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Employment Rights Act

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The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and represents the most significant reform of UK employment law in a generation.

The Act introduces sweeping changes across employment rights, trade union powers, enforcement mechanisms, and sectoral bargaining frameworks. 

Areas of interest

We have summarised the different parts of the Act under each of the tabs below. Please click on them to see a summary of what the Act says in relation to different areas, what still needs to be done by way of consultation or secondary legislation and the likely timescales for implementation. You can also subscribe to receive regular updates.

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Precarious workers

Flexible working

Statutory Sick Pay

Family friendly 

Equality & harassment 

Fire and re-hire

Unfair dismissal

Collective redundancy

Sectoral bargaining

Trade unions

Fair Work Agency

Miscellaneous

Precarious workers: Zero hours/Shift workers

Who is affected?

Zero-hours workers, low-hours workers, agency workers, employers, hirers, and work-finding agencies across all sectors (subject to specified exclusions).

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, these provisions are expected to take effect in 2027.  The sheer complexity and volume of required secondary legislation suggests that these provisions will take some time before they are fully in force.

The Employment Rights Act 2025 introduces comprehensive protections for workers on zero-hours contracts, low-hours contracts, and agency workers through four main rights. The Act also contains provisions on collective agreement contracting-out which allow independent trade unions to negotiate alternative arrangements that exclude these rights if replacement terms are incorporated into contracts. The extent to which unions will agree, however, remains to be seen.

1. Right to guaranteed hours

Employers must make a guaranteed hours offer to qualifying workers after every reference period. A worker qualifies if they worked during a reference period under a zero-hours contract or "low-hours" arrangement, worked a specified number of hours meeting conditions on regularity, and were not an excluded worker or agency worker.  The reference period, and the number of hours which will constitute a low-hours arrangement, are yet to be announced.

The guaranteed hours offer must propose to vary the worker's contract or offer a new contract requiring the employer to provide work for hours that reflect those actually worked during the reference period. Offers must be made by a specified deadline, in a specified form, and accompanied by specified information.

Workers may accept or reject offers; acceptance creates binding contract variations or new contracts. Failure to respond is treated as rejection.

2. Right to reasonable notice of shifts

Employers must give reasonable notice of shifts to workers on zero-hours contracts or specified low-hours contracts. Notice is presumed unreasonable if given less than a specified time before the shift starts.

Employers must also give reasonable notice of shift cancellations or changes (to start/end times or reductions in hours).

3. Right to payment for cancelled, moved, or curtailed shifts

Employers must pay a specified amount when they cancel, move, or curtail a qualifying shift at short notice. Qualifying shifts are those worked under zero-hours contracts, zero-hours arrangements, or specified low-hours contracts.

"Short notice" means notice given less than a specified time before the shift would have started (for cancellations) or before the earlier of the original/changed start time (for movements/curtailments).

4. Agency workers' rights

The above rights have been extended to agency workers as an anti-avoidance measure. Hirers (rather than the recruitment business) must make guaranteed hours offers to qualifying agency workers after reference periods where they worked specified hours. The offers must propose a contract that reflects the hours actually worked by the individual in question.

Agency workers have rights to reasonable notice of shifts and shift changes. Work-finding agencies must pay agency workers for shifts cancelled, moved, or curtailed at short notice.

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What should employers be doing to prepare for it?

Employers should consider taking the following action:

  • Identify all workers on zero-hours contracts, low-hours contracts (requiring work for limited hours), and agency arrangements
  • Implement systems to monitor hours worked by qualifying workers during reference periods, including regularity patterns
  • Develop compliant guaranteed hours offer templates that reflect hours worked and (potentially) working patterns
  • Configure systems to calculate and process payments for cancelled, moved, or curtailed shifts at short notice
  • Establish processes to provide reasonable advance notice of shifts, cancellations, and changes; determine what constitutes "reasonable" notice in your context
  • Maintain detailed records of shift offers, acceptances, rejections, cancellations, and all notices given to workers
  • Prepare materials explaining guaranteed hours rights and ensure workers receive specified information within initial information periods (two weeks)
  • Develop processes for making, accepting, and implementing guaranteed hours offers, including handling rejections
  • Train managers on new obligations, particularly around shift scheduling, notice requirements, and guaranteed hours calculations
  • If using agency workers, clarify responsibilities with work-finding agencies regarding guaranteed hours offers, shift notices, and payments
  • If applicable, consider whether collective agreements could provide alternative arrangements
  • Assess whether current zero-hours/low-hours arrangements remain appropriate given new obligations
  • Calculate potential costs of guaranteed hours offers and shift cancellation payments
  • Review shift-scheduling practices to minimise short-notice changes and associated payment obligations

What still needs to be decided?

Extensive secondary legislation is required before these provisions become operational:

Reference periods
  • When the initial reference period ends
  • When subsequent reference periods begin and end
Qualifying conditions
  • Conditions regarding number, regularity, or other aspects of hours worked to qualify
  • Which workers are "excluded workers"
Guaranteed hours offer requirements
  • Whether offers must specify days/times or working patterns reflecting when hours were worked
  • How to determine whether offers reflect hours worked and when they were worked
  • Specified descriptions of temporary needs justifying limited-term contracts
  • Deadline, form, manner, and accompanying information for offers
Reasonable notice standards
  • Minimum notice period before shifts (presumed unreasonable if less)
  • Minimum notice periods for cancellations and changes
  • Specified matters tribunals must consider when determining reasonableness
Shift payment provisions
  • Amount payable for cancelled, moved, or curtailed shifts
  • Day by which payment must be made
  • Time thresholds defining "short notice"
  • Time threshold defining "movement" of shifts
  • Circumstances exempting employers from payment obligations
Compensation limits
  • Maximum compensation for complaints in relation to this part of the Act
Collective agreement provisions
  • Further provisions about collective agreement contracting-out, including effects of incorporation and withdrawal notices

 

Additional provisions

Collective agreements with independent trade unions may exclude these rights if they expressly replace them with alternative terms incorporated into contracts.

The Workers (Predictable Terms and Conditions) Act 2023 is repealed.

Exclusivity terms in zero-hours arrangements (both contractual and non-contractual) are unenforceable.

Areas of uncertainty

It is still not clear as to how these rights will interact with existing contractual arrangements.  Further, the above points that still need further clarification are likely to lead to a lot of uncertainty in the meantime.  We do not yet know how the "regularity" of hours will be assessed in practice, what constitutes "reasonable" notice in different industries and contexts, and how to calculate hours "reflecting" those worked during reference periods.  It is going to become particularly complicated when trying to apply the new provisions to workers with multiple contracts or complex working patterns – in other words, the typical gig economy worker.

Flexible working 

Who is affected?

