The Employment Rights Act 2025 is a wide‑ranging reform of UK employment law. It creates a statutory right for qualifying zero‑hours and similar workers to be offered guaranteed hours after each prescribed reference period; establishes rights to reasonable notice of shifts and to a specified payment when qualifying shifts are cancelled, moved or curtailed at short notice; and inserts Schedule A1 to give parallel protections for agency workers.
The Act also reduces the unfair‑dismissal qualifying period to six months, removes the SSP waiting day, sets a new SSP formula, and creates statutory negotiating bodies for school support staff and social care.
Beyond individual workplace rights, the Act centralises labour‑market enforcement: the Secretary of State acquires extensive investigatory powers (notice, entry, seizure), a new advisory board and a strategy/reporting cycle, and can use labour‑market enforcement undertakings and court‑ordered LME orders. The bill also reworks trade union procedures (access agreements, CAC powers, changes to ballot and political‑fund rules) and adds procurement protections so public outsourcing contracts can specify terms to protect transferring workers.
For HR, in‑house legal teams and advisers this is a package of new offer, notice, recordkeeping and tribunal risks that will require prompt operational changes.
At a Glance
What It Does
The Act requires employers and, in many cases, hirers or work‑finding agencies to make ‘guaranteed hours’ offers to qualifying workers after each reference period; to give reasonable notice of shifts; and to pay a specified amount when qualifying shifts are cancelled, moved or curtailed at short notice. It inserts agency‑worker protections (Schedule A1), creates negotiating bodies for school support staff and social care, alters dismissal and family‑leave protections, and abolishes the Gangmasters and Labour Abuse Authority while giving the Secretary of State new enforcement powers.
Who It Affects
Employers who use zero‑hours contracts or weekly‑variable rosters; recruitment and work‑finding agencies and hirers; public bodies that outsource services; social‑care and school‑support employers; trade unions and the Central Arbitration Committee (CAC); payroll, HR and compliance teams tasked with new offers, notices, payments and records.
Why It Matters
The Act shifts predictability to irregular workers by converting sustained variable hours into an entitlement to an offer of guaranteed hours and by penalising late cancellations. It creates a single, more muscular enforcement architecture (LME undertakings and orders, warrants, notices of underpayment) that increases the downside of non‑compliance. It also changes collective‑relations terrain through access agreements, CAC determinations and new negotiating bodies — altering how recognition, bargaining and procurement interact with employment rights.
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What This Bill Actually Does
Part 1 substantially rewrites protections for workers with variable hours. Employers must calculate whether a worker is “qualifying” for a guaranteed‑hours offer after each statutory reference period and, where so, make a time‑bound offer that reflects the hours actually worked.
The statutory offer must meet minimum content rules (days/times or patterns, pay and other terms) and may be an offer to vary existing terms or to enter a new contract; workers can accept or be treated as having rejected offers if they do not respond. Separate but parallel rules in Schedule A1 put similar duties on hirers and work‑finding agencies in relation to agency workers.
Tribunals have a new complaints route and capped compensation regimes for breaches.
Chapters on shifts create a right to reasonable notice of a requested or required shift and to reasonable notice of cancellations or changes; the Act presumes notices below specified thresholds are unreasonable. Where qualifying shifts are cancelled, moved or curtailed at short notice, employers or work‑finding agencies must make a specified payment.
The Act makes room for regulations to set the definitions, notice windows and payment levels, and includes exemptions (for example, specified excluded shifts and agency‑worker carve‑outs where the Schedule provides otherwise).Separately, the Act changes substantive employment entitlements: it removes the SSP waiting day (so entitlement starts earlier) and fixes statutory sick pay as the lower of £118.75 or 80% of normal weekly earnings; it removes qualifying‑service gates for parental and paternity leave; broadens bereavement leave; and reduces the unfair‑dismissal qualifying period from two years to six months while adding new unfair‑dismissal protections tied to guaranteed‑hours offers and agency‑worker conversions.On enforcement, the Secretary of State replaces existing enforcement bodies, gains powers to appoint enforcement officers, obtain documents, enter premises (with warrants for dwellings), seize material, require underpayment notices and impose penalties. The Secretary of State must publish a labour‑market enforcement strategy and annual reports and may accept LME undertakings or seek LME orders in court; regulations will set notice periods, appeal routes and sanctions.The Act also addresses collective arrangements: it allows collective agreements to exclude the guaranteed‑hours duty where replacement terms are incorporated; creates statutory access agreements for unions mediated by the CAC with a new procedure for requests, CAC determinations and remedies; reforms recognition, balloting and political‑fund rules; and establishes the School Support Staff Negotiating Body and Social Care Negotiating Bodies with powers to consider, reach and, in specified circumstances, have agreements ratified into law or turned into regulations.
