Employment Rights Bill: Key implications for the Pharmaceuticals and Life Sciences Sector
The Employment Rights Bill will introduce significant changes impacting employers across all industries. For pharmaceuticals and life sciences organisations, these changes come as workforce expectations evolve and sustainability becomes a marker of good governance. Employers that align legal compliance with fair and transparent employment practices will be best placed to attract and retain skilled talent in a competitive market.
This briefing highlights key areas of focus for the pharmaceuticals and life sciences sector and provides an update on the Bill’s progress through Parliament.
Parliamentary update: Lords’ rejections and what happens next
The Employment Rights Bill, which some had thought would complete its passage on 28 October 2025, has been sent back to the House of Commons after the Lords approved several amendments opposed by the Government. The debate extended into the evening and saw peers vote through a number of key changes, including an amendment tabling a six-month qualifying period for unfair dismissal rights, and a mechanism to allow zero hours workers to opt-out of the right to receive guaranteed hours offers.
The Lords’ amendments reflect ongoing concern about the potential impact of the Bill’s measures on both employers and workers. The Government has maintained that it will not “water down” its manifesto commitments, while peers and business groups have warned that some provisions could increase administrative and cost pressures, particularly for smaller employers.
The Commons will consider the Lords' amendments on 5 November.
Key areas to watch for the pharmaceutical and life sciences sector
Irrespective of the parliamentary “ping-pong” between the Commons and Lords, the Bill is set to reshape how employers recruit, manage and restructure their workforce. For a sector where compliance and workforce planning are critical, the below developments merit particular attention.
Dismissal and re-engagement (fire and re-hire)
From October 2026, new restrictions will significantly limit employers' ability to dismiss and re-engage staff to impose contractual changes where agreement cannot be reached.
Currently lawful under the “some other substantial reason” (SOSR) category, this practice will in most cases be automatically unfair where the dismissal is to enforce a “restricted variation” - such as changes to pay, hours, time off or pension terms. The reforms will also close the “fire and replace” loophole, preventing dismissal and substitution with non-employees performing the same work.
While changes will remain possible through genuine mutual agreement, dismissal and re-engagement will no longer be a routine tool for implementing contractual change. Employers planning restructures or portfolio realignments should start considering alternative approaches. A transparent and people-centred approach to change will be essential to maintain trust and engagement across the workforce.
Unfair dismissal
Whilst the Lords are pushing for a six-month qualifying period for unfair dismissal, the Government has so far maintained its commitment to making unfair dismissal a day-one right. This would remove the current two-year qualifying period and is expected to take effect from 2027.
Under the government's current proposals, the Bill will establish an Initial Period of Employment (IPE). This is currently expected to last nine months, and will allow for a lighter-touch process during that time, for dismissals relating to conduct or capability. However, business-related dismissals such as redundancy or restructuring will require a full and fair process from day one.
Clear communication, early intervention, and supportive management during the probationary period will be key to avoiding disputes once the new protections take effect. Embedding fairness and consistency from the outset reinforces a culture of respect and accountability, reflecting good governance and the principles of responsible employment.
Zero hours workers
From 2027, the Bill is expected to introduce new rights for qualifying zero-hours and low-hours workers to promote predictability and fairness in working patterns.
Employers will be required to offer qualifying workers a contract based on their average hours over a designated reference period, currently expected to be 12 weeks. Workers will also gain rights to reasonable notice of shifts and compensation for late cancellations or changes, with similar protections extending to agency workers.
Peers have backed Lord Fox’s revised amendment allowing employees, after the initial reference period and offer of guaranteed hours, to opt out of further reviews and offers, with the flexibility to opt back in at any time. The Government opposed the change but indicated a willingness to continue discussions.
For employers in the pharmaceutical and life sciences sector, the proposed Government changes will mean greater scrutiny of casual engagement models, including clinical trials, seasonal production and research support roles. Mapping current patterns of work now will help identify where contracts or scheduling systems may need adjustment.
Preparing for change
Once agreement is reached between the Houses, the Bill will receive Royal Assent and become law. Many provisions will then depend on secondary legislation and guidance to clarify their practical effect, including:
- the criteria for guaranteed hours
- the operation of the new unfair dismissal framework and the IPE
- how the new rules interact with existing employment law frameworks.
Taking early, planned action to adapt policies and workforce structures will help employers meet new legal standards while also advancing wider goals of stability, transparency and social sustainability across their operations.
Our Employment Rights Bill Tracker provides more information on all of the keys areas of change proposed under the Bill as well as up-to-date information on each stage of the Bill’s passage.
How we can help
Through our Employment Retainer, we support clients in the pharmaceuticals and life sciences sector to anticipate and implement legislative change efficiently. Our team provides pragmatic advice on policy updates, workforce design, and the integration of sustainability objectives within HR strategies, helping clients navigate not only legal compliance but also the wider expectations of regulators, investors, and employees.