This provision applies to all employees with the statutory right to request flexible working (currently available from day one of employment). It affects employers across all sectors and sizes, though the practical impact may vary depending on workforce composition and operational flexibility.  The provisions do not apply where the request may have national security implications.

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, flexible working provisions are expected to take effect in 2027.

The Employment Rights Act 2025 amends the existing provisions relating to the right to request flexible working. The key changes strengthen employee rights and impose new obligations on employers when handling flexible working requests.

Employers may now only refuse a flexible working application not only if they consider that the application should be refused on one of the specified statutory grounds (the current position) but also that it is reasonable to refuse on that ground or those grounds. This introduces a dual test requiring both the existence of a valid ground and the reasonableness of relying on it – essentially, introducing the concept of proportionality into the process in a way that was previously absent.

The grounds on which an employer may refuse a request are: the burden of additional costs; detrimental effect on ability to meet customer demand; inability to reorganise work amongst existing staff; inability to recruit additional staff; detrimental impact on quality; detrimental impact on performance; insufficiency of work during the periods the employee proposes to work; planned structural changes; and any other grounds specified by the Secretary of State in regulations.

When refusing a flexible working application, employers must provide written notification that states the specific ground or grounds for refusal and explains why the employer considers it is reasonable to refuse on that basis. This goes beyond simply citing a statutory ground and requires a tailored justification.

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What should employers be doing to prepare for it?

Employers should consider taking the following steps in preparation for the new provisions:

  • Ensure you have a policy in place at the time the changes are put into force that reflects the new dual test (valid ground + reasonableness) and the enhanced explanation requirements when refusing requests. Remove any outdated references to previous legislative requirements.
  • Equip decision-makers with guidance on applying the reasonableness test and documenting their reasoning. Managers should understand that merely identifying a statutory ground is insufficient; they must also demonstrate why refusal is reasonable in the specific circumstances.
  • Create templates or checklists to help managers assess flexible working requests consistently, consider alternatives, and record their analysis of both the applicable ground and the reasonableness of refusal.
  • Maintain detailed records of all flexible working requests, the consultation process, the reasons for decisions, and any alternatives considered. This documentation will be essential if decisions are challenged.
  • Design templates that require managers to articulate not just which statutory ground applies, but also a substantive explanation of why refusal is reasonable given the employee's specific request and circumstances.  Ensure that managers understand that, while a template may be available, each case should be judged on its merits.
  • Audit current flexible working arrangements to identify precedents and ensure consistency in decision-making across the organisation.
  • Consider offering flexible working options more widely to reduce the volume of formal applications and demonstrate good faith engagement with employee needs.  This approach may avoid contractual variations, if introduced carefully, and give employers more flexibility when assessing the future needs of the business.

What still needs to be decided?

The Secretary of State has the power to specify additional grounds for refusing flexible working requests through regulations.  At present, it appears unlikely that the existing list will be extended enormously, if at all.

The Secretary of State may also specify in regulations additional steps that employers must take when dealing with flexible working applications. The content and scope of these procedural requirements remain to be determined.

Statutory Sick Pay

Who is affected?

These changes affect:

  • All employers in Great Britain and Northern Ireland who employ staff
  • All employees, particularly:
    • Those in lower-paid roles who previously fell below the earnings threshold
    • Part-time workers and those with variable hours
    • Employees who take short periods of sick leave (one to three days)

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, the reforms to Statutory Sick Pay (removing the Lower Earnings Limit and waiting period) are expected to take effect in April 2026. However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

Until commencement regulations are published, the existing SSP rules remain in force. Employers should:

  • Monitor government announcements and HMRC guidance for confirmed implementation dates
  • Prepare systems and processes in advance to ensure readiness
  • Consider whether any transitional arrangements will apply to absences in progress when changes take effect

The Employment Rights Act 2025 reforms Statutory Sick Pay (SSP) through four key provisions covering both Great Britain and Northern Ireland.

Removal of the waiting period

The Act removes the existing three-day waiting period for SSP. Employees will now be entitled to SSP from the first day of sickness absence, rather than following a number of qualifying days.

Changes to the lower earnings limit and payment rates

The Act fundamentally changes how SSP is calculated and who qualifies. The lower earnings limit requirement for SSP eligibility is removed entirely, meaning employees who previously earned below the threshold will now be entitled to SSP.

The weekly rate of SSP becomes the lower of the standard rate of SSP (currently £118.75) or 80% of the employee's normal weekly earnings. This represents a shift to an earnings-linked payment structure for lower earners.

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What should employers be doing to prepare for it?

Employers should consider taking the following steps:

  • Review and update payroll systems to calculate SSP from day one of absence, removing any three-day waiting period logic
  • Configure systems to calculate SSP for low earners at 80% of normal weekly earnings (currently capped at £118.75) rather than applying a flat rate in all cases
  • Revise sickness absence policies to reflect day-one SSP entitlement
  • Review notification requirements and update internal guidance on what employees must report and when
  • Brief payroll teams, HR staff, and line managers on the changes
  • Update absence recording forms and systems

What still needs to be decided?

Little needs to be done before these provisions come into effect, but we anticipate that guidance may be forthcoming from HMRC and the Department for Work and Pensions in relation to how to calculate "normal weekly earnings" for the 80% calculation, particularly for employees with variable or irregular earnings patterns.  We may also see some guidance on transitional arrangements and how to handle absence periods that straddle the commencement date.

Family-friendly leave

Who is affected?

All employers and employees across all sectors benefit from these provisions. The changes particularly affect:

  • Employees planning to start families or who have caring responsibilities
  • Employees who experience pregnancy loss or bereavement

When do the changes come into effect?

Some provisions (particularly the expanded bereavement leave and dismissal protections during pregnancy) cannot take practical effect until the necessary regulations are made and brought into force.  However, we think that straightforward amendments (removal of qualifying periods for parental and paternity leave, flexibility to take paternity leave after shared parental leave) may be implemented more quickly. According to the Government's July 2025 Implementation Roadmap, day one paternity leave and unpaid parental leave are expected to take effect in April 2026. Rights for pregnant workers and bereavement leave are expected to take effect in 2027. However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

Until commencement, existing law continues to apply, meaning qualifying periods remain in place and parental bereavement leave operates under the current narrower framework.

 

The Employment Rights Act 2025 introduces significant improvements to family-friendly employment rights, removing barriers to leave and extending bereavement protections. The key changes include:

Immediate entitlement to parental leave

The Act removes the qualifying period of employment previously required for parental leave (the four-week period of unpaid leave available to parents annually, up to a maximum of 18 weeks per child), meaning employees can access this right from day one of employment.

Immediate entitlement to paternity leave

The qualifying period for paternity leave (both following birth and adoption) is removed, allowing employees to take paternity leave from the start of their employment.

Flexibility to take paternity leave after shared parental leave

Employees are no longer prevented from taking paternity leave if they have already taken shared parental leave, providing greater flexibility for new parents to structure their leave.