Finally, the Procurement Act is amended so ministers may specify contract clauses to protect transferring workers in outsourcing contracts.
The Five Things You Need to Know
The Act requires employers (or, where specified, hirers/work‑finding agencies) to make a guaranteed‑hours offer to qualifying workers after each statutory reference period, with regulations to define reference periods, qualifying thresholds and the latest offer and response dates.
Statutory sick pay waiting days are removed and the statutory weekly SSP rate is set as the lower of £118.75 or 80% of normal weekly earnings; entitlement timing and qualifying‑earnings rules are amended accordingly.
The Secretary of State takes over and expands labour‑market enforcement powers (notice to produce documents, entry with warrants, seizure, notices of underpayment, penalties, LME undertakings and court‑made LME orders) and must publish a three‑year enforcement strategy and annual reports.
The Act inserts Schedule A1 giving agency workers rights parallel to zero‑hours workers (guaranteed‑hours offers, reasonable notice of shifts, payments for short‑notice cancellations) and creates specific liability rules between hirers and work‑finding agencies for compliance and recovery.
Collective‑relations procedures change: the CAC gets formal powers over union access agreements and enforcement; recognition and ballot tests are remade (including a 10% required‑support gateway subject to ministerial regulation), and unions’ political‑fund rules move to an opt‑out model with new opt‑out notice regimes.
Section-by-Section Breakdown
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Guaranteed hours, shift notice and short‑notice shift pay
This group of chapters creates three linked workplace entitlements. First, employers must make a guaranteed‑hours offer to qualifying workers after set reference periods; the offer must match the hours actually worked in the relevant period and, where it converts a zero‑hours relationship into a contract, it must not worsen key non‑hour terms. Second, the Act imposes a duty to give reasonable advance notice of shifts and to notify workers of cancellations or changes; the statute establishes presumptions and delegates timing definitions to regulations. Third, employers (or work‑finding agencies for agency shifts) must pay a specified amount where qualifying shifts are cancelled, moved or curtailed at short notice, with regulations capping and calibrating payments to avoid over‑compensation. Practically, businesses must implement reference‑period tracking, written offers in a specified form, new notice systems, payroll procedures to make short‑notice payments and recordkeeping to defend tribunal claims.
Parallel guaranteed‑hours and shift rights for agency workers
Schedule A1 mirrors the guaranteed‑hours and shift provisions for agency workers, but distributes responsibility between hirers and work‑finding agencies. It sets out when a hirer must offer a worker a direct contract, how pay and additional terms are determined (including comparators), and schemes for notice, withdrawal and tribunal remedies. Critically, the Schedule gives work‑finding agencies the primary duty to make payments for cancelled or curtailed shifts, but allows recovery from a hirer under pre‑existing commercial arrangements; it also permits regulations to define excluded shifts and seasonal or reasonable‑business exceptions. Compliance will often require contract‑level coordination between agencies and hirers and changes to terms of supply agreements.
Redundancy procedure, collective agreements and outsourcing protections
The Act extends collective‑redundancy thresholds, lengthens protective consultation windows, and creates Chapter 6 rules permitting incorporation of collective‑agreement terms that expressly replace guaranteed‑hours duties (contracting‑out where both sides agree). Separately, the Procurement Act amendments let ministers require suppliers to include worker‑protection clauses in relevant outsourcing contracts and publish a code of practice; contracting authorities must take reasonable steps to include and secure compliance with those clauses. For public bodies and suppliers this raises procurement drafting, compliance monitoring and potential funding conditions to make any negotiated terms effective.
Centralised enforcement: powers, notices and LME orders
The Act transfers enforcement functions to the Secretary of State and authorises appointment of enforcement officers with broad investigatory powers: notices to attend and provide information or documents, powers to enter premises (with warrants for dwellings), seize documents, and require underpayment payments plus penalties. The Secretary of State can accept LME undertakings (time‑limited compliance packages) or apply for LME orders in court; failures attract criminal offences and financial penalties. The Act also creates a statutory process for notices of underpayment (with fixed penalty formulas and appeal routes) and a new Advisory Board to shape enforcement strategy. For regulated entities, the key practical change is a single, national regulator with statutory recovery and criminal tools, and an obligation to produce and retain records on demand.
