The Employment Rights Bill (ERB) is one of the most significant reforms to UK employment law in decades, with wide-ranging implications for public sector employers. The Bill is now in the final stages of the Parliamentary process, with some outstanding areas of disagreement between the House of Lords and the House of Commons focusing on day-one unfair dismissal rights, guaranteed hours, seasonal work, union political funds, and strike ballot thresholds.
The ERB will not become law until the final wording is agreed between both Houses. It will become employment legislation soon and potentially this year. Many of its changes will take effect in phased tranches that are timetabled for April and October 2026 and during 2027.
With the legislation nearing completion, the clock is ticking. Now is the time for public sector employers to focus and take action within a sensible timescale – planning ahead strategically to ensure readiness. This article outlines some of the most significant changes for the public sector and offers practical guidance to help prepare for implementation.
1. Challenges for the Public Sector
The ERB introduces new statutory obligations, reshapes existing employment rights, and raises the stakes for enforcement. Employers must prepare for compliance across multiple legal areas, including dismissal procedures, working patterns, equality duties, and trade union engagement. The public sector faces particular challenges in implementing the Employment Rights Bill due to its legal duties, operational and budgetary constraints, and public-facing responsibilities.
- Budgetary pressures may limit flexibility in staffing models, and increased costs could present challenges. For example, even where enhanced sick pay is already provided under public sector terms and conditions, the ERB proposes expanding statutory sick pay eligibility – including entitlement from day one of employment and the removal of the lower earnings threshold. This change is likely to increase costs where casual or low-paid staff, such as bank workers, become newly entitled to new, enhanced statutory sick pay rights. Public bodies must balance reform with tight financial oversight and long-term workforce planning.
- The Public Sector Equality Duty under the Equality Act 2010 requires public bodies to eliminate discrimination, advance equality of opportunity, and foster good relations between different groups. This legal duty guides how employment reforms must be implemented. Under the ERB, changes such as menopause support, sexual harassment prevention, and fair pay mechanisms must be introduced in ways that actively promote inclusion and avoid unintended disadvantage. Policies, communications, and practices must reflect these equality obligations.
- Public sector employers operate under high levels of scrutiny, with employment practices often subject to public, political, and media attention. Workforce decisions particularly around job security, contract terms, and inclusion carry reputational risk and there is an expectation they will reflect best practice.
- There is also an ethical expectation for public sector organisations to lead by example in promoting fair work, inclusive employment, and transparent governance. The Labour Government’s stated aims for the Employment Rights Bill to help tackle low pay, poor working conditions and poor job security align with these values, reinforcing the need for thoughtful, proactive implementation.
2. Mapping your Organisation’s Path to Compliance
The Government published a comprehensive Employment Rights Bill “Roadmap” on 1 July 2025, which sets out a phased timetable for reform from late 2025 through to 2027 with many changes scheduled across 2026 and 2027. It provides guidance and key milestones to help employers align internal processes with the legislative changes.
Public sector organisations should treat the Roadmap as a strategic planning tool – prioritising reforms, allocating resources, and coordinating implementation across departments. Key considerations include cross-departmental coordination, especially in larger organisations, and ensuring ERB compliance is integrated with existing procurement frameworks, governance structures, and statutory equality duties.
See below key reforms that will particularly affect the public sector. Note this is not an exhaustive list – reference should be made to the full list of reforms when planning ahead.
Late 2025 – April 2026: Initial Reforms Key to the Public Sector
- Trade union reform: The ERB will ease restrictions on union activity, strengthen protections for lawful industrial action, and simplify recognition procedures. From April 2026, electronic and workplace balloting will be introduced. Public sector employers, especially those with recognition agreements, should expect increased union engagement.
- Fair Work Agency launch (April 2026): The Agency will be launched in April 2026 to promote fair employment standards and support the development of Fair Pay Bodies. Public sector employers commissioning outsourced services—particularly in adult social care and school support—should prepare for engagement with the Agency as these sectors transition to representation under Fair Pay Bodies established by the ERB.
- Statutory sick pay reform: From April 2026, the ERB will remove the lower earnings limit and the waiting period for statutory sick pay. This change will extend eligibility to more workers, including those in lower-paid or irregular roles — many of whom are engaged in outsourced public services. Public sector employers should review their sickness absence policies and ensure that any third-party providers are financially and operationally prepared to meet the new statutory requirements.
October 2026: Key Employment Reforms for Public Sector
- Preventing Harassment – Strengthened Employer Duties: From October 2026, the ERB will require employers to take all reasonable steps to prevent sexual harassment, building on the October 2024 duty. A new obligation will also apply to harassment by third parties — including service users, customers and visitors. Public sector employers should review policies, training, and reporting procedures to meet the higher standard and support frontline staff.
