitment agency or construction firm, you’ll be managing multiple contracts. You’ll need to pay close attention when changing pay rates, service charges, or working hours, and you must make sure any change is fair and clearly explained. Getting the right HR advice is always a good idea when making changes to employment terms and will help you avoid potential fallout.
Changes to parental and bereavement leave
The government is introducing more support and flexibility for parental and bereavement leave. Employees will be able to take parental leave in separate blocks rather than one continuous period.
Bereavement leave will also be extended to more groups of employees, ensuring that parents and carers have legal protection and time to recover.
| Parental and Bereavement Leave – Quick Breakdown | |
|---|---|
| Employees | Employers |
| Can take parental leave in blocks, not just one continuous period | Must update leave policies and payroll systems |
| Are entitled to two weeks leave and pay when a child under 18 or a stillborn baby after 24 weeks dies | Should review how statutory sick pay, holiday pay, and parental leave are calculated |
| Must notify the employer when requesting leave | Must support requests fairly and sensitively |
| Rights extend to natural/biological parents, adoptive parents, foster parents, guardians, and partners | |
These updates should improve work-life balance and support employee wellbeing, but they also require businesses to update HR systems and payroll processes. For instance, you may need to adjust calculations for statutory sick pay and paid leave to reflect the new arrangements.
Deadlines for tribunal claim periods
New legislation will extend tribunal claim periods for certain employment rights, giving employees more time to raise disputes for unfair dismissal, unpaid wages, or a breach of contract.
Currently, the limit is three months minus one day from the date of the incident. The new rules will give employees more time to raise claims, recognising that some workers might need extra time to collect evidence or get advice.
| Tribunal Claims Changes – Quick Breakdown | |
|---|---|
| Employees | Employers |
| Will have longer to bring tribunal claims forward (3 months minus 1 day or 6 months minus 1 day) | Must retain HR and payroll records for longer |
| Can seek advice and gather evidence before submitting a claim | Must ensure fair and transparent dispute resolution processes |
| Are encouraged to raise issues internally first to find a mutual resolution | Should document disciplinary and dismissal decisions thoroughly |
Unfair dismissal rights
Perhaps the most significant change is the removal of the current two-year qualifying period for claiming unfair dismissal. The new rules give all employees the right to claim unfair dismissal from the first day of their employment.
| Unfair Dismissal Rights – Quick Breakdown | |
|---|---|
| Employees | Employers |
| Can claim unfair dismissal from their first day | Must review dismissal and disciplinary procedures |
| Are entitled to clear reasons for dismissal | Should carefully document all performance reviews, grievances, and warnings |
| Are encouraged to raise grievances internally before escalating to a tribunal | Must ensure all terminations comply with updated employment law |
This is a major shift that will affect hiring and management decisions across all industries. You’ll need to be more cautious during probationary periods and handle disciplinary procedures fairly, using well-documented evidence.
With worker protection at the heart of these reforms, it’s crucial you make sure every contract, hiring process, and dismissal procedure complies with the updated employment rights legislation.
How to prepare your business for these employment law changes
Now is the time to review your contracts, policies, and HR processes.
These are the steps you can take today to stay compliant and protect your business:
- Review and update employment contracts to reflect new rules around flexible working, zero-hour arrangements, and dismissal rights.
- Update your staff handbook to include new entitlements such as extended parental and bereavement leave.
- Train managers on handling flexible working requests, disciplinary procedures, and equality obligations.
- Check payroll systems to ensure correct processing of statutory sick pay, holiday pay, and national minimum wage rates.
- Consult with an HR specialist (like Ascott Blake’s advisory team) to identify any risks and ensure full compliance.
Need HR advice? Reach out today
At Ascott Blake, we’re here to help UK businesses create positive workplaces where employees thrive and business owners have peace of mind.
Whether you are a small business owner or manage a larger organisation, if you are looking for HR advice, get in touch today, and let’s discuss your needs.
Frequently asked questions about the new employment law changes
What is the main purpose of these employment law changes?
The main goal is to create fairer and more transparent working conditions, strengthening employment protection for existing and new employees. The government’s new legislation focuses on improving workers’ rights, tackling exploitative practices, and ensuring all UK businesses meet consistent employment standards.
How do these changes affect my current contracts?
You’ll need to update your contracts if they still include any of the old rules on flexible working, qualifying periods, or zero-hour arrangements. You must also make an effort to ensure that any future contractual changes follow fair procedures and do not breach employment rights.
How will the employment law changes affect your business if you’re using zero-hour contracts?
Some businesses rely heavily on zero-hour workers, particularly in trade-related sectors such as construction and hospitality. If you fall into this category, you’ll need to make sure all workers are offered guaranteed hours that reflect their regular working patterns and get rid of any existing zero-hour contracts. These changes are expected to take place in 2027.
Do I need to update my staff handbook?
Yes, you should update your staff handbook to reflect the new employment law changes as they come into effect. The changes are due to take place throughout 2025 to 2027, so it’s a good idea to review your staff handbook and other relevant documents on a regular basis to make sure nothing gets missed.
Not only is it good practice, but it also keeps you compliant and helps employees and yourself as employers understand your rights.
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