​​​​​​

Expanded bereavement leave

The Act significantly expands "parental bereavement leave" into broader "bereavement leave". This extends eligibility beyond bereaved parents to "bereaved persons" who satisfy specified conditions (to be set out in regulations) as to their relationship with a person who has died. Critically, the leave now also covers employees who have suffered pregnancy loss of a specified kind, or who have a specified relationship with someone who has suffered pregnancy loss or with a child who had been expected to be born. Pregnancy loss is defined as: (a) the ending of a pregnancy after less than 24 weeks in any way other than by a live birth, or (b) the failure of an embryo to become implanted following IVF treatment. Employees are entitled to at least one week's leave for bereavements other than the death of a child. The definition of 'child' now explicitly includes stillbirths after 24 weeks of pregnancy.

Enhanced protection against dismissal during pregnancy

The Secretary of State is given power to make regulations about dismissal (other than by reason of redundancy) during or after a protected period of pregnancy / maternity.  These regulations may cover notices to be given, evidence to be produced, procedures to be followed, consequences of failures, interaction with contractual rights, and modifications to the calculation of a week's pay. This extends pregnancy protections significantly beyond the existing redundancy-specific provisions.  Given the removal of the cap on unfair dismissal compensation, employers should be careful to follow whatever rules are put in place by the Government in this regard.

The Secretary of State has also been given the power to make regulations about dismissal in the period after adoption leave, neonatal care leave and shared parental leave (not just during the leave period).

 

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What should employers be doing to prepare for it?

Employers should consider taking the following steps to ensure compliance with these family-friendly provisions:

  • Revise parental leave and paternity leave policies to reflect the changes
  • Update employee handbooks with plain-language explanations of the new bereavement leave provisions, including pregnancy loss
  • Provide training to HR and management teams on the removal of qualifying periods for parental and paternity leave to ensure consistent application
  • Educate managers on the sensitive handling of bereavement leave requests, particularly regarding pregnancy loss
  • Train decision-makers on enhanced dismissal protections during and after family leave periods to avoid unfair dismissal claims
  • Monitor forthcoming regulations that will specify the detailed conditions for expanded bereavement leave and dismissal protections during pregnancy

What still needs to be decided?

Several aspects of this part of the Act require secondary legislation or further regulatory clarification.

The conditions relating to the relationship with a deceased person that will qualify an employee as a "bereaved person" must be specified in regulations. Regulations must also specify what kinds of pregnancy loss are covered and the conditions relating to relationships with persons who have suffered pregnancy loss.

Regulations must be made under the existing framework to specify the precise entitlement (minimum one week's leave) where leave relates to circumstances other than the death of a child.

The Secretary of State has power to make regulations about dismissal (other than redundancy) during or after a protected period of pregnancy, but these regulations have not yet been made. These regulations may cover notices, evidence, procedures, consequences of non-compliance, interaction with contractual rights, calculation of a week's pay, and modification of existing enactments.

Whilst the Act amends existing sections to extend protections to periods after family leave, the detailed operation of these protections will depend on regulations made under the existing framework.

Harassment and equality

Who is affected?

All employers (for harassment protections and confidentiality clause restrictions); employers with 250+ employees (for equality action plans); employees, workers, and contract workers (as beneficiaries of protections).

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, the requirement on employers to take "all reasonable steps" to prevent sexual harassment of their employees, and introducing an obligation on employers not to permit the harassment of their employees by third parties, are expected to take effect in October 2026.  However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision. The provisions relating to third-party harassment are likely to require some guidance from the EHRC.  When this guidance will be forthcoming is unclear.  Parliament allowed employers 12 months to prepare for the duty to prevent sexual harassment; it is hoped that at least this much will be given in relation to preparing for the introduction of third party harassment, given the complexity involved in preventing this.

Gender pay gap and menopause action plans are expected to be introduced on a voluntary basis in April 2026, with mandatory requirements taking effect in 2027.

The Employment Rights Act 2025 strengthens protections against harassment and discrimination in the workplace and introduces new employer obligations to promote gender equality.

Protection from harassment
  • Employers must take "all" reasonable steps to prevent sexual harassment of employees, strengthening the existing duty under the Equality Act 2010.
  • Employers must not permit third parties (such as customers, clients, or suppliers) to harass employees, and will be liable if they fail to take all reasonable steps to prevent such harassment.
  • The Secretary of State gains power to specify in regulations what steps are considered "reasonable" for preventing sexual harassment, which may include carrying out assessments, publishing policies, establishing reporting mechanisms, and handling complaints procedures.
Whistleblowing protections
  • Disclosures about sexual harassment (whether past, present, or likely future incidents) now qualify for whistleblower protection.  At first glance, this may seem unnecessary, given that workers are already protected from victimisation, but it does allow for those making protected disclosures to apply for interim relief if they are dismissed because they blew the whistle.  If successful, this would mean that they are entitled to continue to be paid throughout the period leading to the tribunal hearing. 
Confidentiality clauses
  • Contractual provisions (such as non-disclosure agreements) are void if they prevent workers from making allegations of, or disclosing information about, harassment or discrimination, or about an employer's response to such matters.
  • This applies to harassment or discrimination by an employer or another worker, and where the victim is the worker themselves or another worker of the same employer.
  • The Secretary of State may specify exceptions to this rule by regulations, and may also provide that even "excepted agreements" cannot prevent disclosures to specified persons, for specified purposes, or in specified circumstances.
Gender equality duties
  • Regulations may require employers with 250 or more employees (and certain public authorities) to develop and publish equality action plans showing the steps they are taking on gender equality matters, and to publish prescribed information relating to the plan. 
  • Gender equality matters include addressing the gender pay gap and supporting employees going through the menopause.
  • Regulations may require employers who are the 'principal' in relation to contract workers to disclose the identity of agencies or intermediaries supplying contract workers when publishing gender pay gap information or meeting public sector equality duties.

 

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What should employers be doing to prepare for it?

Employers should:

  • Ensure policies reflect the enhanced duty to take "all" reasonable steps to prevent sexual harassment, not just "reasonable" steps. Consider what additional preventative measures may be needed. 
  • Put in place systems to track harassment complaints, outcomes, and preventative measures taken to demonstrate compliance with the duty to take "all" reasonable steps.
  • Establish clear procedures for preventing, identifying, and responding to harassment by customers, clients, suppliers, or other third parties. Train customer-facing staff on how to report and escalate incidents.
  • Review all employment contracts, settlement agreements, and non-disclosure agreements to identify and remove clauses that prevent workers from disclosing harassment or discrimination. Update template agreements accordingly.
  • Ensure internal whistleblowing procedures explicitly cover sexual harassment disclosures and that staff understand these protections.
  • Deliver or update mandatory training for all staff on harassment prevention, bystander intervention, and reporting mechanisms. Ensure managers are trained on handling complaints effectively.
  • Ensure accessible, confidential mechanisms are in place for reporting harassment, including third-party harassment, and that investigation procedures are robust and trauma-informed.

