Further to our earlier news article, in which we highlighted that the Employment Rights Bill was finally approved by Parliament on 18 December 2025 and has now become the Employment Rights Act 2025, we previously explained some of the potential changes impacting employment law for employers.
We now expand on matters from our earlier article but must emphasise that, despite the Bill being approved, there are still many key areas of detail that are subject to consultation and further regulations before the Act can be implemented in full, which could take time. However, the Government is keen to adhere to timescales in line with its roadmap. To ensure employers have some understanding of the employment law changes to be introduced by the Act, we provide a further article on some of these changes and possible timescales.
1. Strike action – simplifying the process
The period for notice of industrial action will reduce from 14 days to 10 days (the Government originally proposed reducing it to seven days but later amended this to 10 days). This is expected to be in force by February 2026.
In addition, trade unions will receive increased protections in relation to statutory recognition and derecognition processes, likely to be brought into force in April 2026.
2. Collective redundancy consultation – increased penalty for breaches
Employers are liable to pay a protective award for breaches of consultation requirements in collective redundancy situations. This award will increase from a maximum of 90 days’ pay per employee to a maximum of 180 days’ pay. This is expected to be in force from April 2026.
3. Statutory Sick Pay (SSP) – payable from day one of sickness
SSP will be payable from day one of sickness at the lower of either the annually fixed flat weekly rate or 80% of weekly earnings. This is expected to come into force in April 2026.
The current flat rate of SSP is £118.75, which will increase from April 2026 to £123.25, or 80% of the employee’s normal weekly earnings, whichever is lower.
4. Fair Work Agency (FWA) created
A Fair Work Agency will be created, taking over existing state enforcement powers in areas such as national minimum wage and statutory sick pay enforcement.
The FWA will also have a new obligation to ensure holiday pay and overtime compliance, with a new responsibility on employers to keep accurate records to demonstrate compliance.
In addition, the FWA will oversee the Employment Tribunal penalty scheme and matters relating to labour exploitation and modern slavery abuse. This is expected to be in force from April 2026.
5. Right to join a trade union – duty to inform
Employers will be required to inform workers in writing of their right to join a trade union. The content, form and frequency of this notification are still to be confirmed. Consultation closed on 18 December 2025 and the Government response is awaited, but it is anticipated that this could be in force by October 2026.
6. Fire and rehire
It will be automatically unfair to dismiss an employee for the sole or principal reason that they refused to agree to a “restricted variation” of their employment contract. This covers key terms such as pay, holidays and hours.
Protection will not apply in certain financial survival situations, but the employer will still need to demonstrate that the dismissal was fair.
Similar rules will apply where an employer seeks to replace an employee who has refused to switch from employment to a non-employment model of working. Following consultation, these provisions are likely to be in place by October 2026.
7. Duty to prevent sexual harassment
The current duty to take reasonable steps to prevent sexual harassment of employees in the workplace will be “upgraded” to a duty to take all reasonable steps. This is likely to be implemented in October 2026.
8. Protection from third-party harassment
Employees will gain protection from third-party harassment in relation to all protected characteristics under the Equality Act 2010 (except marriage and civil partnership status and pregnancy/maternity, which are dealt with separately).
Employers will become legally responsible where a third party harasses a member of staff in the course of their employment. Employers will have a defence if they can show they took all reasonable steps to prevent the harassment.
However, it is notable that regulations clarifying what constitutes “all reasonable steps” are not expected until 2027, despite the legal change being anticipated for October 2026.
9. Unfair dismissal – shorter qualifying period and removal of the compensation cap
The Act will give employees protection from unfair dismissal after six months’ continuous service, rather than the current two years. From 1 July 2026, the qualifying period will begin to run.
As at present, service requirements will continue to be disapplied in most cases of automatic unfair dismissal, such as discrimination or whistleblowing-related dismissals.
Currently, unfair dismissal compensation is capped at the lower of a year’s gross pay or £118,223 (a figure which increases annually with inflation). Moving forward, this cap on compensation will be removed, likely from January 2027. This will be in addition to the basic award (calculated in the same way as statutory redundancy pay).
10. Protections for zero-hours and agency workers – guaranteed hours and shift notice
Many details of the new right to receive a Guaranteed Hours Offer (GHO) for zero-hours or low-hours workers remain to be confirmed, including eligibility thresholds and reference periods.
In relation to shift notifications, workers will be entitled to minimum notice of shifts, as well as notice of changes or cancellations, but what constitutes “short notice” is still to be confirmed.
Both changes are expected to be implemented following consultation in 2027.
11. Enhanced dismissal protections for pregnant women and new mothers
Existing protections for pregnant employees and new mothers will be further strengthened under the Act. Consultation is ongoing and is due to close on 15 January 2026, with implementation likely in 2027.
12. Bereavement leave – expanded rights
The existing right to parental bereavement leave will be extended to a wider category of relationships and to cases of pregnancy loss.
Bereavement leave relating to a child will be at least two weeks (as under the current entitlement). In other cases, leave will be at least one week.
Consultation on longer leave periods, eligibility, notice requirements and evidential matters closes on 26 January 2026, with anticipated implementation in 2027.
13. Flexible working – strengthening employee rights
The Act will require employers to justify any decision to refuse a flexible working request. This is currently under consultation, with implementation expected in 2027.
14. Paternity rights
Paternity leave and unpaid parental leave will become day one rights from April 2026.
However, statutory paternity pay will continue to require 26 weeks’ service, and statutory parental leave will remain unpaid.
15. Extending time to bring Employment Tribunal claims
At present, most claims (such as unfair dismissal) must be brought within three months of the claim arising. This will be extended to six months from October 2026.
This change will apply to all types of claims except breach of contract claims arising on or outstanding after termination of employment.
Other key changes
From April 2026, the weekly rate of the following payments will increase to £194.32 (currently £187.18):
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Statutory Maternity Pay
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Maternity Allowance
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Statutory Paternity Pay
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Statutory Adoption Pay
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Statutory Shared Parental Leave Pay
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Parental Bereavement Pay
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Statutory Neonatal Care Leave Pay
From 2027, businesses with 250 or more employees will need to create and publish an equality action plan, outlining steps taken on prescribed matters such as gender pay gap reporting and menopause support.
These measures are expected to be introduced on a voluntary basis from April 2026 before becoming mandatory in 2027.
If you require any further assistance, please do not hesitate to contact our HR/Legal advice line team on 01455 852 028.
