As the Employment Rights Bill (ERB) wends its way through the legislative machine towards Royal Assent – likely to be this Autumn – the government says the changes it proposes represent the biggest upgrade in employment rights for a generation. Not surprisingly in the face of such wide-reaching changes to employment rules, ICAEW members have expressed concerns about the ERB’s potential impact.

For businesses and employers, particularly those supported by ICAEW members, the Bill certainly presents a formidable compliance challenge, particularly for SMEs with limited HR resources. But it’s also an opportunity to modernise workforce practices.

With key changes across 28 reforms being phased in from April 2026 and through 2027, there is time for preparation. Ruth Cornish, Founder and Director of HR consultancy Amelore, says preparation is key. “Employers who get their houses in order early and start planning now to ensure they are fully compliant will show themselves in a good light and get ahead of the curve.”

To effectively navigate the ERB, employers should adopt a proactive, phased approach in line with the government’s implementation roadmap, says Chris Garner, Managing Director of employment law advisers Avensure. “Employers should begin by reviewing the roadmap to understand key timelines, including any immediate changes and the reforms deferred until 2027, including day-one unfair dismissal rights and zero-hours contract bans.” 

Garner advises working with legal teams and HR advisers to assess the impact on existing policies, particularly in relation to dismissal procedures, sick pay and parental leave. “Small businesses should prioritise updating payroll and IT systems to align with new statutory rights, such as enhanced sick pay for low earners and tailored support options outlined in the roadmap,” Garner says.

Assessing potential pitfalls

Potential pitfalls include underestimating the scope of the reforms, such as the complexity of transitioning from zero-hours contracts to contracts with guaranteed hours, or failing to train managers on new dismissal processes to avoid tribunal claims, Garner warns. 

“To address any potential challenges, employers should conduct impact assessments promptly, allocate budget for system upgrades and seek legal advice to ensure compliance. Regular training and clear communication with employees about their new rights, such as protection from unfair dismissal from day one, will help to mitigate risks,” Garner says.

The government’s proposed amendments temper the impact for employers of the original provisions designed to end the practice of so-called ‘fire and rehire’, explains Luke Bowery, Head of the Employment team at UK law firm Burges Salmon. “While the proposed amendments to the Bill will still provide employees with very significant protection from this practice, the ability for employees to veto all contractual changes has been curbed.

“The best way for employer and employee to address the need for contractual change is to seek agreement through consultation. Where that isn’t possible, the government’s proposed amendments still see employees offered very significant levels of protection from fire and rehire where employers are seeking to change core elements of the contract of employment including pay, pensions, hours of work and time off,” Bowery says. A tightened regime will also apply in relation to other types of change.

Given the changes, managing employee relations and trade union relationships is going to be an increasing requirement. “Organisations will need to ensure that their strategic workforce plans have this change built in. And they would do well to look at tech support and IT systems for this, and indeed, automate where possible,” Cornish says.

Employers should also ensure the highest standards of record-keeping in the event of inspections or claims by employees. Businesses will also need to plan ahead to ensure they can handle the expected increase in Subject Access Requests, Cornish advises.

Benefits for businesses

Although the Employment Rights Bill introduces compliance demands, it does offer substantial benefits for businesses, which could in turn create positive opportunities. Enhanced worker protections, such as fair pay agreements and improved job security, can boost employee morale, retention and productivity, fostering more resilient workplaces, Garner says.

“The creation of the Fair Work Agency in early 2026 will ensure a level playing field, preventing rogue employers from undercutting compliant businesses. By promoting better workplace relations, businesses can enhance their reputation and attract talent in competitive markets,” Garner says. 

“The phased implementation allows businesses to plan strategically, aligning changes with growth objectives. For accountants advising clients, emphasising these benefits – coupled with proactive compliance strategies – will position them favourably in navigating these landmark reforms.”

Joanne Leach, Senior Associate at law firm Lawrence Stephens, agrees that there are many business benefits to be reaped from the changes afoot. “Handled well, implementation of these reforms could enhance retention, improve transparency and position businesses as employers of choice. Implementation of the ERB won’t be just about compliance – it will be an opportunity to future-proof workforce strategy. 

“The new right to request predictable hours will require a rethink for sectors reliant on casual labour, but it also offers a chance to build more stable, engaged workforces. Agency workers will see meaningful gains in transparency and protection. Employers must ensure these workers are not overlooked in compliance planning,” Leach adds.

For many employers, the implementation of the ERB won’t just be a policy update – it will require a cultural shift, Leach believes. “One of the biggest risks is inconsistency: applying new rules unevenly across teams or locations could open the door to discrimination claims.”