Employment Rights Act Update
The Employment Rights Act became law at the end of 2025 however, the implementation of the various sections is being phased in over time.
Already in place are changes to statutory sick pay, family leave, whistleblowing and fines for failure to properly follow large scale redundancy processes.
Coming in October 2026 are changes to harassment of employees by third parties.
This could prove to be challenging to some organisations with large numbers of employees with external customer or even supplier relationships. Compliance may require a substantial re-evaluation of induction procedures, abuse reporting and response processes to potential abuse claims.
How this component of the Act is implemented by employers will be interesting to observe and there could well be some early cases that will help determine how the Act is interpreted.
From October 2026 the time limit for bringing claims to the Employment Tribunal will increase from three to six months. In January 2027 the period within which unfair dismissal can be claimed drops from 2 years to six months. Furthermore, the cap on compensation is removed.
This be a particularly significant change for many employers. It will no doubt focus attention on new employee progress checking and objective setting.
January 2027 will also see changes to ‘Fire and Rehire’ when this practice will largely automatically be seen as constituting unfair dismissal.
In 2027 there will also be changes to zero hours contracts where rights to guaranteed working and shift cancellation pay rights come into force. Zero hours contracts will not disappear instead the new regulations will address situations where workers want regular hours but are never offered them. Anyone who works a regular pattern will gain the right to be offered a guaranteed hours contract.
The leisure and hospitality sectors have raised some concerns about how this will affect them given their need for periodic and seasonal workers.
Perhaps unsurprisingly business leaders in the SME sector have been critical of the Act.
As an example, Jane Gratton Deputy Director of the British Chambers of Commerce said:
“A number of the proposals are deeply worrying for employers. They will increase employment costs, complexity and risk for firms, particularly SMEs who will be disproportionately affected. We are likely to see unintended consequences that could limit people’s employment opportunities and the UK’s economic growth.”
Despite the criticism the Act is now in place
All employers need to review their existing policies and procedures and ensure that they comply with the new requirements.
The above is a short summary of an Act that has many components and also includes some significant changes in relation to Trades Unions agreements and potentially in relation to social care.
Talk to one of our Employment Solicitors today
Where employers are unclear of the requirements, they should seek professional help to avoid potential breaches of what is a very far-reaching piece of legislation.