A New ERA, Part Two: Preparing for the Next Wave of UK Employment Law Reform

Six months on from our previous ERA update, many of the most significant reforms contained in the Employment Rights Act 2025 (“ERA”) reforms are still to come. From unfair dismissal reform and strengthened harassment duties to expanded trade union rights and enhanced workplace protections, we look at what employers and HR leaders should be doing now to prepare for the next phase of change.

It is not an exaggeration to say that the ERA represents the most fundamental change to the employment law landscape in a generation – so there is a lot to cover in this article!  For ease of reference, we’ve broken down some of the main upcoming reforms as follows:

• The importance of strong project management
• October 2026: longer Tribunal limits
• October 2026: harassment reforms
• October 2026: trade union reforms
• January 2027: unfair dismissal changes
• January 2027: new rules on “fire and rehire”
• Expected by end 2026: strengthened tipping obligations
• Expected 2027: “zero-hour contract” reform
• Expected 2027: restrictions on non-disclosure agreements (“NDAs”)
• Other reforms expected in 2027

For more detail on the implications of the reforms, and practical tips about approaching them, you may also like to watch or listen to the recent ERA-focussed season 2 of our podcast series, The Bellevue Brief, which features eight ten-minute episodes focussing on key aspects of the ERA Apple Podcasts or Spotify .

Where are we now?

When the ERA received Royal Assent in December 2025, employers were given a phased timetable for implementing some of the most significant changes to employment law in a generation. Since then, many organisations have focused on preparations for ERA changes which came into force in late 2025 and early 2026, including (but not limited to) statutory sick pay reform, new family leave rights and increased risks associated with collective redundancy exercises.

However, some of the most commercially significant changes are still ahead of us.

Over the next 18 months, employers will need to navigate strengthened obligations around workplace harassment, expanded trade union rights, longer Employment Tribunal limitation periods, major changes to unfair dismissal law, new restrictions on contractual change through dismissal and re-engagement, and a range of wider reforms affecting flexible working, family rights, workforce planning and employee relations.

And, although aspects of the legislation remain subject to ongoing consultation, there is already a considerable amount of preparatory work employers could be considering now.

The importance of strong project management

One of the key messages from our original ERA article remains as relevant today as it was in January. Successful implementation will require strong project management skills and practices. Episode 1 of our ERA podcast season covered this practical aspect, in a discussion between our Founder and Chief Operating Officer about how we at Bellevue Law are preparing for the impact of the ERA within our own business, and sharing practical tips for approaching the changes Season 2 (ERA 2025) Episode 1 : Rolling Out Change.

As we move into the next phase of ERA reforms, employers may wish to focus not only upon individual policy updates but equally on ensuring they have the systems, processes, governance structures and management capability required to operate under a different employment law framework.

Many of the reforms cut across multiple business functions also. Unfair dismissal reform, for example, has implications for recruitment, onboarding, probation management, performance management, budgeting and dispute resolution. Harassment reforms may require changes to training, investigations, reporting processes, customer-facing operations and workplace culture. Trade union reforms may affect employee relations strategy, internal communications and management capability. And those are just for starters!

If they have not already done so, employers should consider:

• appointing a lead person or team to coordinate ERA implementation;
• mapping implementation dates against business priorities;
• identifying areas of greatest legal, operational and financial risk;
• allocating sufficient budget and resource;
• ensuring senior leadership oversight; and
• maintaining a structured implementation plan that evolves as further guidance is issued.

Organisations that start planning early are likely to have more options available to them, with a more considered rationale behind those options, than others attempting to implement multiple reforms simultaneously as deadlines approach.

Communication, communication, communication

The legislative changes themselves are only part of the challenge.

As awareness of workplace rights increases, many employees are likely to become more familiar with the ERA reforms through media coverage, workplace discussion and professional networks. In some areas, such as trade union rights and unfair dismissal protection, the changes may be particularly visible to employees. None of which is a bad thing, but employers should think carefully about how they communicate any upcoming changes.

