January 2026
The Employment Rights Act 2025 (the ERA) received Royal Assent in December 2025, and its implementation over a two year period will transform UK employment law.
With the right support, preparing for the myriad of changes on the horizon does not need to be overwhelming for businesses and their HR leaders. Below we have set out some of the key information you need and practical steps you should be taking now as well as what should be on your horizon in the coming months.
- The importance of strong project management
- Unfair dismissal changes
- Changes in force already and coming into force from February 2026
- Changes coming into force from April 2026
- On the horizon: Changes from October 2026 and in 2027
- How we can support you
The Workplace Law team at Bellevue Law is here to help. Please reach out to any of our team for support Contact Us – Bellevue Law, whether conducting risk assessments and gap analyses, advising on strategic changes in response to the new legislation, updating contracts and policies to reflect it or training HR teams and line managers on best practice.
Where are we?
After months of ‘ping pong’ between the Houses of Commons and Lords, the ERA finally received Royal Assent on 18 December 2025. The government has confirmed that its provisions will be rolled out in phases over a two year period, with more detail on the various measures emerging in the form of consultation, guidance and delegated legislation in due course.
The importance of strong project management
To roll out changes of this magnitude smoothly, businesses of all sizes will need to devote adequate resource across the board, including C-Suite champions, HR leaders and line managers.
Well in advance of key changes, employers need to conduct a risk assessment and consider any operational, legal and financial impacts and HR practices which may need to be reconsidered. For example, the effective ban on non-disclosure agreements (NDAs) in relation to allegations of discrimination and harassment may mean that employers who have previously chosen to settle such claims under NDAs may need to plan to conduct more robust investigations of allegations. And the removal of the unfair dismissal cap is likely to impact employers who have relied on enhanced redundancy payments to mitigate risk during restructuring, who may need to consider allowing more time to conduct stronger, more legally defensible, processes.
Employers then need to audit contracts, policies and practices against the requirements of the ERA and consider what further training and support is needed to ensure successful rollout of changes, as well as monitoring critical ERA implementation dates. They should also strengthen HR systems and processes to ensure they capture and maintain accurate workforce status, keeping track of new hires’ qualifying periods, performance data and working hours.
It would be unwise to underestimate the work, resource and commitment required to remain compliant and minimise legal risk as the changes contained in the ERA come into force.
Unfair dismissal changes
Central to the reforms included in the ERA are two key changes to unfair dismissal law:
- The reduction of the qualifying period of employment required to bring a claim from two years to six months.
- The removal of the cap on compensation for unfair dismissal, which is currently set at the lower of 52 weeks’ gross pay and £118,223.
For some businesses, particularly those with many highly paid employees, these changes will increase the risk profile of their HR matters significantly, and this, and likely budget implications, should be considered at Board level.
These changes represent a compromise following the repeated rejection by the House of Lords of Labour’s manifesto commitment to make unfair dismissal a ‘Day One’ right. The removal of the compensation cap was the quid pro quo for the retention of a qualifying period, albeit much reduced from the current one. The last-minute nature of this provision meant that it was introduced without much debate about its implications, however.
The new six-month qualifying period is likely to come into force on 1 January 2027, meaning that any employees hired on or after 1 July 2026 – including those in the hiring funnel today – will have the right to bring an unfair dismissal claim from this date. It is anticipated that the removal of the compensation cap will be implemented on the same date. Automatically unfair dismissal, where a qualifying period does not apply, remains unaffected e.g. dismissal for a health and safety reason or for having ‘blown the whistle’.
This change makes robust recruitment and probation processes critical for employers. They should be reviewing recruitment processes now, ensuring that they have as much confidence as possible that they are hiring the right people for the role in the first place.
Then, once new employees are onboarded, probation periods should be used to ensure employees have the training and support they need to perform, with regular reviews to identify any issues and steps taken to address them. In some cases this may include terminating the employment of staff who are not performing, despite this training and support, within the first six months of employment.