- Procurement Reform – The Employment Rights Bill will introduce rules to prevent a “two-tier workforce” in outsourced public services. A statutory Code of Practice is expected, requiring fair treatment for both staff transferring from the public sector and those employed by private contractors. Public bodies should start reviewing contracts and engaging suppliers ahead of changes due in October 2026.
- Further trade union reform: The ERB will introduce a duty on employers to inform staff of their right to join a trade union, with this being provided in some form of statement to employees, the format and frequency of which is currently being consulted upon. Unions will also gain enhanced access to workplaces. Public sector employers should prepare for increased union engagement.
2027: Key Employment Reforms for Public Sector
- See further detail below on unfair dismissal and zero hours contract reforms.
- Gender Pay Gap and Menopause Action Plans: From April 2026, employers will be encouraged to go beyond their existing gender pay gap reporting obligations by taking proactive steps to address pay disparities and introduce menopause support measures. These requirements will become mandatory in 2027.
Public sector employers, who already publish gender pay gap data under the Equality Act and have responsibilities under the Public Sector Equality Duty, should start preparing now by developing structured action plans to close pay gaps and formalising menopause support strategies. Priority sectors include education, healthcare, and local government, where workforce demographics make these issues particularly significant. Getting ahead of the curve by implementing these changes from April 2026 is strongly advisable.
- Flexible Working – Towards a New Default: Building on the April 2024 right to request flexible working from day one, the Employment Rights Bill will strengthen this entitlement by requiring employers to provide a clear explanation of why any refusal is reasonable, with reference to the statutory grounds relied upon.
Public sector employers should review policies, identify operational constraints, and train managers to handle requests fairly and consistently. This reform is central to retention and wellbeing strategies, particularly in sectors facing recruitment challenges.
- Collective Redundancy – Consultation Thresholds: The Employment Rights Bill will reverse the position established in the Woolworths case. During Woolworths’ collapse, the courts ruled that the duty to collectively consult applied per “establishment,” meaning stores with fewer than 20 staff at risk of redundancy were excluded. This significantly narrowed the scope of consultation. Under the new rules, the 20-employee threshold will apply across the whole organisation, making collective consultation more likely in restructures affecting multiple sites or departments.
Public sector employers should update redundancy planning processes, assess thresholds organisation-wide, and engage early with trade unions or employee representatives.
Action Points Summary
- Form a cross-functional ERB compliance group to coordinate implementation across HR, legal, and procurement.
- Conduct a legal risk audit of contracts, policies, and workforce structures.
- Prioritise reforms using the ERB roadmap and legal risk level.
- Engage stakeholders early to manage expectations and build trust.
- Review contracts to ensure outsourced services meet new standards.
- Track updates to stay informed on legislative and sector guidance.
3. Reviewing and Updating Recruitment, Induction and Retention Strategies in Line with New Rights
The ERB introduces new statutory protections that will change how public sector organisations approach recruitment, onboarding, and retention. These reforms are particularly significant in settings where casual, fixed-term, and low-hours contracts are prevalent, and where early-stage employment practices can easily carry legal risk.
Public sector employers must now take a strategic and legally informed approach to workforce planning. Recruitment and induction processes must without question be robust, transparent, and defensible from day one. Retention strategies must reflect the growing emphasis on fairness, predictability, and inclusion — not only to comply with new legal standards but also to support employee wellbeing and organisational resilience.
Key Legal Changes: Unfair Dismissal and Zero Hours Contracts
The two headline reforms under the ERB are especially relevant to recruitment and retention and are due to take effect in 2027:
- Day-One Unfair Dismissal Rights: The Employment Rights Bill will remove the current two-year qualifying period, giving employees protection from unfair dismissal from day one. To balance this, a new statutory ‘initial period’—likely nine months—will allow a lighter-touch process for certain dismissals (conduct, capability, illegality, or some other substantial reason), but not redundancy. Employers will need to hold a meeting and allow an employee to be accompanied at it, and dismissals must occur within three months after the initial period, provided notice was served during that time.
This change significantly increases legal risk for early-stage terminations and may lead to more tribunal claims, especially in large workforces. Public sector employers should tighten recruitment practices, document decisions, and monitor performance during probation to ensure issues are addressed promptly and fairly. The Bill also proposes extending the time limit for most tribunal claims from three months to six months, further increasing exposure.
- Zero Hours Contracts: The Employment Rights Bill will not ban zero-hours contracts but will introduce major restrictions to curb on what the Labour Government describes as their “exploitative” use. Employers will need to asses zero hour and low hours employees, offering guaranteed hours where actual hours worked exceed contractual minimums over a reference period (likely 12 weeks), including for agency workers. Employers must also give reasonable notice of shifts to employees and pay compensation for late cancellations.
Exceptions will apply where a worker resigns, is fairly dismissed, or where a collective agreement disapplies the provisions. Zero-hours arrangements may also remain permissible for certain fixed-term roles, subject to future guidance. Public sector employers relying on flexible staffing models, which might occur for example in social care, education, and facilities, should review zero-hours and low hour arrangements and strengthen workforce planning. Offering stability alongside flexibility will increasingly be seen as a cornerstone of ethical and legally compliant workforce planning.