This may include:

• manager briefing sessions;
• employee FAQs;
• intranet resources;
• updates to induction materials;
• employee forum engagement; and/or
• targeted training programmes, as appropriate.

Line managers are often the first point of contact when employees raise concerns or ask questions. Ensuring managers understand both the legal changes under ERA, and the organisation’s approach to implementing them, may prove just as important as updating the underlying policies themselves.

What’s on the horizon?

October 2026

Longer Tribunal time limits

From 1 October 2026, the time limit for bringing most Employment Tribunal claims will increase from three months to six months.

At first glance, this may appear to be a relatively technical procedural reform. In practice, however, it could have far-reaching and meaningful consequences for employers.

One possible effect is that more claims will be brought, full stop. Employees will have significantly longer to seek legal advice, engage with ACAS Early Conciliation and decide whether to pursue litigation. Claims that may previously have fallen outside the limitation period may therefore now end up proceeding.

Employers may also find themselves living with uncertainty for longer. A dismissal, grievance outcome or workplace dispute that might previously have felt low risk after a few months could remain vulnerable to challenge for a more extended period. All of which reinforces the importance of record-keeping for employers also. The longer the period between an employment decision and a claim being issued, the greater the risk that managers may have moved on, memories faded and/or key evidence having become harder to locate.

There may be wider implications for the Tribunal system too. Employment Tribunals are already experiencing substantial backlogs in many parts of the country – with final hearings being listed in three or four years’ time in some places. Extending limitation periods will, therefore, almost certainly add additional pressure to a system that is already buckling under the existing strain.

Against such a context, the role of ACAS and alternative methods of dispute resolution may become increasingly important, with the realities of access to justice via the Employment Tribunal potentially making early resolution more attractive to employers and employees alike.  A potential advantage of the longer limitation period is that it will allow more time for negotiation before formal steps, such as the parties filing their Claim and Response, need to be taken.

Harassment reforms: a higher bar for employers

Among the most important reforms taking effect on 30 October 2026 are the strengthened duties relating to workplace harassment.  Overall, these changes mean that there is a significantly increased focus on what employers are doing to prevent harassment.

Sexual harassment

Employers will be required to take “all reasonable steps” to prevent sexual harassment, a change which represents a further shift in focus from responding to complaints towards preventing them, following the introduction by the Worker Protection Act 2023 of the “preventative duty” : Sexual harassment: supporting law firm employers to comply with the new preventative duty – Bellevue Law.  The Government will also have power to introduce regulations specifying evidence-based steps that employers must take in future (meaning that, somewhat confusingly, compliance expectations in this area may continue to evolve beyond 30 October 2026).

Harassment more broadly

At the same time, employers will also face new obligations in relation to harassment more widely – related to any “protected characteristic” (such as race, age, sex or disability) – by third parties.

These third-party harassment provisions are particularly noteworthy. Employers will need to think beyond interactions between colleagues and consider risks arising from customers, clients, suppliers, contractors, agency workers and other third parties, depending on the context in which they operate. Organisations operating in client-facing environments, hospitality settings, retail businesses and professional services firms may all need to review existing approaches and ensure they’re up to scratch.

Employers will benefit from conducting a granular harassment risk assessment, considering factors which are tailored to the workplace and particular context, but which may include the following:

• customer and client interaction;
• workplace social events;
• alcohol-related activities;
• remote, late night and/or lone working;
• power imbalances;
• overnight travel, including international travel; and
• previous complaints or patterns of behaviour.

Training also deserves careful consideration (both in terms of content and regularity). Depending on an employer’s circumstances, generic e-learning modules may not, on their own, be sufficient evidence that an employer has taken all reasonable steps. Employers should consider whether line managers are equipped to identify concerns, respond appropriately to complaints and intervene effectively where issues arise.

