Employment Rights Bill: equality, inclusion and diversity

The Employment Rights Bill is set to make wide ranging reforms to employment law rights and duties, some of which will need to be factored in when considering equality, inclusion and diversity strategies.

Sexual harassment

Since October 2024 employers have been under a duty to ‘take reasonable steps’ to prevent sexual harassment of employees in the course of their employment. This is to be amended to a duty to ‘take all reasonable steps' to prevent sexual harassment (expected to come into force in October 2026). The UK Government plans to give examples of reasonable steps in legislation - these will relate to risk assessments, action plans, policies, reporting mechanisms and managing complaints.

The whistleblowing rules will be amended (expected April 2026) to provide that sexual harassment disclosures will be protected disclosures where the worker reasonably believes that the disclosure is made in the public interest. This may impact how you manage complaints if you have a separate whistleblowing policy. It will also mean that sexual harassment disclosures will need to be excluded from confidentiality provisions in employment contracts and settlement agreements.

Third-party harassment

It is anticipated that employer liability for third-party harassment (which was repealed in 2013) will be re-introduced from October 2026. Employers will become liable for third-party harassment of employees in the course of employment if they fail to take all reasonable steps to prevent it. This will apply to harassment related to age, disability, gender reassignment, race, religion, belief, sex or sexual orientation and to sexual harassment. A third-party will mean anyone other than the employer or its employees, such as customers or clients.

Non-disclosure agreements

Concerns about the potential misuse of non-disclosure agreements (NDAs) led to significant Government backed amendments to the Bill in July 2025. As a result, any provision in a contract between an employer and a worker, including a contract of employment or settlement agreement, will be void to the extent that it prevents the worker from making an allegation or disclosure about harassment or discrimination, or relating to the employer's response to the harassment or discrimination or the making of the allegation or disclosure.

The new protection will not apply to an ‘excepted agreement’, which is still to be defined but potentially could include NDAs requested by a worker provided they have had independent advice.

We don’t yet have an indication of when these restrictions might come into effect. They are likely to have a major impact on settlement negotiations involving harassment or discrimination, as well as on the drafting of confidentiality clauses.

Equality action plans

If you currently have a duty to report your gender pay gap, you will need to develop, publish and implement action plans to reduce gaps - this is currently voluntary. In addition it will be mandatory to publish information about service providers for outsourced services.

The Government has also indicated that employers with 250+ employees will need to publish action plans setting out how they will support employees through the menopause.

Further consultation and regulations are expected which will set out the detail, including how often plans will need to be published (which cannot be more than every 12 months) and the penalties for non-compliance. These measures will become mandatory in 2027.

Flexible working

Since April 2024, employees have had a day-one right to request flexible working. From 2027 it will need to be 'reasonable' to refuse a flexible working request for one of the eight statutory business reasons, and you will need to explain to the employee why you consider this reasonable. There may also be additional rules regarding consultation with employees on flexible working requests.

Other proposals

There are provisions in the Bill regarding enhancements to family friendly rights and protection for women whilst pregnant, on maternity leave or within six months of returning to work - we will cover those in a later blog.

In addition, the Government has outlined its intention to bring forward a separate Equality (Race and Disability) Bill, which will introduce mandatory ethnicity and disability pay gap reporting for employers with 250+ employees, as well as new measures on equal pay.

Looking ahead

Whilst many of these reforms will not take effect until 2026 or 2027, it would be good practice to look ahead and prepare now as far as possible. Practical steps to proactively promote equality, inclusion and diversity might include the following:

• raising awareness of the proposed changes with managers so that they can properly inform equality, inclusion and diversity policies, training and strategies going forward
• reviewing the measures currently in place to prevent discrimination in particular sexual harassment e.g. risk assessments, training, policies, complaints procedures, management accountability
• considering the extent to which your whistleblowing framework is integrated with equality, inclusion and diversity policies
• auditing contract terms to highlight the extent to which confidentiality clauses will need updated
• reviewing gender pay gap narratives and any published action plans
• auditing policies on family friendly rights, flexible working and menopause
• thinking ahead about appropriate processes for collecting disability and ethnicity pay data.

Timeline and webinar

This blog is only a high-level summary of the principal changes in the Employment Right Bill impacting equality, inclusion and diversity. To keep up-to-date with all the reforms see our Employment Rights Act page and timeline. We are also running an Employment Rights Act webinar series, where we host 30-minute webinars providing practical guidance on key aspects of the reforms. Further details and links to register can be found here.

For more information on any of the above, please contact our Employment and Immigration lawyers.