The future of work: People strategy and employment rights roundup

Navigating change, legal compliance and rising business costs

2025 is shaping up to be a year of rapid change for HR teams in the UK. From evolving employment laws to rising business costs, organisations must navigate a new landscape that calls for agility, strategic foresight and a people-first approach.

The Employment Rights Bill is one change that could significantly impact the way businesses manage their workforce. But with rising costs and mounting regulatory demands, how can HR leaders strike the right balance between compliance, cost control and employee welfare? Let’s explore the key challenges ahead and the strategies that can help businesses prepare.

The future of employment rights

The Employment Rights Bill is one of the most significant changes to UK employment law in decades, with wide-reaching implications for businesses. Currently at the ‘Report Stage’ after an extensive committee review, the Bill could reshape employer-employee relationships. Here are the key proposals that HR teams should be aware of:

• Day-one right to unfair dismissal: Unfair dismissal rights will apply from the first day of employment, instead of the current two-year qualifying period.
• Day-one right to Statutory Sick Pay (SSP): Employees will be entitled to SSP from day one, which could increase short-term absence costs and complicate payroll.
• Stronger harassment laws: Employers could be held liable for harassment by third parties (e.g., clients or customers), requiring a broader duty of care.
• Boosted Trade Union rights: Easier union recognition and greater access to workplaces could lead to increased union activity.
• Lower threshold for collective redundancies: The Bill lowers the thresholds for initiating collective redundancy consultations.
• Fire and re-hire ban: Employers will face restrictions when dismissing and rehiring employees under new terms.
• Exploitative zero-hours contracts: Businesses will be required to offer contracts with a minimum number of guaranteed hours.
• Mandatory gender pay gap action plans: Employers with a gender pay gap will need to implement action plans to address it.
• Day-one family rights: New parents will be entitled to family leave and pay from day one.
• New fair work agency: A dedicated agency to enforce employment law provisions, leading to stricter monitoring and more potential fines.

The combination of higher NI, rising minimum wages, and these new worker protections creates what some are calling a ‘perfect storm’ for businesses. Employers must invest in compliance while managing increased operational costs.

Change, compliance and compassion

According to Stefan Mars, Head of Legal at Halborns, the Employment Rights Bill brings significant changes that require early preparation. “Although most provisions won’t take effect until 2026, now is the time to get ahead of the curve.”

He also highlights the recent update to collective consultation duties, which was introduced on 30th January 2025, and increases penalties for non-compliance, “If an employer fails to comply with their duty to collectively consult about a redundancy situation affecting 20 or more employees within a 90-day period, employment tribunals can now increase the compensation paid to each employee by up to 25%,”

Clare Cowan, Commercial Director at Working Transitions, highlights the importance of empathy during organisational change: “While compliance is critical to mitigate legal risk, excluding compassion from the process can create its own set of risks. Done with empathy, the lasting impact on employees will be far less damaging.”

With research showing that 4 out of 5 organisations expecting large-scale redundancies this year, here are key actions HR leaders should take to ensure both compliance and compassion during times of change:

• Ensure that all employees are informed about changes, with honest messaging to reduce uncertainty and build trust;
• Offer career counselling, job assistance programmes, and resources to help employees transition. Find support here;
• Ensure that managers have the skills and knowledge to lead their teams through change and provide emotional support;
• Offer wellbeing programmes for both departing employees and those remaining to support mental health during challenging times.

*The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 is the legislation introducing the change.

A strategic approach to business success

While many finance leaders see cost reduction as a top priority, focusing solely on short-term financial gains could prove counterproductive. Simon Fowler, CEO of Empowering People Group, argues, “The focus should be on long-term success – HR has a key role in building leadership, development and wellbeing strategies that drive sustainable cost savings.”

Clare agrees, adding: “While we’re facing a perfect storm of challenges, we need to approach this as an opportunity for transformation. By strategically managing change, HR can help the organisation thrive in the long run.” Here are some focus areas:

Empowering line managers and bridging capability gaps

Stronger leadership is directly tied to employee engagement, retention and performance. However, the role of the “accidental manager” – those promoted for technical skills rather than leadership experience – requires special attention. By equipping line managers with the tools and training to be effective leaders, businesses can significantly boost team productivity and success.

Strategic workforce development

With a tight labour market, upskilling existing employees is key. Investing in continuous learning can improve productivity, drive innovation, and reduce recruitment costs – all while building organisational resilience. This is crucial when workforce expansion is limited by economic pressures.

Technology-enabled transformation

Digital solutions can streamline HR processes and offer data-driven insights, freeing up time for more strategic decision-making. Simon, explains: “By leveraging employee relations case management technology, organisations can identify root causes of issues – whether that’s poor culture, low performance, or wellbeing challenges – and proactively address them.” Technology-driven decisions can help HR to enhance workforce analytics, employee wellbeing and overall organisational culture.

Looking ahead: Strategic priorities for HR

As we move through 2025, HR leaders should focus on the following strategic priorities:

• Review and update people policies: Ensure that policies align with new legislation;
• Invest in line manager capability: Equip managers with the training and support needed to lead through change;
• Implement technology solutions: Adopt case management tools to streamline people management and employee relations processes and improve decision-making;
• Build organisational resilience: Through strategic workforce planning and learning and development;
• Adopt compassionate change management: Build empathetic approaches to organisational change that support employee wellbeing.

Stefan stresses the importance of preparation: “With the recent increase in compensation limits and more changes ahead, now is the time to engage with these issues and ensure your business is prepared for the evolving landscape.”

Supporting HR transformation

At the Empowering People Group, we have the expertise to support your HR teams, line managers and broader organisational goals. Our integrated services provide a comprehensive approach to the challenges outlined in this article:

• Employment law guidance: With Halborns, ensure compliance with the latest legislation;
• Career management support: Through Working Transitions, offer career coaching and outplacement services to help employees navigate transitions;
• Technology and policy solutions: AdviserPlus provides tools to streamline people processes, enable data-driven decision-making and help HR teams update their policies;
• Training and development: Learning Nexus offers training programmes that empower managers and teams to drive organisational success.

Whether you’re preparing for the Employment Rights Bill, enhancing your redundancy processes, or transforming your approach to people management, we’re here to help you navigate these changes successfully. Contact us today to discuss how we can support your organisation’s specific needs and objectives.