Documentation will be important too. Employers should be able to demonstrate the practical steps they have taken to assess risk, train staff, communicate expected standards of behaviour and review the effectiveness of preventative measures.

Employers may also need to think differently about relationships with third parties. This could include communicating behavioural expectations to customers and suppliers, incorporating anti-harassment provisions into contracts and, where employees regularly work on third-party premises, seeking reassurance about the preventative measures in place. Investigations may also become more complex, as third parties will not necessarily be willing (or obliged) to participate in internal processes.

Organisations should also recognise that these reforms (and others relating to sexual harassment, such as the restrictions on the use of non-disclosure agreements (NDA) may increase claimant awareness of and appetite for pursuing harassment-related claims. Demonstrating a proactive and well-evidenced approach to prevention is likely to be an important part of risk management going forward.

We discussed the implications of the ERA’s changes to the law on workplace sexual harassment, and the practical steps employers need to take to prepare for them, in episode 5 of our ERA podcast series Season 2 (ERA 2025) Episode 5 : Sexual Harassment.

Trade union reforms

The trade union reforms arriving in October 2026 include a new duty to inform workers of their right to join a trade union, expanded trade union access rights and enhanced protections relating to industrial action and union representation.

For some employers, these changes may have limited day-to-day impact. For others, particularly those with little experience of trade unions, they may prompt reflection on worker voice and employee relations strategy questions more broadly.

Questions employers may wish to consider include:

• Do employees feel listened to?
• Which voices are heard loudest?
• Are concerns addressed before they escalate?
• Are existing employee forums effective?
• Are engagement survey results translated into meaningful action?
• Do managers have the confidence and capability to deal with employee relations issues constructively?

Strong employee relations have always provided commercial benefits. In the context of the upcoming reforms, they may become increasingly important as employers seek to build engagement, trust and workforce buy-in.

We discussed the reforms, and what they mean, particularly for employers with limited experience of dealing with trade unions, in episode 8 of our ERA podcast series Season 2 (ERA 2025) Episode 8 : Trade Union Rights.

January 2027

Unfair dismissal changes: a huge shift in the employment legal landscape

The forthcoming reduction of the unfair dismissal qualifying period from two years to six months from 1 January 2027, together with the removal of the statutory cap on compensatory awards for successful unfair dismissal claims, represent some of the most seismic and commercially significant reforms introduced by the ERA.

Currently, compensation for unfair dismissal is capped at the lower of 52 weeks’ gross pay or £123,543. From January 2027, that cap is due to be removed entirely.

Although much of the attention given to unfair dismissal changes has focused on employees gaining statutory protections earlier in their employment, the removal of the compensation cap has the potential to reshape the litigation landscape in a way that some employers may not yet have fully appreciated.

Historically, the statutory cap has often acted as a natural constraint on unfair dismissal claims by senior leavers. For executives and other well-compensated employees, the potential value of an unfair dismissal claim will often be modest when compared with their full remuneration package (eg salary levels, bonus arrangements, long-term incentive plans, equity, pension benefits, etc). As a result, negotiated exits in such situations tend to be considered a pragmatic solution, for both employers and employees alike. That picture may well start to change from next January, however.

For employers with significant populations of senior professionals, executives or highly paid employees, the removal of the cap could materially alter the risk profile of dismissal decisions. In some cases, compensation disputes may involve substantially greater sums than employers have traditionally associated with unfair dismissal claims. Employers may need to reassess how they approach recruitment, performance management and exits at senior levels, as well as the potential financial exposure associated with disputes involving senior personnel. High salaries, bonus entitlements, pension benefits and other contractual rewards may cause unfair dismissal to sit alongside discrimination, whistleblowing and contractual claims as a key area of litigation risk for organisations to assess and mitigate.