For employers with 250 or more employees:

  • Begin assessing your gender equality position across pay gaps, representation, progression, and menopause support. Consider what steps you are currently taking and what gaps exist.
  • Consult with employee representatives, equality networks, and senior leadership about gender equality priorities and potential action plan content.
  • Ensure you have systems to track and analyse gender pay gap information and related metrics that may inform action plan requirements.
  • Prepare to disclose agency and contract worker arrangements if regulations require transparency about outsourced workers in equality reporting.

What still needs to be decided?

Several key provisions depend on secondary legislation that has not yet been published:

  • the specific steps that will be regarded as "reasonable" for preventing sexual harassment, including requirements for assessments, policies, reporting mechanisms, and complaints handling
  • the matters employers must have regard to when taking those steps
  • the conditions an agreement must satisfy to be treated as an "excepted agreement" exempt from the prohibition on confidentiality clauses
  • whether excepted agreements will still be void for disclosures to specified persons, for specified purposes, or in specified circumstances
  • whether the prohibition will be extended to individuals who are not technically "workers" but who work or receive training in specified circumstances
  • the full scope of requirements for equality action plans, including what steps must be shown and what information must be published
  • the detailed requirements for plan content, format, publication timing and frequency, revision cycles, and senior approval processes
  • how failures to comply with equality action plan requirements will be enforced
  • whether and how employers must disclose the identity of agencies or intermediaries supplying contract workers in gender pay gap and public sector equality reporting
  • regulations on equality action plans for public authorities require consultation with the Equality and Human Rights Commission and the Welsh Ministers (for Welsh public authorities), so timing will depend on these consultation processes.

All regulations for sexual harassment prevention, confidentiality clauses, and equality action plans are subject to the affirmative procedure, meaning they require Parliamentary approval, which may affect implementation timelines.

Fire and re-hire

Who is affected?

  • All employees employed for the purposes of a business
  • Employees who have not yet started work are excluded from protection
  • Private sector employers, public sector employers, and local authorities (with specific provisions for each category)

For public sector employers and local authorities, employment tribunals must apply judicial review principles when assessing whether the employer could reasonably have avoided the need for changes.

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, fire and rehire provisions are expected to take effect in October 2026. While the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), little needs to be done for this part of the Act to be implemented. these dates may be subject to revision.

The Employment Rights Act 2025 introduces protections against "fire and rehire" practices. It creates a new category of automatically unfair dismissal.

An employee will be regarded as automatically unfairly dismissed (irrespective of their length of service) if they are employed for the purposes of a business and the principal reason for dismissal is related to a "restricted variation" of their contract, unless the employer can show that an exemption applies.  This appears to apply even in circumstances where the employee has a term in their contract allowing the employer to make unilateral changes to the contract, but this point may need to be tested in the Tribunals.

Restricted variations include: reductions in pay or removal of pay entitlements; changes to performance-related pay measures; variations to pension terms; changes to working hours; certain shift timing or duration changes; reductions in time off entitlements; other variations specified in future regulations; and contractual terms allowing employers to impose these changes unilaterally.

Where dismissal relates to contract variations that are not "restricted variations", the dismissal is not automatically unfair, but specific factors must be considered in determining fairness including the reason for the variation, the consultation process that preceded the change, the extent to which unions were involved in the negotiations and what was offered to the employee in return for agreeing to the variation.

Employees will be regarded as automatically unfairly dismissed if the principal reason for dismissal is to enable the employer to replace them with an individual who is not an employee (such as contractors, consultants, or agency workers). This applies where the non-employee carries out substantially the same activities and the dismissal is not mainly due to reduced business requirements. Although it is not made expressly clear in the legislation, it is unlikely that this will apply to an employee who is fairly dismissed during a TUPE exercise.

For non-local authority employers, the protections do not apply if the employer can show that the variation or replacement was necessary to eliminate, prevent, or significantly reduce financial difficulties affecting their ability to carry on business as a going concern (or for public sector employers, the financial sustainability of carrying out statutory functions), and that they could not reasonably have avoided the need for the change.

Local authorities have a separate exemption where a relevant intervention direction is in effect relating to financial difficulties.

analysis of print document

What should employers be doing to prepare for it?

Employers should consider taking the following steps to ensure compliance:

  • Audit any planned contract variations to identify which would fall within the new "restricted variations" categories
  • Review policies on workforce restructuring, outsourcing, and use of contractors versus employees
  • Approach the use of variation clauses in contracts with caution
  • Where financial difficulties might justify changes, ensure robust consultation processes are in place with affected employees and recognised trade unions (or other employee representatives where applicable)
  • For non-restricted variations, document the reason for variation and conduct meaningful consultation, as these will be key factors in determining fairness
  • Document anything offered to employees in return for agreeing to variations, as this will be considered by tribunals
  • If considering changes that might rely on the financial difficulties exemption, begin documenting evidence of financial challenges and their impact on business viability
  • Prepare evidence showing reasonable alternatives were explored
  • For public sector employers, ensure decision-making can withstand judicial review scrutiny
  • Brief senior management, line managers, and HR professionals on the new protections
  • Provide guidance on identifying "restricted variations" and the risks of fire and rehire
  • Accelerate any plans to replace employees with contractors, consultants, or agency workers, as this otherwise may trigger automatic unfair dismissal claims unless financial difficulties exemptions apply when the provisions come into force
  • Ensure business cases for workforce changes can demonstrate genuine redundancy situations rather than mere substitution

What still needs to be decided?

Several provisions depend on secondary legislation that has not yet been made:

  • The specific conditions under which variations to shift timing or duration will constitute "restricted variations" must be specified in regulations by the Secretary of State
  • Regulations may clarify that certain expenses or payments in kind are excluded from the definition of sums payable to employees, meaning variations to these would not be "restricted variations"
  • The Secretary of State may specify additional matters that employment tribunals must consider when determining whether dismissals are fair (where financial difficulties exemptions apply)
  • Similar additional matters may be specified for cases involving non-restricted variations
  • Additional matters may also be specified for cases involving the replacement of employees with non-employees

We are still awaiting clarification on the following issues:

  • Detailed guidance on what constitutes "financial difficulties" sufficient to meet the exemptions
  • How tribunals will assess whether employers "could not reasonably have avoided the need" for changes

Unfair dismissal

Who is affected?

These changes apply to all employees in Great Britain across all sectors. The shorter qualifying period will extend unfair dismissal protection to a significantly larger group of workers who are dismissed within their first two years of employment. Employers of all sizes will be impacted, as they will face potential unfair dismissal claims earlier in the employment relationship and potentially higher compensation awards.

