75% of businesses unprepared for new employee rights rules, warns lawyer

Most UK businesses are not ready for major new employee rights, said Roy Magara, solicitor advocate and founder of Magara Law. 

The Employment Rights Bill, which passed through the House of Lords and received Royal Assent at the end of 2025, will come into effect on 1st January 2027.

Magara said: “Many organisations are still operating with outdated assumptions about flexibility and probation. 

“The two-year safety net for unfair dismissal will be replaced, and employers will need to justify their actions from day one. 

“If it came into force today, around three-quarters of employers simply wouldn’t be ready. It represents a fundamental shift in employment risk.”

Research from FGS Global found 58% of over 500 UK businesses had little or no awareness of the changes. 

The Bill will bring day-one rights to sick pay and paternity leave starting April 2026.

Magara said key sectors like retail, hospitality and logistics are not prepared.

Magara added: “Too many employers don’t have the systems or documentation in place to manage these changes. 

“In flexible-work sectors, the failure to track hours or formalise regular shift patterns could lead to costly claims. Meanwhile, poorly drafted contracts or probation clauses could fall short of new legal standards, which need to stand up to legal scrutiny from day one.”

The Bill will also make it possible for employees to request flexible working from day one, strengthen redundancy protections for those returning from parental or family leave, and limit ‘fire-and-rehire’ practices. 

He said: “Too many businesses still rely on HR templates written for a different legal era. 

“Unless those are updated now, the reality is they could find themselves non-compliant on day one of the new law.”

To help employers prepare, Magara Law has set out a compliance framework covering contract reviews, manager training, new probation systems and redundancy checks. 

Magara added: “Policies alone won’t fix the culture in a company. Businesses need to ensure their managers are trained, their processes are consistent, and their decisions are properly recorded.”