The reforms may also result in more unfair dismissal claims being brought in general. Employees of all levels will gain the relevant protections much earlier in their employment, creating a longer period of exposure for employers to grapple with. An employee will acquire unfair dismissal protection after six months’ service and, from October 2026, most Tribunal claims will be subject to a six-month limitation period. Taken together, employers may find themselves carrying employment-related risk for significantly longer than they do today. Decisions affecting relatively short-service employees may remain vulnerable to challenge many months after they are taken, particularly in the context of existing Tribunal backlogs. This may create what some employers will regard as longer tail risks, in respect of unfair dismissal.

Under the current regime, businesses can often take comfort once an employee with less than two years’ service leaves the organisation (provided no complicating factors apply, eg whistleblowing or discrimination). Going forward, that comfort may take longer to arrive. Employers should assume that dismissal decisions could come under detailed scrutiny many months and even years after the event, in light of the scale of Tribunal backlogs.

For all of which reasons, employers with strong recruitment, probation and performance management practices may conclude that they are better placed to defend claims than they would previously have assumed. Rather than routinely seeking settlement in disputes involving shorter-service employees, then, some organisations may become more willing to rely on the strength of their processes, and defend claims where they believe they have acted fairly.

The practical implications of these changes are therefore wide-ranging. In readiness, employers should be reviewing:

• recruitment and selection processes;
• onboarding procedures;
• probation periods and extension provisions;
• structured probation reviews;
• performance management frameworks;
• manager capability / education; and
• documentation standards.

A key takeaway here is that unfair dismissal risk may increasingly be concentrated at both ends of the workforce: among shorter-service employees who will gain protection much sooner, and among highly paid employees where the removal of the compensation cap could significantly increase exposure. Employees recruited today may already be affected by these reforms when they come into force. Preparation therefore cannot wait until the end of the year – and those employers who invest now in stronger people management processes, will likely be better-placed to navigate the challenges ahead.

You can watch or listen to our team discussing these important changes in episode 2 of our ERA podcast series The Season 2 (ERA 2025) Episode 2 : Unfair Dismissal Reforms.

Fire and rehire: a new approach to contractual change

Also taking effect in January 2027 are the new rules relating to dismissal and reengagement, more commonly known as “fire and rehire”. Under the ERA reforms, dismissals where the principal reason is to force employees to accept new employment and agree to certain changes to their contractual terms will become automatically unfair, subject to limited exceptions. The intention is to significantly restrict the use of fire and rehire as a mechanism for imposing contractual change where agreement cannot be reached.

Whilst these reforms are often described as a ban on fire and rehire, their implications may be considerably broader than at first glance. Many employers have never engaged in large-scale fire and rehire exercises and may therefore assume the reforms have limited relevance to them. Yet the reforms impact employers’ abilities to unilaterally impose contractual changes more broadly (even where dismissal and reengagement are not contemplated). As a result, employers may need to place greater emphasis on consultation, engagement and obtaining genuine workforce buy-in when considering significant contractual changes of any kind.

Potential implications may extend to:

• harmonisation exercises following mergers and acquisitions;
• changes to working patterns and location requirements;
• amendments to bonus, commission or incentive arrangements;
• business transformation programmes;
• cost-saving initiatives; and/or
• wider workforce restructuring projects.

Historically, employers have often taken comfort from the fact that contractual change could ultimately be enforced if agreement could not be reached with their people. In future, organisations may need to devote more time and resource to consultation, communication and building consensus, in order to achieve organisational goals.

There may also be implications for project planning in relation to these exercises. Programmes involving contractual changes may take longer to implement, require more extensive engagement and carry greater employee relations risk than they have in the past. In some cases, businesses may conclude that projects which could once have been completed relatively quickly will require substantially longer lead-in periods.

Employers may therefore wish to review:

• contractual flexibility provisions;
• consultation procedures;
• employee engagement strategies;
• change-management frameworks;
• collective consultation expertise; and
• manager capability in leading organisational change.