Access agreements, CAC powers, ballot and political‑fund reforms
The bill creates a statutory access‑agreement regime: independent trade unions with certificates of independence can request access; employers who fail to negotiate face CAC determinations and orders, and the CAC can put access terms into effect. The recognition and ballot architecture is overhauled (new CAC procedures, changed admissibility tests, a ministerially adjustable ‘‘required percentage’’ gateway set at 10% by default) and many minimum‑service and turnout rules are repealed. Political‑fund rules move to opt‑out contributors with new opt‑out notice duties, and the Certification Officer’s investigatory/penalty powers are narrowed. These changes reconfigure union organising mechanics and CAC casework: employers must plan for CAC access requests, new communications limits and the risk of CAC remedial declarations.
Flexible‑working process, family leave, bereavement and SSP
The Act tightens the employer’s refusal test for flexible working (list of specific grounds and an obligation to explain reasonableness), removes qualifying‑service gates for parental and paternity leave, enlarges bereavement leave coverage to other bereavements and pregnancy loss, and removes the SSP waiting day (period of incapacity is shortened so SSP can start earlier). The SSP weekly amount is recalibrated (lower of £118.75 and 80% of earnings). Employers must adjust payroll, contractual leave policies and flexible‑working procedures and update staff communications and line‑manager training.
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Explore Employment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Zero‑hours and casual workers — gain statutory entitlement to be offered guaranteed hours and clearer shift‑notice rights and short‑notice payment protections that increase predictability and provide tribunal remedies.
- Agency workers supplied via work‑finding agencies — Schedule A1 gives them parallel access to guaranteed‑hours offers, notice and short‑notice payments and creates direct complaint routes against both hirers and work‑finding agencies.
- Social care and school support staff — the Act creates negotiating bodies with powers to consider pay and conditions and, in defined circumstances, have agreements ratified into regulations or contracts, offering a route to sectoral uplift.
- Workers taking protected family leave or experiencing bereavement — removal of qualifying periods and broadened definitions expand eligibility for parental, paternity and bereavement leave and related protections.
- Workers pursuing unpaid statutory entitlements — the Secretary of State’s power to issue notices of underpayment, seek recovery and impose penalties supplies an alternative enforcement route beyond individual tribunal claims.
Who Bears the Cost
- Employers using variable‑hour staffing models — will face new administrative burdens (tracking reference‑period hours, generating offers, issuing notices, making short‑notice payments) and exposure to tribunal claims and compensation awards.
- Work‑finding agencies and hirers — must coordinate around Schedule A1 duties, potentially pay short‑notice compensation and face new recovery and liability rules that complicate supply contracts.
- Public sector contracting authorities and suppliers — procurement clauses to protect transferring workers may raise bid costs, contract prices and require compliance monitoring or funding conditions.
- Businesses with limited HR capacity — smaller employers (subject to some exemptions) confront increased recordkeeping, consultation, and potential payments without commensurate administrative resources.
- Employers facing enhanced enforcement — centralised powers, notices of underpayment and LME orders create new financial and criminal risk exposure and raise compliance costs (legal, payroll, data and document retention).
Key Issues
The Core Tension
The central dilemma is predictability for low‑hours workers versus operational flexibility for employers: the Act advances work‑hour stability and compensates short‑notice disruption, but doing so requires detailed, prescriptive rules, recordkeeping and compliance costs that risk shifting employers back to time‑limited contracts, subcontracting or excluding workers — or increasing automation; at the same time, concentrating enforcement in Whitehall solves fragmentation but raises questions about resources, proportionality and oversight.
The Act resolves visible gaps in protections for irregular workers but leaves practical questions. The guaranteed‑hours framework depends on secondary regulations to define reference periods, the precise thresholds for qualifying workers, and the timing and form of offers and payments; those delegated rules will determine how many workers actually qualify and how costly compliance is.
Employers can incorporate collective‑agreement replacements for these rights, but the rules for incorporation and withdrawal (and the CAC’s new role in access and recognition disputes) create complex interactions between bargaining outcomes and individual statutory entitlements.
Centralising enforcement under the Secretary of State simplifies routes for complaints and escalations but concentrates intrusive powers (entry, seizure, underpayment notices and civil LME orders) in one department. That raises capacity and prioritisation questions: will the Secretary of State resource targeted inspection and effective casework, or rely heavily on notices and settlement undertakings?
The Act also prescribes data‑sharing gateways and wide disclosure powers; alignment with data‑protection duties and commercial confidentiality exceptions will require care in practice and may prompt legal challenges.
Trade union and industrial‑action reforms are a mixed bag: clearer statutory access procedures and recognition routes strengthen organising mechanics, but changes to ballot mechanics, political‑fund rules and Certification Officer powers will reshape union finances and governance. The interaction of procurement protections, negotiating bodies and statutory ratification powers (for social care and school staff) creates a new meta‑level where ministerial ratification, funding conditions and public procurement intersect — a space likely to generate disputes about funding, devolution competence and the limits of statutory ratification.
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