Compliance Updates: What Recruiters & MSPs Need to Know

Recruitment compliance in the UK is evolving rapidly in 2025, with significant legislative reforms and heightened regulatory expectations. For recruiters and Managed Service Providers (MSPs), staying on top of these changes is essential—not only to avoid penalties, but also to maintain trust and deliver value to clients and candidates.

Key Employment Law Changes in 2025

Employment Rights Bill (ERB): The Employment Rights Bill is the most notable development, introducing reforms expected to come into force from 2026. Recruiters and MSPs should prepare now for these changes.

Day One Rights: Employees will soon have the right to claim unfair dismissal from their first day of employment, replacing the current two-year qualifying period. This change means agencies and MSPs must review onboarding, probation, and termination processes to ensure compliance.

Zero-Hours Contracts: The ERB aims to address “exploitative” zero-hours contracts. Employers will need to offer guaranteed hours to workers who regularly work beyond their stated minimums, based on a 12-week reference period. Workers must also be compensated for cancelled or shortened shifts, and given reasonable notice for changes.

Fire and Rehire: Restrictions on dismissing employees and re-engaging them on new terms will become much tighter. From January 2025, new protective awards of up to 112.5 days’ uncapped pay per affected employee will apply for non-compliance with the updated Code of Practice. Employers must show genuine consultation and that dismissal is a last resort.

Harassment and Third-Party Liability: Since October 2024, employers have a statutory duty to take all reasonable steps to prevent sexual harassment. The ERB extends this, making employers liable for harassment by third parties (such as clients or suppliers) and classifying disclosures about sexual harassment as protected whistleblowing.

Flexible Working and Family Rights: The ERB strengthens flexible working rights, requiring employers to provide specific, reasonable grounds for refusal. Additional day-one rights include extended statutory sick pay, unpaid parental leave, paid bereavement leave, and enhanced maternity protections.

Practical Implications for Recruiters & MSPs

● Review contracts and policies to ensure employment contracts, handbooks, and onboarding materials reflect new day-one rights, zero-hours protections, and flexible working rules.

● Audit recruitment practices so job adverts, screening, and selection processes comply with expanded discrimination and harassment protections.

● Strengthen consultation procedures for any contract changes or redundancies by following the new statutory codes and maintaining clear, documented consultation records.

● Enhance record-keeping in preparation for increased scrutiny by maintaining robust documentation of all hiring, onboarding, and employment decisions.

● Train staff regularly on new legal requirements, especially around unfair dismissal, harassment prevention, and family rights.

How expressHR Can Help

Navigating this complex compliance landscape can be challenging, but expressHR’s integrated Vendor Management System (VMS) is designed to support recruiters and MSPs every step of the way. expressHR offers:

● Real-time management information and reporting, giving you full visibility into workforce data and spend.

● Full authorisation controls to prevent unauthorised hiring and spending, ensuring all processes are compliant.

● A compliance documents vault for secure storage and easy retrieval of essential records, supporting robust audit trails.

● Automated and consolidated self-billing, streamlining invoicing and payment processes to reduce manual errors and ensure accuracy.

● Transparent, scalable pricing starting from just 0.5% of annual spend, making compliance management cost-effective for agencies of all sizes.

With over 1,000 companies and 21 million hours managed each year, expressHR is trusted to help agencies and MSPs reduce compliance risks, control costs, and maintain high standards in a fast-changing regulatory environment. Book a demo with expressHR to see how your business can stay compliant and efficient in 2025 and beyond.