The Employment Rights Bill: where are we now?

The Employment Rights Bill (ERB) is now approaching the final stages of the UK parliamentary process, with major reforms to employment law in England, Scotland and Wales set to come into force soon, with potential impacts for STEM employers and their technical workforce. However, as the Bill continues its passage through Parliament, key issues remain unresolved.

Current Status of the Bill

The ERB was first introduced in parliament by the Labour Government on 10 October 2024, fulfilling the Labour government’s pledge to bring it forward within 100 days of taking office. Since then, it has been examined both in the House of Commons (where the government holds a majority), and in the House of Lords.

The Bill cleared the Commons earlier this year and had its third reading in the Lords in early September, before returning to the Commons on 15 September 2025 for further consideration. Following debate and voting, all but straightforward, technical amendments were rejected by MPs. This means that the Bill will now return to the Lords, potentially entering a “ping-pong” phase between the two Houses.

What are some of the key issues that remain unresolved?

Day-One Unfair Dismissal

One of the Government’s central reforms proposed in the Bill is to make protection against unfair dismissal a “day-one” right, abolishing the existing two-year qualifying period for bringing such a claim in an employment tribunal. For STEM employers, this means that employees such as engineers, scientists, researchers and technical staff etc. will gain immediate protection against unfair dismissal – albeit this right will not apply during their probationary period, provided the employer follows a “simplified” dismissal process. The precise rules, including the length of the initial statutory probation period, remain subject to consultation, although the government has indicated a preference for a nine-month period.

In contrast, the House of Lords believe that unfair dismissal protection should only begin after six months’ service and amended the Bill to reflect this. As expected, MPs rejected this amendment on 15 September, reinstating the original day-one proposal.

Understandably, this lack of clarity is likely going to be frustrating for employers, including those operating in the STEM sector who will want to plan for the implementation of the legislation. Employers should be aware that once this issue is resolved, probation policies and employment contracts will need to be amended at short notice to reflect the new position, and managers will need to be trained quickly to raise awareness of the new rights to reduce the risk of disputes and claims arising.

Zero Hour Contracts

Zero hours contracts are employment agreements in which the employer is not required to provide a minimum number of working hours, and the employee is not obliged to accept any work offered. These contracts have been used across a range of sectors, including STEM, and are often valued by employers and some workers for the flexibility they provide.

For example, universities and research institutions may use zero-hours contracts for research assistants, lab-technicians or postgraduate teaching staff, particularly where project funding is temporary and staffing levels fluctuate with grants and experimental needs. Similarly, IT firms and tech consultancies may hire staff on flexible zero-hours agreements to meet fluctuating client demand.

However, zero-hours contracts have increasingly been criticised for creating job insecurity and unpredictability for workers. The ERB aims to tackle these concerns by creating a framework for a right to a guaranteed hours. Under this framework:

• Employers will be required to offer a minimum number of hours to qualifying workers (including qualifying agency workers) on zero hours contracts at the end of every reference period.
• The reference period will be set out in the forthcoming regulations but is expected to be 12 weeks.
• The offer will represent the hours worked during that period.
• The duty to make the offer will continue until the worker is no longer classed as a “qualifying worker” (i.e. when the contract guarantees more than a minimum number of hours, details of which will be set out in the regulations).

Earlier this month (at the third reading), the House of Lords approved some significant non-Government backed amendments to the Bill in an attempt to soften these provisions. These included:

• Giving workers a right to request guaranteed hours removing the automatic employer duty to offer guaranteed hours. This would require the employee to take the initiative. Employers would only have to consider requests, mirroring the flexible working regime.
• The right to request only existing where the worker works an average of at least eight hours a week over a rolling 26-week reference period. This would therefore exclude very low hour workers from the right to request guaranteed hours.
• “Short notice” cancellation payments falling away if the employer withdraws a shift at least 48 hours before it starts.

However, these amendments were not backed by the government and were rejected by the Commons on 15 September. This means that this issue will return to the Lords for further consideration before returning to the Commons once more.

What are the practical implications for employers?

The ERB is expected to become law, but the final detail and timing remain dependent on political and parliamentary decisions. The next House of Lords vote is scheduled for 28 October 2025.

The House of Commons (as the UK’s elected chamber), has the final say on legislation. Since MPs have already rejected the Lords’ amendments, the Lords are expected to accept the Commons’ position and approve the Bill on 28 October 2025. If that happens, the Bill is expected to receive Royal Assent in early November, with the first measures taking effect two months later.

Once the legislation is enacted and comes into force, employers will need to make significant updates to contracts, policies and workplace practices. Changes will affect areas such as pay, flexible working, sick pay and unfair dismissal protections. Other reforms will influence how employers manage industrial relations, address the gender pay gap, support employees experiencing menopause, and strengthen protections against sexual harassment.

In the meantime, employers should keep policies on dismissal, probation, zero-hours contracts and flexible working under review, and seek legal advice where appropriate to remain prepared for changes that could take effect at short notice.

This update contains general information only and does not constitute legal or other professional advice.