When do the changes come into effect?

The changes to the qualifying period and the removal of the compensatory award cap will come into force on a date to be appointed by the Secretary of State through commencement regulations. No specific date has been fixed in the primary legislation, but it is understood that the six-month right will come into force in January 2027.  The removal of the cap on compensation may occur simultaneously, but compensation caps tend to change in April each year.  The pending impact assessment may mean that the cap will not take place in April 2026, but it is not clear at present whether the change may be made in any event and then reversed when the results of the assessment are available.

The Employment Rights Act 2025 makes some significant amendments to the regime relating to unfair dismissal rights. The key changes are:

  • The qualifying period of continuous employment required before employees can bring an unfair dismissal claim will reduce from two years to six months. This reduction also applies to the right to a written statement of reasons for dismissal.
  • The limit on the compensatory award in unfair dismissal cases will be repealed entirely. This means there will no longer be a statutory cap on the amount of compensation that employment tribunals can award for unfair dismissal.
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What should employers be doing to prepare for it?

Employers should consider taking the following concrete steps to prepare for these changes:

  • With unfair dismissal protection now starting at six months rather than two years, ensure that probationary review processes are proactive and robust. 
  • Invest more time in thorough recruitment, reference-checking, and structured onboarding to reduce the likelihood of early-stage dismissals, as the window for dismissing without unfair dismissal risk has narrowed significantly.
  • Ensure all dismissal procedures meet high standards of fairness. Update HR policies to reflect the new six-month threshold and train managers accordingly.
  • With the removal of the compensatory award cap, employers should:
    • Conduct risk assessments for high-earning employees, as potential awards will now be based solely on actual loss without a statutory ceiling
    • Consider the financial implications when making dismissal decisions, particularly for senior or well-paid roles
  • Provide comprehensive training to line managers on:
    • Fair dismissal procedures and the importance of following them from the outset of employment
    • Proper documentation of performance issues and disciplinary matters
    • The increased financial risks associated with unfair dismissal claims
  • Consider whether current settlement agreement strategies and offer levels remain appropriate given the uncapped compensation landscape.
  • Identify any employees currently within their first two years (but past six months) who will gain unfair dismissal rights when these provisions come into force, and ensure any ongoing performance or conduct issues are being managed appropriately.

What still needs to be decided?

Confusingly, the Government has committed to conducting an impact assessment (but not a consultation) relating to the removal of the cap on compensation, but the legislation to remove it is now in place. It is possible that the position will change, but there is no indication at present as to what will happen.

Collective redundancies

Who is affected?

All employers conducting redundancy exercises potentially affecting 20 or more employees (at one establishment or across multiple establishments, depending on the threshold regulations) within a 90-day period. This includes employers with multi-site operations, shipping companies, and businesses undergoing restructuring or closure.

When do the changes come into effect?

Employers should expect phased implementation, with different provisions commencing on different dates. The Government indicated in July 2025 that it intended to double the maximum period of the protective award for collective redundancy in April 2026.  However, this may change as the Act received Royal Assent much later than anticipated.

The provisions relating to the collective redundancy consultation threshold cannot take effect until the threshold number regulations are made and in force, as these are essential to the operation of the regime, and it would appear that this is unlikely to take place until 2027.  There may be transitional provisions to address redundancy proposals already in progress when the changes take effect.

Until commencement regulations are published, these provisions have no legal effect, and the existing collective redundancy regime under TULR(C)A 1992 continues to apply unchanged.

The Employment Rights Act 2025 reforms the collective redundancy consultation regime by making significant changes to the Trade Union and Labour Relations (Consolidation) Act 1992.

Key changes to consultation thresholds and scope:

  • The maximum period for which employment tribunals may make protective awards for failure to consult is extended from 90 days to 180 days. This means that where an employer fails to comply with collective redundancy consultation duties, affected employees may be awarded remuneration for a protected period of up to 180 days (previously up to 90 days). This doubles the potential financial liability for consultation failures. The protective award is calculated according to the employee's normal gross pay during the relevant period.  Similar provisions apply to the compensation available to ships' crew, following the incident involving the large-scale redundancies at P&O.
  • The duty to consult employee representatives now applies where an employer proposes to dismiss as redundant within 90 days or less either at least a "threshold number" of employees (to be defined in regulations) or 20 or more employees at one establishment.  The "threshold number" will be determined by regulations made by the Secretary of State and may be a specified number, a percentage of the employer's workforce, or the highest or lowest of multiple numbers, but cannot be lower than 20 employees.
  • Where proposed redundancies affect employees at more than one establishment, employers must provide the total number of affected employees and details of the establishments where they work.
  • Employers are not required to consult all appropriate representatives together or to reach the same agreement with all representatives, allowing for separate consultations with different groups.
  • The duty to notify the Secretary of State (via the HR1 form) applies using the same thresholds as the consultation duty: as such, notice must be given before issuing any termination notices, and at least 30 days before the first dismissal (or 45 days if proposing to dismiss 100 or more employees).
People standing at window in corporate building

What should employers be doing to prepare for it?

Employers should consider doing the following:

  • Revise internal guidance on when consultation and notification duties are triggered, accounting for both the 20-employee establishment threshold and the forthcoming "threshold number" based on overall workforce size.
  • If you operate across multiple establishments, develop procedures for calculating potential redundancies across all sites within a 90-day period.
  • Ensure processes prevent termination notices being issued before statutory notifications are made.
  • Build in adequate lead times (minimum 30 or 45 days before first dismissal, depending on numbers).
  • Train HR teams and senior managers responsible for restructuring decisions on the new requirements, particularly the increased protective award risk.
  • Ensure decision-makers understand the potential financial implications of the extended 180-day protective period.
  • Assess financial exposure under the extended protective award regime and factor this into restructuring decisions and budgets.

What still needs to be decided?

The "threshold number" of employees that triggers consultation and notification duties has yet to be confirmed. The regulations that will determine this will clarify:

  • Whether the threshold is a fixed number, a percentage of the workforce, or a hybrid formula.
  • The reference point for calculating the percentage (if applicable), including which employees count and the relevant time for assessment.
  • Whether different thresholds apply to different types of employers or different provisions within the collective redundancy regime.

These regulations must be made by statutory instrument subject to the affirmative procedure (requiring approval by both Houses of Parliament).

Until these regulations are made and in force, the practical scope of the extended collective redundancy regime remains uncertain. Employers will not know definitively whether workforce-wide thresholds apply to their proposed redundancies.

Trade Unions

Who is affected?

One of the most significant parts of the Employment Rights Act 2025 is its effect on trade unions and industrial action.  It introduces substantial reforms to strengthen workers' collective rights whilst removing restrictions imposed by previous legislation.

When do the changes come into effect?

