When we wrote about the Employment Rights Bill in December 2024, the legislation was still a work in progress. Since then, the government has moved through several rounds of consultation, revised its implementation dates more than once, and brought the first tranche of changes into force this month. What looked like a single legislative event has turned out to be a rolling programme of change running through to at least the end of 2027.
For pharmaceutical, medtech, and biotech organisations operating in the UK, whether long-established or newly arrived, the picture is now clearer, and the implications deserve a closer look.
The original bill proposed day-one unfair dismissal rights as a single reform, to be implemented in autumn 2026. The government subsequently split the implementation into distinct phases in response to pressure from employer groups. The most consequential change, reducing the unfair dismissal qualifying period from two years to six months, was moved to January 2027. The restrictions on fire and rehire were also pushed back from October 2026 to January 2027.
That rescheduling gave organisations more time to prepare. But it also created a layered compliance picture that can be harder to manage than a single change arriving on a single date. Different rights, different timelines, different levels of legal exposure.
The UK employment law changes now in effect are primarily operational, but they carry real cost and process implications.
Statutory Sick Pay from day one: The three-day waiting period is gone. Employees are entitled to Statutory Sick Pay (SSP) from the first day of illness, at a new rate of £123.25 per week, and the lower earnings limit has been removed, meaning those earning under £125 per week now qualify. The direct cost is modest, payable for up to 28 weeks, but the indirect cost, in terms of absence frequency and management time, is harder to quantify. Return-to-work interviews and Bradford score monitoring will now be more important.
Paternity and parental leave: Paternity leave is now a day-one right for parents with babies born on or after 6 April 2026. The entitlement no longer requires 26 weeks of service, though statutory paternity pay still does. Unpaid parental leave has also moved to a day-one entitlement, removing the previous requirement for one year of service.
Redundancy consultation penalties doubled: The maximum protective award in collective redundancy situations has doubled, from 90 to 180 days’ pay per employee. For any organisation that has restructured UK operations in the past or might do so in future, this change materially alters the cost of getting the process wrong.
Whistleblowing protections: Protections for employees who report sexual harassment have been strengthened. It is now explicitly unfair to dismiss someone for making a disclosure of this kind.
Bereaved Partner’s Paternity Leave: A new entitlement gives the surviving partner of a child’s mother or primary adopter the right to time off (up to 52 weeks) if the mother or primary adopter dies within the first year of the child’s life.
The Fair Work Agency: A new enforcement body launched this month with the power to investigate and penalise non-compliance with holiday pay, SSP, and the National Minimum Wage. It has investigative powers, the ability to name and shame non-compliant employers publicly, and the intent to use both.
Extended employment tribunal windows: The time limit for bringing employment claims doubles from three months to six. For UK employers, this means the period of potential exposure is significantly longer, and documentation needs to be retained and well-organised accordingly. A claim that would previously have been time-barred at three months can now arrive six months after an employee’s departure.
Third-party harassment liability: Employers become legally responsible for preventing harassment of their staff by third parties (clients, customers, contractors, visitors). The standard moves from “reasonable steps” to “all reasonable steps,” with regulations expected in October to define what this means in practice. Good practice includes risk assessments, clear reporting mechanisms, and consistent follow-through on complaints. For life sciences companies whose commercial teams spend time in NHS environments, hospital sites, or at industry events, this warrants attention before the deadline.
Trade union access: Recognition procedures are simplified, and unions gain new rights of physical and digital access to workplaces. Combined with the removal of the 50% ballot turnout threshold and the extension of industrial action mandates from six to 12 months, the conditions for lawful industrial action are more favourable to unions than at any point in recent decades. Increased union activity in sectors with limited current union presence is the likely result.
This is where the Employment Rights Act 2025 changes the fundamentals of UK employment law in ways that will affect hiring decisions, not just HR procedures.
The unfair dismissal qualifying period falls from two years to six months: This change will reconfigure how organisations think about probation, early performance management, and the decision to bring someone on as a permanent employee. Currently, a company can dismiss an underperforming employee within their first two years without risking an unfair dismissal claim. From January 2027, that window narrows to six months. After that point, any dismissal is subject to full scrutiny of process, justification, and documentation. One point worth noting: because the change applies to employees already in post, anyone hired from the end of June 2026 onwards will gain the new protection from January 2027.
Compensatory awards become uncapped: At present, tribunal compensation for unfair dismissal is capped, but that cap goes in January 2027[CM2.1]. The combination of a shorter qualifying period and uncapped awards creates a fundamentally different risk profile for permanent employment in the UK.
