1 October, 2025
FOR INTERMEDIARIES ONLY
Employment Rights Bill - broker's guide to supporting SMEs
New legislation under the proposed Employment Rights Bill, billed as the most significant upgrade to workplace protections in a generation, had its third reading at the House of Lords on 3 September. The bill is expected to be given Royal Assent and will amend the Employment Rights Act 1996.
Should the bill be passed, the reforms could place an additional strain on small businesses, who may already be grappling with rising costs in a challenging economic climate.
What measures are in the Bill?
- Remove the two-year qualifying service requirement for unfair dismissal claims, making it a day-one right.
- Restriction of ‘fire and rehire’ and ‘fire and replace’ practices. It’ll be considered unfair to dismiss an employee for failing to agree to changes to their employment contract (except where businesses genuinely have no alternative).
- Expansion of redundancy consultation rules - a new additional threshold will be introduced based on the number of redundancies across the employing entity as a whole.
- Tighter obligations around zero hours contracts, where workers have a right to guaranteed hours, payments for short-notice cancellation of shifts, and reasonable notice of shifts.
It also introduces new enforcement powers via a Fair Work Agency and bolsters rights to flexible working, sick pay, and bereavement leave.
As a broker, you can proactively support your customers in navigating these proposed changes.
Helping SME customers to prepare:
- Educate and inform: Keep your customers informed about the specifics of the proposed bill and the potential implications for their businesses. Encourage your customers to conduct a thorough risk assessment to identify areas where they might be vulnerable under the new legislation.
- Consider Legal Expenses Insurance: Commercial Legal Expenses Insurance can offer crucial support in managing legal risks. It provides cover for legal issues such as contract disputes, disputed debt, data protection breaches, commercial tenancy issues, employment disputes in tribunals, as well as other legal challenges.
- Make use of Allianz Legal Services: Inform your customers about the comprehensive support offered by Allianz Legal Services, which includes tailored legal advice and document templates, designed for customers who have Legal Expenses Insurance. These services can help SMEs develop robust employment policies and agreements, helping to ensure compliance with new regulations.
By taking these steps, you can help your customers not only comply with the proposed legislation but also leverage it as an opportunity to strengthen their business operations and employee relations.