The following provisions come into force at the end of the period of two months beginning with the day of Royal Assent (i.e., 18 February 2026):

Section details
Section Provision

Section 61

Political funds: requirement to pass political resolution

Section 62

Requirement to contribute to political fund

Section 63

Deduction of trade union subscriptions from wages in public sector

Section 66

Facility time: publication requirements and reserve powers

Section 67

Blacklists: additional powers

Section 69

Industrial action ballots: support thresholds

Section 70

Industrial action ballots: information to be included in notices to employers
Section 71

Industrial action ballots: information to be included on voting paper
Section 72

Period after which industrial action ballot ceases to be effective
Section 73

Electronic balloting
Section 74

Notice to employers of industrial action
Section 75

Union supervision of picketing
Section 80

Union annual returns: removal of provision about political expenditure
Section 82

Certification Officer: removal of investigatory powers
Section 83

Certification Officer: powers to be exercised only on application
Section 84

Certification Officer: removal of power to impose financial penalties
Section 86

Certification Officer: appeals to the Employment Appeal Tribunal
Section 87

Employment outside Great Britain
Section 89

Devolved Welsh authorities

 

 

According to the Government's Implementation Roadmap from July 2025, the changes to the trade union recognition process and to electronic and workplace balloting are expected to take effect in April 2026. However, before the provision relating to e-balloting for industrial action can come into force, the Secretary of State must have regard to the effect that e-balloting may have on the proportion of those eligible to vote in such ballots and must lay before Parliament a statement explaining how this has been considered. In October 2026, the duty to inform workers of their right to join a trade union, the enhanced right of access, new rights and protections for trade union reps and extending protections against detriments for taking industrial action will come into effect.  However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

Guidance on political fund opt-out provisions in union rules must be published within three months of the section coming into force.

 

One of the most significant parts of the Employment Rights Act 2025 is its effect on trade unions and industrial action.  It introduces substantial reforms to strengthen workers' collective rights whilst removing restrictions imposed by previous legislation.

Statement of Trade Union Rights

Employers must give workers a written statement confirming their right to join a trade union. This statement must be provided when the employer gives the worker their employment particulars statement, and at other times to be prescribed by the Secretary of State. The Secretary of State may prescribe what information must be included, the form the statement must take, and how it must be given.

Right of trade unions to access workplaces

An "access agreement" is an agreement between a qualifying independent trade union and an employer that allows union officials to physically enter a workplace or communicate with workers for specified access purposes. The access purposes are to meet, support, represent, recruit or organise workers (whether or not union members) and to facilitate collective bargaining, but do not include organising industrial action.

A qualifying trade union may give an employer a request for access by union officials for the access purposes. Access agreements may be entered into by negotiation if the employer responds and the parties agree terms within prescribed periods, which are then notified to the Central Arbitration Committee (CAC). If the employer does not respond within the prescribed period, or negotiations fail, the CAC may determine whether officials are to have access and, if so, the terms on which access must be provided.

The CAC must apply access principles including that union officials should be able to physically enter workplaces or communicate with workers in ways that do not unreasonably interfere with the employer's business, that employers should take reasonable steps to facilitate access, that both physical and remote access should not be refused solely because one of the two forms is permitted, and that access should only be refused entirely where reasonable.

Either party to an access agreement may complain to the CAC that the other party has breached the agreement, or that a person has taken steps to prevent access, within three months of the alleged breach; the CAC may vary the agreement, declare whether the complaint is well-founded, and order steps to ensure compliance. For subsequent breaches within 12 months, the CAC may order the party in breach to pay an amount to the CAC, which can be enforced as a court order.

Trade union recognition

The Act makes extensive amendments to the trade union recognition procedures, including:

  • The minimum number of union members required for a recognition application will be subject to change.  It is currently 10% of the proposed bargaining unit, but this may be reduced to as low as 2% by secondary legislation
  • The turnout threshold (currently 80% of the proposed bargaining unit) will be removed entirely
  • Employers must provide specified information (name, date of birth, category) about relevant workers to the CAC within five working days of notice of a recognition application
  • If the CAC is satisfied the employer has failed to fulfil duties to provide worker information, it may order the employer to remedy the failure
  • If the employer fails to comply with a remedial order, the CAC may issue a declaration that the union is recognised
  • Unions may request access to relevant workers in connection with recognition applications (this is separate to the general right of access, described above) within five working days of acceptance
  • Parties must refrain from unfair practices including dismissals, threats, detriment, offering money for votes, making outcome-specific offers, coercing workers to disclose voting intentions, or using undue influence
  • Recognition agreements entered into by non-independent unions during a restricted period must be ignored when assessing admissibility – in other words, employers are prevented from making 'sweetheart deals' with unions that they have helped to set up specifically to frustrate the recognition process
  • Applications are inadmissible if made within three years of a CAC declaration that a union is not entitled to be recognised for the same or substantially the same bargaining unit
Trade union finances

Union members are now contributors to the political fund by default unless they give an "opt-out notice" to the union (reversing the previous "opt-in" requirement). Trade unions must give opt-out information notices to members within eight weeks of passing a political resolution and at 10-year intervals thereafter.

The restriction on deduction of union subscriptions from wages in the public sector is removed.

Facilities for trade union representatives

Employers who permit trade union officials to take time off must, when requested, provide reasonable accommodation and facilities for carrying out duties or undergoing training, having regard to ACAS Codes of Practice. This requirement also applies to union learning representatives.

The Act creates a new right for union equality representatives to take time off for activities including promoting equality in the workplace, arranging learning or training on equality matters, providing information and advice to members, consulting with the employer, and obtaining and analysing equality-related information. "Equality" is defined to include elimination of discrimination, harassment and victimisation, advancement of equality of opportunity, and fostering good relations between persons with and without relevant protected characteristics.

Publication requirements and reserve powers relating to facility time are removed.

Blacklists

The Secretary of State gains power to make regulations prohibiting the use, sale or supply of lists containing details of trade union members or those who have taken part in union activities, for purposes of discrimination in recruitment or treatment of workers.

Industrial action ballots

The turnout threshold requiring that at least 50% of those entitled to vote must do so is removed. The support threshold requiring a minimum percentage of those entitled to vote to vote "yes" in certain sectors is removed.

Notices to employers about industrial action ballots are simplified to require only the total number of employees concerned, rather than detailed figures and explanations.

The period for which an industrial action ballot remains effective is extended from six months to 12 months.

The notice period that unions must give employers before industrial action is reduced from 14 days to 10 days.

Industrial action: picketing and protection

The requirement for detailed union supervision of picketing, including appointing a picket supervisor and providing information to police, is removed.

Workers gain the right not to be subjected to prescribed detriment by their employer if the act or failure takes place for the sole or main purpose of preventing or deterring the worker from taking protected industrial action, or penalising them for doing so. Workers may present complaints to employment tribunals within six months.