Practical Action Points for Public Sector Employers
To prepare for these changes, HR and leadership teams should consider the following steps:
Recruitment:
- Review and update job descriptions, person specifications, and recruitment templates.
- Ensure selection decisions are well-evidenced through scoring matrices and interview notes, as well as consider using assessment tests.
- Store documentation securely to support audit trails and legal compliance.
Induction:
- Align induction processes with the new initial period framework.
- Introduce early performance management and feedback mechanisms.
- Use HRIS (Human Resources Information System platforms to automate probation review reminders and capture feedback consistently.
- Integrate right-to-be-accompanied procedures into dismissal documentation templates.
Retention:
- Offer guaranteed hours and flexible working options where possible.
- Embed wellbeing and inclusion into retention planning, supported by HRIS data tracking.
- Monitor flexible working requests, decision deadlines, and manager notifications.
- Track completion of training linked to sexual harassment prevention.
- Generate anonymised reports to support transparency and compliance.
These reforms offer an opportunity for public sector employers to strengthen ethical employment practices, reduce legal risk, and improve employee experience — all while aligning with the values of fairness, transparency, and inclusion that underpin public services.
4. Taking Practical Steps to Prepare Systems, Staff and Internal Communications for Change
Public sector organisations must proactively prepare their internal infrastructure to support compliance with the Employment Rights Bill. This means updating systems, equipping staff with the right knowledge, and communicating changes clearly and consistently across departments and service areas.
Systems Readiness
HR and payroll systems must evolve to reflect new legal obligations and support operational efficiency. Public sector HRIS platforms should be updated to:
- Flag contract types (e.g. zero-hours, fixed-term, permanent) to support workforce planning and legal compliance.
- Track reference periods for casual staff to identify when guaranteed hours rights are triggered.
- Record dismissal dates and reasons from day one, enabling accurate reporting and early intervention.
- Automate flexible working request workflows, including decision deadlines and manager alerts.
- Log union recognition details, access requests, and consultation templates to support collective engagement.
- Support menopause action plans and harassment prevention, by tracking wellbeing support and training completion.
These adaptations are particularly important for large public sector bodies with complex staffing structures, multiple service lines, and unionised environments. HR teams should work closely with IT, payroll, and governance colleagues to ensure systems are integrated and reporting capabilities align with statutory duties.
Staff Training and Capability Building
Managers and HR professionals must be equipped to implement new procedures confidently. Training should be:
- Practical and scenario-based, focusing on dismissal procedures, flexible working assessments, and early-stage performance management.
- Tailored to different roles, including line managers, HR business partners, and senior leaders.
- Supported by updated guidance materials, including checklists, flowcharts, and FAQs.
Public sector organisations should also consider briefing elected members, board representatives, and union officials to ensure strategic alignment and shared understanding of the reforms.
Internal Communications and Engagement
Clear and consistent communication is essential to build trust and ensure staff understand what’s changing and why. This includes:
- FAQs and guidance documents tailored to different staff groups.
- Union engagement strategies that reflect collective bargaining arrangements and consultation duties.
- Multi-channel communication, such as intranet updates, team briefings, digital newsletters, and staff forums.
Messaging should reflect ERB reforms, Equality Act duties, and organisational values around fairness, transparency, and inclusion.
Strategic Planning and Risk Management
For larger public sector employers, it is advisable to conduct a regulatory audit and financial impact assessment. This should include:
- Identifying relevant ERB developments.
- Assessing organisational risk and categorising changes as high or low risk.
- Quantifying affected staff groups using HRIS dashboards.
- Modelling cost implications and resource needs.
This proactive approach supports strategic planning, budget forecasting, and governance reporting, helping public bodies demonstrate readiness and accountability.
5. Conclusion: A Call to Action for Public Sector Employers
The Employment Rights Bill marks a transformative moment for UK employment law and public sector employers are well placed to lead the way in implementing its reforms with integrity, foresight, and fairness.
Now is the time to move from awareness to action. Whether you’re reviewing employment documents, updating HR systems, or preparing managers for new responsibilities, early planning will be key to ensuring compliance and minimising risk.
At Stephens Scown LLP, we will be launching a new ERB Audit in early 2026 to help public sector organisations assess their readiness, identify legal and operational gaps, and prioritise reforms. This will be supported by a series of training events and practical workshops, designed to equip HR teams, senior leaders, and operational managers with the tools and confidence to implement change effectively.
We invite public sector employers to engage with us early, so we can support you in building a legally compliant, inclusive, and resilient workforce — ready for the future of Employment law.
This article reflects the current proposals and commentary surrounding the Employment Rights Bill as of 13 November 2025. Some provisions remain subject to consultation and final legislative approval. Employers should seek legal advice before making significant changes to policy or practice.
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