Finally, employers are likely to want to ensure that any performance issues amongst current employees with under two years’ service are properly addressed now.
Contracts and policies should be reviewed and amended to ensure probation periods and processes protect the business in light of the new legislation.
Of course employers may still dismiss employees after the initial six months of employment, but must do so lawfully – for a legally permissible reason and after following a fair process – to minimise the risk of a claim. To ensure clarity and consistency about what a good process looks like, employers should consider refreshing training for both HR teams and the line managers who will be managing performance on the ground. It may be wise to cover not only legal requirements, internal processes and record-keeping, but also soft skills such as holding challenging conversations.
With the removal of the compensation cap, risk is greatest in respect of highly paid employees. From next year, managing performance and conduct issues relating to these employees will carry considerably more risk, and businesses with many such employees may need to consider new strategies for managing HR processes such as redundancies and performance management.
Changes in force already and coming into force from 18 February 2026
The first changes implemented under the ERA relate to industrial action and trade union activity.
When it received Royal Assent on 18 December 2025, the ERA repealed the Strikes (Minimum Service Levels) Act 2023, which governed ‘minimum service levels’ during strikes in six industrial sectors, with immediate effect.
And from 18 February 2026, the ERA will create new protection against dismissal for taking industrial action, broadly speaking removing the current 12-week limit for claiming unfair dismissal. It will also strengthen union and employee rights in relation to balloting, notice, supervision and mandates in respect of industrial action and change political fund rules.
Changes from 6 April 2026
A number of key reforms are expected to come into force on 6 April 2026, subject to commencement regulations.
To prepare for these changes, employers should review and update policies relating to the changes to family leave, sick pay, whistleblowing, redundancy consultation and union protocols described below and consider refreshing training for managers on harassment and union rules. Additionally, they should ensure those leading any restructuring projects understand the organisation’s consultation obligations. Finally, they should be reviewing and updating – in some cases overhauling – approaches to preventing and addressing workplace sexual harassment.
Collective redundancy protective award
These include the doubling of the maximum ‘protective award’ for failure to consult in collective redundancy cases, from 90 days’ pay to 180 days’ pay. The potential cost of non-compliance with collective redundancy obligations will therefore increase significantly.
Employers considering redundancies should ensure they understand and comply with their obligations, and that those managing the process are well trained. Employers considering restructuring projects in 2026 may wish to consider starting their processes swiftly in order to complete consultation requirements before the new rules apply. The government intends to publish guidance to help employers comply with their consultation obligations.
‘Day One’ paternity leave and unpaid parental leave
Employees are currently entitled to take paternity leave if they have been continuously employed for at least 26 weeks up to the end of any day in the ‘qualifying week’ (the 15th week before the baby is due) and for unpaid parental leave once they have been employed for over a year.
ERA reforms will make them eligible for both types of family leave from their first day of employment. There will also be the right to take paternity leave following shared parental leave.
Family leave policies should be updated to reflect the above, and managers informed of the changes.
Whistleblower protection for sexual harassment disclosures
The ERA amends existing legislation to provide expressly that workers who make disclosures that sexual harassment has occurred, is occurring or is likely to occur can benefit from whistleblowing protection against ‘detriment’ (adverse treatment) and unfair dismissal.
This change appears primarily to clarify and confirm the existing position, as such disclosures can already amount to ‘qualifying disclosures’ under whistleblowing legislation if they are disclosures of criminal offences, breach of legal obligations and/or danger to health and safety. And sexual harassment complainants already have protection from victimisation under the Equality Act 2010.
In practice, the change is likely to encourage some claimants bringing sexual harassment claims to consider running whistleblowing claims alongside such claims. It may also encourage more claimants to seek interim relief – such as reinstatement or financial relief pending the final hearing – which is available in unfair dismissal claims relating to whistleblowing, but not harassment and discrimination. And in settling such claims, NDAs may not be used to prevent further whistleblowing, although later changes included in the ERA will nullify their use in discrimination and harassment allegations anyway.