Fire and rehire is restricted: Employers seeking to change employment terms by terminating and re-engaging will need to demonstrate genuine business necessity and meaningful consultation. The tactical use of this approach will become significantly harder to sustain.
A number of further UK employment law changes are expected, though without confirmed dates. These include stronger dismissal protections during and after pregnancy and maternity leave, mandatory gender pay gap and menopause action plans for larger employers, bereavement leave as a day-one right, new collective redundancy consultation thresholds, and a requirement to provide written explanations when refusing flexible working requests.
The legislation is designed with established UK employers in mind, but its effects fall particularly on organisations with limited UK experience. A pharmaceutical or medtech company launching in the UK, or running a small UK affiliate, is unlikely to have the HR infrastructure that can absorb these changes without significant internal effort.
The January 2027 reforms change the calculus around making someone a permanent employee. Consider what the six-month qualifying period means in practice. An organisation hiring a commercial lead, a market access manager, or a medical science liaison for a UK launch currently has two years to assess fit and performance before full employment rights crystallise. From January 2027, that window narrows to six months. If a hire is not working out at month five, the company has a very short runway to act. From month seven, any dismissal requires a full process and carries the risk of uncapped tribunal liability.
For companies unfamiliar with UK employment law, the scope of that process is often underestimated. It is not simply a matter of issuing notice. It involves documented performance concerns, a genuine opportunity to improve, formal meetings with the right to accompaniment, and a clear paper trail throughout. Tribunals look closely at the process, so getting the substance right, but the process wrong, still results in an unfair dismissal finding.
There is an approach that several pharmaceutical and medtech companies use when entering the UK or testing a new commercial strategy. It’s an approach which the new employment law framework makes considerably more relevant: working with an outsourced team provider where the employment relationship sits with a specialist third party rather than with the client organisation.[CM3.1]
CHASE has operated this model in UK life sciences for over 25 years, building and managing outsourced commercial, medical, and nursing teams for pharmaceutical, medtech, and animal health organisations. In practice, the client directs the work; CHASE employs the people.
Because the employment relationship sits with CHASE, the client is not exposed to the risk of unfair dismissal, the pressure of the probation period, or the documentation requirements created by the new legislation. A company can work with a high-performing individual in this structure for 12 months, build a clear picture of capability and fit, and then bring them in-house, if that is the right decision, with confidence.
For organisations still assessing the UK market, the model also preserves optionality. If a launch does not go as planned, or if the strategic direction changes, an outsourced team can be scaled or restructured without the legal exposure that comes with directly employed staff under the new framework.
This approach offers a way to engage seriously with the UK market while managing the legal and operational complexity that UK employment law now presents, particularly in the period before establishing a permanent in-house team. Working with CHASE, with our depth of experience in building and managing outsourced teams in the UK, offers a real strategic advantage to our clients.
For organisations that already have directly employed UK staff, the next nine months are the period to review processes and documentation.
Probation periods: The current thinking among UK employment advisers is that probation periods should ideally be set at four to five months to allow a decision on a poor fit before the six-month qualifying period arrives in January 2027. Extended probation periods will not reset the clock.
Performance management records: With employment tribunal windows doubling to six months, documentation must be retained longer and be comprehensive enough to be used in a claim heard months after the events it describes. A brief email note is not the same as a documented one-to-one with clear records of what was discussed and agreed.
Third-party harassment risk: Before October 2026, it is worth reviewing how commercial teams interact with customers and clients, what reporting mechanisms are in place, and whether risk assessments cover the environments where employees regularly work.
Collective redundancy: The new framework counts redundancies across projects collectively rather than project by project. If headcount has been managed on a project-by-project basis, this requires a broader view of the numbers.
The Employment Rights Act 2025 reflects a clear government intention to shift the balance of the employment relationship in the UK. The phased implementation means the full picture will not be in place until late 2027, but it’s clear that unfair dismissal protections will be stronger and will arrive earlier in an employee’s tenure. Enforcement will be more active, and the cost of getting things wrong will be higher.
For life sciences companies operating in the UK, the practical response is a combination of better internal processes for those with established UK teams and a more considered approach to employment structures for those still building their presence. The organisations that will find this period most manageable are those that treat the legal framework as something to plan around from the start, not a problem to solve after a hiring decision has already been made.
CHASE is the UK’s leading independent partner for outsourced team solutions in the life sciences industry and the NHS. If you would like to discuss how an outsourced team structure can work for your UK operation, get in touch.
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