Protection against dismissal for taking industrial action is strengthened by removing the 12-week protected period limit and procedural requirements relating to lock-outs and conciliation.

Strikes: minimum service levels

All provisions relating to minimum service levels during strikes are repealed, including the entirety of the Strikes (Minimum Service Levels) Act 2023.

Certification officer

The oversight powers previously conferred on the Certification Officer have been drastically curtailed.

The requirement for trade unions to include details of industrial action in annual returns is removed. The requirement to include details of political expenditure in annual returns is also removed.

The Certification Officer's enforcement powers relating to annual returns are removed. Investigatory powers of the Certification Officer are removed. Powers to impose financial penalties are removed. Powers to impose a levy on trade unions are removed.

The Certification Officer's powers may now only be exercised on application by a member or union; the ability to act without an application is removed.

Appeals to the Employment Appeal Tribunal from the Certification Officer are limited to questions of law. 

As such, the unions will be subject to considerably less regulatory scrutiny than before.

Regulations

Regulations prescribing matters for access agreements (response and negotiation periods, application periods, CAC determinations, amounts payable for breach) and regulations relating to detriment for taking industrial action must be subject to the affirmative resolution procedure in Parliament.

 

picket line

What should employers be doing to prepare for it?

Employers should consider taking the following steps:

  • Prepare to incorporate the statement of trade union rights into your Section 1 employment particulars templates (or similar document), ready to issue to new starters and existing workers when regulations prescribe the form and content
  • Review current policies on third-party access to premises to understand how union access requests might be accommodated under the new framework
  • Create internal processes for responding to union access requests within the prescribed timeframes, including identifying who will negotiate terms and how decisions will be made
  • Ensure those responsible for employee relations understand the new unfair practices regime during recognition applications, the strengthened protections for industrial action participants, and the new access rights
  • If you recognise unions, open dialogue about how workplace access, facilities for equality representatives, and recognition procedures will operate under the new framework
  • Ensure decision-makers understand the strategic implications of the removal of ballot thresholds, extended ballot validity, and enhanced protections for workers and unions
  • Consider implementing alternative forms of employee representation to forestall trade union recognition, if recognition is a concern.

What still needs to be decided?

Significant elements of this part of the Act depend on secondary legislation and further detail:

Statement of Trade Union Rights

  • The times (other than when providing employment particulars) at which the statement must be given
  • The specific information that must be included, the form the statement must take, and the manner in which it must be given

Workplace Access Agreements

  • The prescribed form, information and manner for access requests from unions
  • The prescribed form, information and manner for employers' response notices
  • The prescribed response period and negotiation period for access agreement negotiations
  • The prescribed period within which applications to the CAC for determination of access must be made
  • Terms that the CAC must consider would not unreasonably interfere with business, would constitute reasonable steps to facilitate access, or would be reasonable for unions to comply with
  • Circumstances in which it is reasonable or mandatory for the CAC to determine that union officials are not to have access
  • Matters to which the CAC must have regard when considering access applications
  • Minimum and maximum amounts payable for breach of access agreements
  • Matters to which the CAC must have regard in determining amounts payable for breach

Trade Union Recognition, access arrangements, etc

  • Detailed regulations relating to the recognition process, including prescribed periods for various stages
  • The "required percentage" of workers who must be union members for recognition applications is currently 10%, but the Secretary of State may amend this to between 2% and 10%
  • Codes of Practice from ACAS or the Secretary of State on access agreements, unfair practices, and related matters
  • Electronic means (other than email and electronic forms) by which members may give opt-out or withdrawal notices
  • Guidance (to be published within three months of commencement) about appropriate provision in union rules for when opt-out notices take effect, subject to revision
  • Codes of Practice from ACAS or the Secretary of State on time off and facilities for equality representatives, and on what training is sufficient
  • Regulations prohibiting the use, sale or supply of lists containing details of union members or participants in union activities for purposes of discrimination
  • Specific provision within regulations on causing another person to do prohibited acts and enforcement mechanisms
  • How existing recognition procedures, ballots, and access arrangements will transition to the new regime
  • Treatment of existing facility time reporting obligations and political fund opt-in arrangements

Precarious workers: Zero hours/Shift workers

Who is affected?

All employers, workers, and employees across all sectors. The enforcement provisions apply to legislation including the National Minimum Wage Act 1998, Working Time Regulations 1998, employment agency rules, gangmaster licensing, and modern slavery offences.

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, the Fair Work Agency body is expected to be established in April 2026. However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

The first labour market enforcement strategy must be published before the beginning of the first 'relevant three-year period', which begins on the next 1 April after this provision comes into force.

The first annual report must be published as soon as reasonably practicable after the end of the first financial year, which runs from the day this provision comes into force to the following 31 March.

Notices of underpayment may relate to sums that became due before this section comes into force, but not before 18 December 2025 (the day the Act was passed), with an exception for national minimum wage arrears.

The Gangmasters and Labour Abuse Authority and the Director of Labour Market Enforcement are abolished, but transitional provisions will manage the transfer of functions, staff, and property to the Secretary of State.

The Employment Rights Act 2025 gives the Secretary of State responsibility for enforcing a wide range of labour market legislation, supported by enforcement officers appointed for this purpose.  The ‘Fair Work Agency’ (FWA) will act on behalf of the Secretary of State, with wide ranging powers, many of which currently sit with other bodies such as HMRC, the Health & Safety Executive, and the Gangmasters and Labour Licensing Authority.  Key provisions include:

  • The FWA will have the power to require individuals to attend interviews, provide information or documents, and produce specified materials by a specified date. Enforcement officers can enter premises (excluding dwellings without a warrant), inspect documents, and access computers used for processing or storing information.
  • The FWA must establish an Advisory Board with at least nine members, consisting of equal numbers representing trade unions, employers, and independent experts, to provide advice on enforcement matters.
  • The FWA must publish a labour market enforcement strategy every three years, setting out assessments of non-compliance with relevant legislation and proposals for how enforcement functions will be exercised.
  • Where the FWA determines that a sum was due to an individual under statutory pay provisions and has not been paid, a notice of underpayment can be issued requiring payment within 28 days. These notices must require payment of a penalty (200% of the underpayment, capped at £20,000 per individual, with a minimum penalty of £100).
  • Where the FWA believes a person has committed or is committing a labour market offence, they can invite the person to give an undertaking, or apply to court for an order, requiring compliance with prohibitions, restrictions, or requirements. These can have effect for up to two years.
  • The FWA may bring employment tribunal proceedings on behalf of a worker who appears not to be pursuing their own claim.
  • The FWA may assist parties to civil proceedings relating to employment law by providing legal advice, representation, or other assistance.
Gavel

What should employers be doing to prepare for it?