In light of the above, the impact of the reforms may be felt less in relation to the relatively narrow concept of fire and rehire, but perhaps more in respect of a broader shift towards consultation, consensus-building and employee engagement, as building blocks for workplace change, which may otherwise be harder to achieve.

We explain the changes, and their practical impacts in episode 7 of our ERA podcast series The Bellevue Season 2 (ERA 2025) Episode 7 : Ban on fire and re-hire.

Looking ahead to 2027 and beyond

Whilst unfair dismissal and fire and rehire / contractual change reforms may currently be attracting most attention, they are only part of a much wider overhaul of employment rights under the ERA. A substantial programme of further change remains ahead. Although implementation dates for some measures are still being finalised, employers should continue monitoring developments in the following areas.

The common themes running through many of the forthcoming changes are greater protection for workers, increased transparency, stronger consultation obligations and a growing emphasis on prevention rather than reaction. Organisations that start considering the operational, financial and people implications of these initiatives now are likely to be in a stronger position than those waiting for implementation deadlines to approach.

Changes expected by the end of 2026 (without specific dates yet)

Strengthened tipping obligations

• Employers will be required to consult workers on their tipping policy and review that policy at least every three years.
• Hospitality, leisure and service-sector employers should consider whether current arrangements are sufficiently transparent and whether they can demonstrate a fair and consistent approach to the allocation of tips, gratuities and service charges.
• Businesses may also wish to think about how consultation will operate in practice and whether managers understand the new requirements.
• The Government recently withdrew its draft Tipping Code of Practice and has indicated that further detail will follow. Employers in affected sectors should therefore continue to monitor developments closely and be prepared for potential changes before implementation.

Reforms expected during 2027 (without specific dates yet)

Guaranteed hours and greater certainty of work

• New rights to guaranteed hours, reasonable notice of shifts and payments for cancelled or curtailed shifts are expected.
• Despite often being described as “zero-hours contract reforms”, the changes may ultimately extend more widely than many employers anticipate. The Government is consulting on protections for both zero-hours workers and certain low-hours workers, meaning the impact could extend well beyond traditionally casual workforces.
• Depending on where the final hours threshold is set, significant numbers of workers on part-time, seasonal or variable-hours arrangements could potentially fall within scope also.
• Employers with hospitality, retail, leisure, logistics, care-sector and/or other flexible staffing models may wish to begin assessing the extent to which staff working patterns differ from contractual hours and how workforce planning currently operates.
• The reforms have the potential to create significant administrative and operational challenges for such employers, particularly if organisations are required to undertake regular reviews of hours worked and make repeated guaranteed-hours offers to employees (whether they want those offers or not).
• Much is not yet known about the planned changes in these areas. Workforce planning, scheduling practices, labour cost forecasting and HR systems may all require review once the final framework becomes clear.

Restrictions on NDAs

• The ERA also contains new rules to limit the use of non-disclosure agreements (“NDAs”) – which are regularly used to impose confidentiality obligations in settlement agreements – in workplace harassment and discrimination cases. 
• While the reforms have been referred to as a “ban” on NDAs, in fact their impact may be more limited, depending on the nature of the “excepted agreements” relating to confidentiality obligations which the ERA will still permit.  A Government consultation on potential criteria for such agreements – for example if the worker requests an NDA and/or receives independent advice on it – has recently closed. For now, employers that have historically resolved discrimination and harassment complaints through confidential settlements may wish to reassess how they deal with these sorts of situations in future. They may wish to consider whether investigation processes, workplace culture initiatives and/or dispute-resolution strategies remain fit for purpose, in a world where confidentiality may be more difficult to achieve.
• The reforms may place greater emphasis on prevention, early intervention and robust investigation processes rather than relying on settlement agreements with confidentiality provisions to manage risk.

We discuss the impact of the proposed restrictions on the use of NDAs, together with other measures in the ERA relating to workplace sexual harassment in episode 5 of our ERA podcast series Season 2 (ERA 2025) Episode 5 : Sexual Harassment.

