The landscape of UK employment law is undergoing its most significant transformation in a generation. With the introduction of the Employment Rights Act (stemming from the Employment Rights Bill introduced in late 2024), the Labour government is delivering on its promise to implement a “New Deal for Working People.”

For employees, these changes represent a strengthening of security and flexibility. For employers, however, the Act introduces a complex new compliance landscape. From the removal of the two-year qualifying period for unfair dismissal to the overhaul of zero-hours contracts, businesses must adapt their hiring and management strategies immediately.

In this guide, we break down the critical changes introduced by the Employment Rights Act 2025, what they mean for your business, and how working with a recruitment partner like Bennett Staff can safeguard your hiring process during this transition.

1. The End of the Two-Year Rule: “Day One” Rights

Perhaps the most headline-grabbing change in the Act is the reform of Unfair Dismissal laws.

The Old Rule: Previously, an employee had to work for an employer for two continuous years before they acquired the right to claim unfair dismissal. This effectively gave employers a two-year “buffer” to assess suitability.

The New Rule: The Employment Rights Act removes this qualifying period. Protection against unfair dismissal will now become a “Day One” right.

What This Means for Employers

This fundamentally changes how businesses approach recruitment. The safety net of letting a new hire go relatively easily within the first year or two is gone. While the government has confirmed that “probationary periods” will still exist (likely capped at nine months with a simplified dismissal process), the onus will be strictly on the employer to follow a rigorous, fair, and documented process from the very start.

The Risk: A bad hire is now a much higher risk. If a new employee isn’t performing, you cannot simply dismiss them without robust evidence and procedure, or you face the risk of an employment tribunal.

2. The Ban on “Exploitative” Zero-Hours Contracts

The Act aims to end “one-sided flexibility.” While zero-hours contracts are not banned entirely, the new legislation introduces strict regulations to protect workers.

The Changes:

Guaranteed Hours: If a worker works regular hours over a defined reference period (expected to be 12 weeks), they will have the right to a guaranteed hours contract that reflects the hours they actually work.
Reasonable Notice: Employers must give workers reasonable notice of shifts and reasonable notice of cancellation.
Compensation: If shifts are cancelled at short notice, employers will be required to pay compensation to the worker.

What This Means for Employers

Sectors that rely on fluctuating demand—such as hospitality, logistics, and manufacturing—will need to improve their workforce planning. Relying on a casual workforce to sit by the phone “just in case” will no longer be financially viable or legally compliant.

3. Statutory Sick Pay (SSP) Reform

The Employment Rights Act strengthens the safety net for workers falling ill.

The Changes:

No Waiting Days: The three-day waiting period for Statutory Sick Pay is removed. SSP will be payable from the first day of illness.
Lower Earnings Limit Removed: Previously, workers had to earn above a certain threshold (historically £123 per week) to qualify. This is being removed, making very low earners eligible.

What This Means for Employers

This will inevitably increase the wage bill for businesses. Employers will need to factor increased SSP costs into their annual budgets and review their absence management policies to ensure they are supportive yet robust enough to manage the potential for increased short-term absence.

4. Flexible Working as the Default

While the right to request flexible working was already a “Day One” right, the new Act strengthens this considerably.

The Change: Flexible working is now the default for all workers from day one. Employers are required to accommodate flexible working requests as far as is reasonable. While businesses can still refuse a request, the specific grounds for refusal are narrower, and the burden of proof is on the employer to demonstrate why flexibility is not feasible.

5. Restrictions on “Fire and Rehire”

The practice of “fire and rehire”—dismissing employees and re-engaging them on inferior terms—is heavily restricted under the new Act. It will legally be treated as unfair dismissal unless the employer can prove that the business was on the brink of financial collapse and no other option was available.

The Strategic Pivot: Why Recruitment Matters More Than Ever

Given these legislative changes, the “cost” of a recruitment mistake has just skyrocketed.

Because unfair dismissal protection now starts on Day One, you need to be certain that the person you hire is the right fit before they sign the contract. You no longer have a two-year window to correct hiring errors easily.

This is where the recruitment process moves from being an administrative task to a strategic necessity. To protect your business, you need:

Rigorous vetting of candidates.
Accurate skills testing.
Cultural fit assessment.

This is exactly where Bennett Staff steps in to support local businesses.

How Bennett Staff Protects Employers in the New Era

At Bennett Staff, we have been monitoring the Employment Rights Act closely. We understand that for many businesses in Tameside, Oldham, and Greater Manchester, these changes feel daunting. Here is how partnering with us helps you navigate this new landscape safely.

1. Mitigating the “Day One” Risk with Temp-to-Perm

The most effective way to navigate the removal of the two-year qualifying period is to utilise the Temp-to-Perm model.

By engaging a worker through Bennett Staff on a temporary basis first:

We are the employer: For the duration of the temporary assignment, Bennett Staff handles the HR burden, payroll, and statutory rights.
The “Working Interview”: You get to see the candidate in action within your business environment for 12 weeks (or longer) before offering a permanent contract.
Risk Reduction: You only commit to a permanent employment contract—and the associated “Day One” liabilities—once you are 100% sure the candidate is reliable, skilled, and fits your culture.

2. Robust Vetting and Compliance

In a world where dismissing a poor performer is difficult, your front-end vetting must be watertight. Bennett Staff acts as a firewall. We don’t just CV sift; we interview, reference check, and skill-test candidates before they ever reach your desk. We ensure that the people you see are high-calibre, reducing the likelihood of performance issues down the line.

3. Managing “Fluctuating Demand” Compliantly

With the crackdown on zero-hours contracts, managing seasonal peaks (like Christmas rushes or summer holidays) becomes trickier for employers.

Bennett Staff provides a compliant solution. We maintain a pool of flexible temporary workers who are managed by us. We handle the complexities of their holiday pay, SSP, and assignment rights, allowing you to scale your workforce up and down as production demands, without falling foul of the new regulations regarding shift cancellations and guaranteed hours.

4. Expert Guidance

Recruitment legislation is moving fast. As members of the Recruitment and Employment Confederation (REC), Bennett Staff is always ahead of the curve. We advise our clients on current best practices, helping you stay compliant while you focus on running your business.

Conclusion: Adapt and Thrive

The Employment Rights Act 2025 creates a fairer workplace for employees, but it undeniably raises the bar for employers. The days of “hire fast, fire fast” are over. The future belongs to businesses that hire smart.

Don’t let the fear of legislation stall your growth. By partnering with Bennett Staff, you can navigate these changes with confidence. We provide the buffer, the expertise, and the high-quality candidates you need to build a workforce that lasts.

Call us on 0161 368 5511 or email us at info@bennettstaff.co.uk