UK 
United States
As the government refines its flagship employment legislation, people leaders must now prepare for a wave of legal and operational shifts impacting workforce planning, sick pay, and industrial relations.
Following weeks of consultation, the UK Government has announced a suite of amendments to the Employment Rights Bill marking one of the most significant overhauls of workplace protections in recent years.
For HR leaders, these developments aren’t just legal updates, they’re strategic imperatives. From zero hours reforms, to trade unions and umbrella company employment models, as well as the evolving legislation that is set to reshape how organisations manage compliance; there’s a lot to take in.
Here’s what you need to know.
1. Zero-hours reform extended to agency workers
In a landmark shift, employers will soon be required to offer zero-hours contract workers a guaranteed number of hours, based on their actual working patterns. The aim is to combat insecure working arrangements and promote predictability in scheduling.
The government has confirmed that these reforms will now extend to agency workers too, offering them the same protections around guaranteed hours, minimum shift notice, and compensation for short-notice cancellations.
For HR teams managing contingent workforces, this signals the need for tighter rota planning and enhanced agency oversight.
2. Collective redundancy: higher penalties, wider reach on the horizon
Currently, a duty to collectively consult is triggered when 20 or more redundancies are proposed at a single worksite. While the government initially planned to extend this headcount across multiple sites, it has temporarily stepped back, while retaining the power to revisit the issue through secondary legislation.
However, penalties for breaching collective consultation requirements will double, from 90 days’ pay to 180 days’ pay per affected employee.
This is a clear message that a failure to engage in lawful redundancy processes will now carry far more severe financial consequences.
3. No interim relief for ‘fire and rehire’ claims
The government has dropped plans to introduce ‘interim relief’ in fire-and-rehire or collective redundancy cases. The government had originally suggested that where an employee brought a claim that their employer had breached the new laws around fire-and-rehire or failed to collectively consult in a redundancy situation, employers would have been required to continue paying dismissed staff while tribunals decided their case. This is no longer going to be included in the Bill.
While this will be welcomed by some employers, there is no change around the plan to ban fire-and-rehire practices and HR leaders should still approach any such restructuring with extreme caution and full legal oversight.
4. Industrial relations: trade union laws under review
Framed as a step towards ‘modernising’ industrial relations, the government has confirmed it will update the legal framework around trade union activity. Although specific measures are yet to be finalised, HR professionals should expect regulatory changes aimed at aligning union operations with contemporary employment practices and digital working environments.
5. Statutory Sick Pay (SSP) access to broaden
Two major reforms to SSP are on the table:
SSP will become payable from day one of absence, eliminating the current three-day waiting period.
The lower earnings limit will be scrapped, meaning even low earners who are paid under £125 per week will qualify.
However, a caveat has now been added. Eligible low earners will receive either 80% of their average weekly earnings or the standard SSP rate, whichever is lower.
This move could affect payroll systems and cost modelling, particularly for employers with large part-time or hourly-paid workforces.
6. Umbrella company loopholes closed
Umbrella companies, often used by recruitment agencies, have long been a grey area in employment protections. The Bill now introduces safeguards to ensure that workers employed via umbrella structures retain the same rights and entitlements as directly employed staff.
For talent acquisition and workforce planning teams, this could prompt a review of agency partnerships and contracting frameworks.
7. Government to gain new powers on wage underpayments
The government will now be able to issue notices of underpayment to employers for breaches of wage-related legislation, including National Minimum Wage and SSP, for a period stretching back six years.
This retrospective liability creates clear compliance risk, and HR and payroll leaders should now revisit historical wage data and audit processes to ensure alignment.
Next steps for HR leaders
While several of these amendments still require further legislation or detailed guidance, the direction of travel is clear: greater employee protections, tougher employer obligations, and increased scrutiny over pay and redundancy practices.
Strategic HR teams should now:
Audit existing contracts and HR policies for compliance risks
Prepare to engage more meaningfully with agency staff and contingent workers
Strengthen redundancy planning protocols and consultation processes
Review SSP administration and systems ahead of upcoming changes
With more regulatory detail expected in the coming months, staying ahead of the curve will be critical.
Need expert advice?
To help organisations adapt, Employment Hero’s HR Advisory Team is tracking these legislative shifts and supporting businesses with policy reviews, contract updates, and compliance strategy.
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Employment laws are changing fast—are you ready? From automated contracts to expert HR support and compliant payroll, Employment Hero gives you the tools to adapt with confidence. Stay compliant, save time, and protect your business—without the stress.
