9th March 2026

Employment Rights Act – What you need to know

The Employment Rights Act 2025 is a significant reform of UK employment law with changes being phased between 2025 to 2027 onwards.

The Act is intended to strengthen worker protections, trade union rights, improve fairness at work and modernise employment practices.

The Government has proposed wide-ranging reforms to employment law through the forthcoming Employment Rights legislation. While not all provisions are yet enacted, employers should prepare for likely change. Here is a summary of the key changes and steps employers should be taking to prepare.

Please note, timelines are subject to consultation and parliamentary process with some measures requiring secondary legislation and employers should monitor updates:

TopicWhat are the changes?How to prepareExpected effective date
Trade UnionThe process for industrial action is easier – minimum notice for employers reduced, longer mandate period, reduced requirements for detailed information, protection from automatically unfair dismissal for taking part is extended
  • Update internal policies relating to industrial action
  • Review business continuity plans
  • Enhanced training and revised internal communications
February 2026
Family ProtectionsIncrease in statutory rights – Paternity and unpaid Parental Leave rights from day 1 of employment. No restriction on taking paternity leave after shared parental leave
  • Update contracts, employee handbooks and policies
  • Plan for potential increase in cost & absence
  • Train managers
April 2026
Statutory Sick PayExpansion of entitlement statutory sick pay – this will be payable from day 1 of sickness absence, and there will be no lower earnings limit
  • Update payroll processes
  • Update contracts, employee handbooks and policies
  • Train managers
Sexual HarassmentDisclosures of sexual harassment will be covered by whistleblowing law
  • Review and update policies and procedures
RedundancyMaximum award for failure to collectively consult increases to 180 days pay per affected employee
  • Strong planning and co-ordination of changes across sites
  • Review and update policies and procedures
  • Engage early about proposed changes
Fair Work AgencyThe new enforcement body FWA is established to significantly enhance the enforcement of workplace rights and bring in tougher penalties for non-compliance
  • Proactively audit pay and records for sickness / holiday pay
  • Update contracts
  • Train managers
Industrial ActionThe process for a trade union to gain statutory recognition in a workplace will be simplified
  • Update policies
  • Train managers
  • Improve / establish employee engagement channels
Trade UnionEmployers must inform workers of their right to join a union, and union right to access the workplace increases
  • Update policies
  • Train managers
  • Review employee relations approaches
October 2026
Sexual HarassmentEmployers required to demonstrate ‘all reasonable steps’ are taken to prevent sexual harassment by employees, customers, clients, and other third parties
  • Conduct regular risk assessments
  • Update policies
  • Provide regular, documented training
  • Establish clear reporting procedures
  • Keep clear records of all documentation
Dismissal & Re-engagementAutomatic unfair dismissal where an employee is dismissed and either rehired or replaced to change specific terms and conditions
  • Review and update contracts and policies
  • Train managers
  • Ensure robust and meaningful consultation processes
Two-Tier CodeNew employees must receive terms and conditions comparable to those of transferred staff under TUPE
  • Audit existing contracts
  • Assess potential financial impact
  • Update policies
  • Train managers
TribunalTime limit to raise an Employment Tribunal claim is extended to 6 months
  • Update policies
  • Train managers
  • Review employee relations approaches
Unfair DismissalEmployees will be able to raise an Employment Tribunal claim for unfair dismissal after 6 months employment, and the compensation will be uncapped
  • Review and tighten probation processes
  • Enhance performance management with early intervention
  • Train managers
January 2027
EqualityEmployers with 250+ employees required to publish mandatory gender equality action plans alongside gender pay gap reports
  • Review existing gender pay gap data to identify trends and root causes
  • Develop and update policies
April 2027
Family ProtectionEmployees eligible for 1 week unpaid bereavement leave from day 1 of employment including pregnancy loss. Protection rights during pregnancy and other types of family leave are extended
  • Update contracts, employee handbooks and policies
  • Train managers
2027
Flexible WorkingEmployers must explain in writing the grounds for rejecting a request
  • Update policies and procedures
  • Establish a clear and robust process for considering requests
  • Train managers
RedundancyTrigger for collective consultation changes to consider a certain number of redundancies across multiple establishments
  • Review and update policies and processes
  • Strong planning and co-ordination of changes across sites
Zero-hours contracts / Agency WorkersRights increase – guaranteed hours, rights to reasonable notice of shifts, compensation for cancelled shifts. Agency workers will receive the same protections
  • Audit current processes
  • Review scheduling and workforce planning processes and notifications
  • Review contracts
Umbrella CompaniesRegulations will apply to umbrella companies
  • Keep up to date with the change in regulations

 

Why should employers take action now?

Many of these changes are significant and will affect various policies, processes and approaches you take in your business as an employer.

It’s crucial to keep informed about these changes and begin taking steps to prepare for the new legislation.

Three Key Actions for Employers:

  1. Thoroughly review your employee handbook, policies and contracts – identify where updates are needed and a recommended timeframe for making those changes. In particular, relating to trade unions, family leave and pay, probation, sickness and sexual harassment
  2. Train managers – it’s important managers understand the changes ahead and prepare. There is likely to be ongoing news and press coverage which may lead to questions from employees which managers should prepare for
  3. Review your probation period process – strengthen the process to identify and manage performance issues swiftly and fairly

If you need support in reviewing your existing policies, contracts or processes or preparing training for your managers, get in touch with our experienced HR team at info@mcleanhr.co.uk

 

 

 

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