Enhanced protections for pregnant employees and new mothers

• Further restrictions on dismissals affecting pregnant employees and maternity returners are expected, although further detail is limited.
• Employers may wish to review how pregnancy, maternity leave and return-to-work situations are currently managed, particularly in the context of restructurings, performance concerns and organisational change.

You can hear our team discussing the practical implications of the ERA’s reforms relating to family-friendly rights in episode 3 of our ERA podcast series Season 2 (ERA 2025) Episode 3 : Family-Friendly Rights.

Mandatory gender equality and menopause action plans

• Employers with more than 250 employees will be required to publish action plans on gender equality and menopause support.
• For many organisations, this may go beyond simply publishing a statement. Employers may wish to review their existing gender pay gap reporting, identify any underlying causes of disparities and assess whether current initiatives are delivering measurable outcomes.
• Organisations may benefit from producing a voluntary action plan ahead of implementation, allowing them to identify gaps, test proposed measures and establish governance processes before the requirements become mandatory.
• Employers should also consider whether menopause is adequately addressed within existing wellbeing, absence management and workplace adjustment processes, and/or whether a standalone menopause policy would be beneficial.

Flexible working reforms

• Further changes to the flexible working framework are expected.
• As workforce expectations continue to evolve, employers may wish to consider whether existing approaches remain aligned with operational needs, recruitment objectives and employee retention strategies.

Bereavement leave, including pregnancy loss

• New statutory rights are expected in this area.
• Beyond policy updates, employers should consider whether managers are equipped to handle sensitive conversations and provide appropriate support during particularly difficult circumstances.

Collective redundancy consultation changes

• Reforms to consultation thresholds could have significant implications for future restructuring exercises.
• Employers contemplating organisational change programmes may wish to monitor developments closely and assess the potential impact on project timelines, consultation requirements and costs.

Regulation of umbrella companies

• Organisations that rely on contingent labour should keep labour supply arrangements under review.
• The reforms may increase scrutiny of workforce models and create additional compliance obligations for businesses using agency or outsourced labour.

Ethnicity and disability pay gap reporting

• The Government has also committed to introducing ethnicity and disability pay gap reporting for larger employers.
• While implementation dates are yet to be confirmed, organisations may wish to begin considering workforce data quality, reporting capability and how any future reporting obligations may sit alongside existing gender pay gap reporting requirements.
• Larger employers may benefit from identifying data gaps now, and considering how to address, rather than waiting until any formal reporting regime is introduced.

Further industrial relations reforms

• Electronic recognition and derecognition ballots, enhanced blacklisting protections and wider industrial relations reforms remain on the agenda in this area.
• Employers should continue monitoring developments and consider whether employee engagement and/or employee voice mechanisms remain effective in an evolving industrial relations landscape.

Common themes running through many of the above reforms include greater emphases on transparency, consultation, prevention and workforce engagement. Employers that begin considering the operational, financial and people implications of the changes, sooner rather than later, are likely to be better positioned than those waiting for implementation deadlines to approach.

How we can support you

The next phase of ERA implementation will require careful planning, effective communication and sustained commitment from employers and HR leaders.

We are here to help – below is a non-exhaustive list of the targeted ERA support that the Bellevue Law Workplace Law team can provide to your organisation, to help you get ready for what’s coming:

• ERA implementation audits and risk assessments;
• strategic planning and change management support;
• contract and policy reviews;
• harassment prevention frameworks;
• employee relations and trade union advice;
• manager and HR training; and
• support on complex dismissals, performance management and restructuring projects.

Many of the most significant ERA changes are still ahead – but they’ll be here before we know it. Now is therefore the time for employers to ensure they have the right people, processes and plans in place, to allow them to navigate the next wave of UK employment reform with confidence.  Please get in touch if you would like our support.