The UK Government has passed the Employment Rights Bill, which will mean big changes to UK employment law. The Bill has received Royal Assent and becomes the Employment Rights Act 2025. The reforms will be phased in gradually, and the main changes and expected timeline areas are set out below.

December 2025

​The repeal of the Strikes (Minimum Service Levels) Act 2023 takes immediate effect, making it easier for employees to take industrial action.

Early 2026

There will be consultations on potential changes to regulations, including:

• Guaranteed hours
• The banning of the practice known as ‘fire and rehire’ in which employees are dismissed but offered immediate re-employment on new terms and conditions
• The regulation of umbrella companies
• Review periods for zero-hour contracts and a consensus on the definition of ‘low hours’
• Non-disclosure agreements. It seems that any agreement which attempts to stop a worker from making allegations or disclosures about harassment or discrimination will become automatically void.
• Protection against detriments for taking industrial action and blacklisting
• Regulation of tips
• Collective redundancy consultations
• Flexible working.

February 2026

Most of the Trade Union Act 2016 (regarding strikes) will be repealed, simplifying industrial action and ballot notices.

April 2026

The protective award will be doubled. A Protective Award is compensation which an Employment Tribunal can order an employer to pay when the employer fails to follow legal requirements for collective redundancy consultation. It is currently up to 90 days’ pay, and it may rise to 180 days’ pay.

Paternity leave and parental leave will be available from day one, instead of after a qualifying period.

Statutory Sick Pay (SSP) reforms will take place, probably meaning that SSP is payable from day one of an absence, rather than after three waiting days.

A government body, the Fair Work Agency, will be set up to enforce key employment rights.

Trade Union recognition rules will change. Notably, the membership threshold for unions to secure statutory trade union recognition is likely to be reduced.

Electronic balloting will be introduced, with guidance about how to do this in practice.

Sexual harassment disclosures will count as whistleblowing.

October 2026

There will probably be a ban on fire and rehire.

Trade Unions’ access to workplace rights will increase, meaning  that unions will have the right to access workplaces physically, and to communicate with workers in person and digitally.

‘All reasonable steps’ must be taken to prevent sexual harassment, not just ‘reasonable steps’

Liability for third party harassment will increase.

Employment Tribunal time limits will increase.

There will be enhanced protections for union activity

Tipping laws will be made more precise. It looks likely that employers will have to consult with staff or unions before creating tipping policies, and review these policies every three years.

There will be a duty for employers to inform workers of their right to join a trade union.

2027

Employees will be able to bring an unfair dismissal at 6 months’ service (instead of the current 24 months).

There may be a removal of the cap on unfair dismissal compensation. Currently, compensation is either 52 weeks’ gross salary or a statutory cap (currently set at £118,223), whichever is lower.

More redundancy situations will require collective consultation, potentially involving more employee representatives.

Workers who regularly work more than the hours set out in their contracts will be entitled to guaranteed hours and shift scheduling.

There will be flexible working request changes. Flexible working is likely to become the default by requiring employers to reasonably explain refusals for day-one requests, expanding employee consultation, and increasing the frequency of flexible working requests allowed.

There will be mandatory gender pay gap and menopause action plans.

There will be enhanced protection for those who return to work after maternity leave.

There will be reforms to blacklisting and industrial relations framework

There will be more regulation of umbrella companies relating to liability for tax and preventing tax avoidance.

All employees will get least one week off unpaid for the death of a relative or dependant, available from their first day of work.

Employers must do more in order to prevent sexual harassment.

 

2027-2028

There will be reforms relating to gender pay gap outsourcing measures.

 

*Previously, the Government has announced the following increases to the national minimum wage rates, to take effect on 1 April 2026:

• 21 and over – from £12.21 to £12.71ph
• 18-20 – from £10 to £10.85ph

• 16-17 and apprentices – from £7.55 to £8ph

 

And the Government has proposed the following increases from April 2026:

Statutory Sick Pay (SSP)

• Increases from £118.75 to £123.25 per week

Statutory Maternity Pay (SMP) and Other Family-Related Pay

• SMP, statutory paternity pay, statutory adoption pay, shared parental pay, neonatal care pay and parental bereavement pay increase from £187.18 to £194.32 per week.

Lower Earnings Limit (LEL)

• The weekly earnings threshold for qualifying for many statutory payments (including SMP/SSP) rises from £125 to £129 per week

 

If you have queries, do not hesitate to contact one of our HR advisors by emailing  hr@perspectivehr.co.uk or ringing 01392 247436