This change is one of a suite of changes relating to sexual harassment contained in the ERA, with others, including NDA reform, the imposition of a duty to take all reasonable steps to prevent sexual harassment and liability for third party harassment where all reasonable steps were not taken to prevent this, expected to come into force in October 2026.
Employers should be preparing for these changes by conducting granular sexual harassment risk assessments considering risks specific to their workplaces (such as alcohol, customers/clients, lone working and power imbalances) as well as previous complaints. They should then put in place risk mitigation strategies, which are likely to include updating policies and training and ensuring customers and other third parties are made aware that harassment will not be tolerated. Finally, complaints of sexual harassment should be investigated promptly and effectively, with appropriate action taken to address any wrongdoing.
Creation of Fair Work Agency
The ERA creates a new centralised employment enforcement body, the Fair Work Agency (FWA), bringing together the work of a number of existing bodies and with a remit to enforce certain employment related legislation, including holiday pay.
The FWA will have powers to require company representatives to provide documents and answer questions and the ability to impose financial penalties. It will also be able to bring Employment Tribunal proceedings in place of individual workers, as well as advising employers and workers alike on employment matters. It is not yet known, however, when the FWA will start enforcement action, how it will be resourced or how its powers may expand in time.
In the meantime, employers should ensure they are compliant with the law relating to sick pay, national minimum wage and holiday pay.
Sick pay reforms
From 6 April 2026, statutory sick pay (SSP) will be payable from the first day of ill health absence (instead of the fourth day) and the lower earnings limit restricting SSP to those earning over the threshold removed. These changes should be reflected in policies and payroll practices.
Gender pay gap and menopause action plans
Action plans around menopause and gender pay gaps will become mandatory for employers with over 250 employees during 2027, with the ability to upload plans to the government portal on a voluntary basis from April 2026. Employers should take steps to understand their current position and start developing quality action plans, perhaps including the introduction of a menopause policy (or informing employees of the support available) if not already in place.
Further trade union reforms
Additional changes will simplify the process for trade unions to gain recognition in a workplace and allow members to vote electronically.
On the horizon
Employers should be aware of further changes expected to come into force later this year and during 2027. We will provide more detail in later updates, but please feel free to contact any of the Bellevue Law Workplace team if you have specific queries in the meantime Contact Us – Bellevue Law.
Changes from 1 October 2026
- Fire-and-rehire: dismissals to impose certain contractual changes will become automatically unfair.
- Employment Tribunal time limits will be extended from three to six months for most claims (this follows the extension of the ACAS Early Conciliation period from six to twelve weeks in December 2025).
- Harassment: the strengthening of the existing duty to take reasonable steps to prevent sexual harassment and liability for third-party harassment.
- Tipping: requirement to consult on tipping policy and review the policy at least every three years.
- Trade union rights: expanded workplace access and protections.
Changes from 2027 onwards
- Six-month qualifying period for unfair dismissal and removal of compensation cap – (See Unfair Dismissal).
- Enhanced rights for pregnant workers and maternity returners.
- Introducing a power to specify steps that are to be regarded as “reasonable” to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
- Changes to the collective redundancy consultation threshold.
- Bereavement leave.
- Mandatory gender pay gap and menopause action plans for employers with over 250 employees.
- Further reforms on flexible working.
- Zero-hours contract changes.
- Regulation of umbrella companies.
- Strengthening protection against the blacklisting of trade union members and further changes to the industrial relations framework.
How we can support you
Employers have a substantial amount of work ahead of them to understand the wave of changes coming into force in the next two years. The Workplace Law team at Bellevue Law is here to support you:
- Advising on the implications of the ERA’s provisions.
- Assessing risks specific to your organisation and advising on mitigation strategies.
- Strategy sessions on key issues with business and People leaders.
- Reviewing and updating contracts and policies.
- Providing training and support for leaders, HR teams and line managers.
Now is the time to put in place an action plan to manage the transition smoothly and protect against risk. We are here to help.
