Following a series of talks between unions and employer groups, the Government says the Employment Rights Bill will proceed on schedule. In a GOV.UK update, ministers confirmed plans to deliver day-one rights to sick pay and paternity leave in April 2026, alongside the launch of a new Fair Work Agency. For employers, the timetable matters: it sets a clear horizon for HR, payroll and workforce planning.

The most material legal change is to ordinary unfair dismissal. The qualifying period will be reduced from 24 months to six months, while existing day-one protections against discrimination and automatically unfair dismissal remain in place. The Government has also committed that any future change to this threshold must be made by primary legislation, and that the compensation cap will be lifted-points that raise clarity but also potential liability for employers.

For finance directors and HR leads, April 2026 becomes the working date for day-one eligibility across sick pay and paternity leave. That means revising onboarding material, contracts and handbooks so new starters have the same access to these entitlements from their first day of employment. The window to prepare is welcome, but leaving the work to late 2025 risks rushed implementation and avoidable cost.

Cost pressures will show up early in tenure. Day-one sick pay creates liabilities sooner, and day-one paternity leave brings forward rota and cover challenges. A 40-person hospitality operator, for example, may need a slightly larger casual pool or cross-trained staff to protect service levels during short-notice absences. Manufacturers running lean shifts may prefer to lock in agency capacity ahead of peak periods to avoid production bottlenecks.

The shorter unfair dismissal window will change how firms manage probation. Many employers use a six-month probation as standard; that now coincides with the proposed claim threshold. To manage risk, line managers will need earlier performance check-ins, clearer written feedback and documented support between months two and five so that any end-of-probation decision is both fair and well evidenced.

For employees-particularly in lower-paid or high-turnover roles-the package brings earlier security. Access to sick pay and paternity leave from day one closes known gaps for new starters, while the six-month unfair dismissal threshold offers an earlier route to challenge poor practice. Day-one protection against discrimination is unchanged.

According to GOV.UK, unions and business groups concluded the amendments form a workable package that lets the Bill progress. Ministers have promised a full, fair and transparent consultation on the secondary legislation that will set out the detailed rules. The Government also signalled targeted support for small firms to adopt the changes effectively.

The Fair Work Agency is expected to launch as part of this programme. While detailed functions will follow through consultation, the intention is to support good job creation and provide clearer enforcement. For smaller employers, consistent guidance from a single body can reduce disputes and lower compliance costs over time.

What should companies do now? Start with a legal and HR audit: identify where policies and templates rely on the current 24-month rule, update contract and handbook language for day-one eligibility, and schedule manager training well ahead of April 2026. Finance teams should re-cut 2026 budgets to allow for modest uplifts in absence cover and a potentially wider range of early-tenure claims.

Politically, this keeps Ministers aligned with their ‘Make Work Pay’ manifesto line while giving businesses a defined runway. For founders and investors, the takeaway is planning rather than panic. The direction is set; the remaining variables sit in the consultation detail. Watch for definitions, interactions with existing statutory schemes and any transitional provisions as the Bill moves toward Royal Assent.