  • Ensure robust processes are in place for compliance with all relevant labour market legislation, including national minimum wage, working time regulations, statutory sick pay, and employment agency requirements.
  • Be prepared to produce documents in electronic form that can be taken away and are visible and legible. Maintain accurate, accessible records of pay, hours worked, contracts, and statutory entitlements.  In particular, the Act has introduced a new requirement whereby employers must keep records that are adequate to show compliance with annual leave entitlements under the Working Time Regulations 1998. These records must be retained for six years from the date they were made. Records may be created, maintained and kept in such manner and format as the employer reasonably thinks fit. Failure to comply with this duty is a criminal offence.
  • Train HR and management teams on enforcement powers and their obligations to cooperate with enforcement officers, including understanding when premises entry may occur and what information can be requested.
  • Understand that the Secretary of State can require attendance at interviews, provision of information, or production of documents. Establish internal procedures for responding to such requests promptly.
  • Conduct audits to identify and remedy any potential underpayments or non-compliance issues before enforcement action is taken. Be aware that the "required sum" in underpayment notices may be calculated based on current rates rather than historic rates.
  • Familiarise yourself with the penalty structure (200% of underpayments, capped at £20,000 per individual) and the early payment discount provisions.
  • If contacted by enforcement officers, respond cooperatively and seek legal advice where appropriate. Understand your appeal rights against notices of underpayment (28 days from receipt) and the grounds on which appeals can be made.

What still needs to be decided?

Several aspects of the enforcement regime are subject to secondary legislation or delegated rulemaking:

  • Regulations may provide for determining the sum required to be paid where it would have been greater if calculated by reference to current provisions, and may specify maximum amounts.
  • The Secretary of State may make regulations altering the claim period (currently six years) for notices of underpayment, potentially specifying different periods for different statutory pay provisions.
  • The Secretary of State may amend penalty percentages and amounts, including specifying different rates for different purposes.
  • The Secretary of State may issue directions specifying circumstances in which notices of underpayment do not impose a penalty requirement.
  • Regulations will specify additional measures (prohibitions, restrictions, or requirements) that may be included in labour market enforcement undertakings and orders.
  • Regulations may provide for charges to recover enforcement costs, including fixed amounts or hourly rates, and determination schemes.
  • The Secretary of State may add new enactments to the list of relevant labour market legislation subject to enforcement.
  • The Secretary of State may make arrangements with public authorities to delegate enforcement functions, though the details of such arrangements have not yet been specified.
  • The list of persons to whom enforcement information may be disclosed may be amended by regulations.

Sectoral bargaining

Who is affected?

The Employment Rights Act 2025 establishes sectoral bargaining frameworks for school support staff in England, and social care workers in England, Wales and Scotland. Each framework operates differently and is covered separately below.

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, the Government will consult on reinstating the School Support Staff Negotiating Body and the Fair Pay Agreement for the Adult Social Care sector in Summer/Autumn 2025. Regulations to establish the Fair Pay Agreement Adult Social Care Negotiating Body are expected to be brought forward in October 2026. However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

School Support Staff
  • Section 38 and Schedule 4 establish the legislative framework for the SSSNB, but the body itself must be constituted by arrangements made by the Secretary of State
  • No specific commencement date is provided; implementation depends on:
    • The Secretary of State making constitutional arrangements for the SSSNB
    • Prescription of school support staff organisations and employer organisations
    • The SSSNB being established and beginning to function
    • Matters being referred to the SSSNB for consideration
    • Agreements being reached and ratified by regulations, or regulations being made by the Secretary of State
  • Pre-commencement consultation is permitted: if consultation takes place before Schedule 12A comes into force that would have satisfied consultation requirements, those requirements are deemed satisfied
Social Care Workers
  • The provisions grant powers to establish Negotiating Bodies but do not require their establishment
  • Implementation is entirely dependent on:
    • The appropriate authority (Secretary of State, Welsh Ministers, or Scottish Ministers) choosing to exercise the power to establish a Negotiating Body by making regulations
    • Further regulations being made about membership, procedure, remit, and operational matters
    • The Negotiating Body being convened and beginning to consider matters
    • Agreements being reached and ratified, or the appropriate authority making regulations where no agreement is reached
  • No fixed timescale or commencement date is specified; this is a framework that may be activated at the discretion of the relevant authority

 

The sectoral bargaining frameworks are enabling provisions that require substantial secondary legislation (regulations) and administrative action before they become operational. Employers should monitor government announcements and consultations regarding the making of these regulations to understand when specific obligations will commence.

 

The Employment Rights Act 2025 establishes sectoral bargaining frameworks for school support staff in England, and social care workers in England, Wales and Scotland. Each framework operates differently and is covered separately below.

School support staff in England

The Act establishes the School Support Staff Negotiating Body (SSSNB), an unincorporated body with functions relating to school support staff in England. School support staff are defined as persons employed by local authorities or governing bodies of maintained schools, or by Academy proprietors, under contracts providing for work wholly at schools, excluding school teachers.

The SSSNB's remit covers matters relating to remuneration, terms and conditions of employment, training, and career progression for school support staff. The Secretary of State may refer matters within the SSSNB's remit to the body for consideration, particularly matters relating to remuneration or terms and conditions of employment.

The SSSNB's membership must include persons representing prescribed school support staff organisations, prescribed employer organisations, and the Secretary of State. An independent chair must be appointed who does not represent the interests of staff organisations, employer organisations, the Secretary of State, or any other represented party.

Social Care Workers (England, Wales, and Scotland)

The Act grants powers to establish Social Care Negotiating Bodies: the Adult Social Care Negotiating Body for England (by the Secretary of State), the Social Care Negotiating Body for Wales (by Welsh Ministers with the Secretary of State's agreement), and the Social Care Negotiating Body for Scotland (by Scottish Ministers with the Secretary of State's agreement).

A social care worker is defined as a person employed wholly or mainly in, or in connection with, the provision of social care to individuals aged 18 or over (in England) or to any individual (in Wales or Scotland). The Negotiating Bodies' remit covers remuneration, terms and conditions of employment, and other specified matters relating to employment as a social care worker.

Membership of each Negotiating Body must include officials of trade unions representing social care workers and persons representing employers of social care workers. When a Negotiating Body submits an agreement to the appropriate authority, that authority may make regulations ratifying the agreement in full or to the extent specified.

If an agreement is ratified and relates to remuneration, social care workers' remuneration must be determined and paid in accordance with the agreement; provisions relating to other terms or conditions have effect as terms of the worker's contract. However, agreements cannot alter terms to a worker's detriment, and workers may still receive more favourable terms than those in the agreement.

Where a Negotiating Body notifies the appropriate authority that it has been unable to reach an agreement and specified conditions are met, the appropriate authority may make regulations about the matter, which can determine terms and conditions of employment.

 

black and white view of the thames and tower bridge

What should employers be doing to prepare for it?

School support staff employers (Local Authorities, Maintained Schools, Academies)

  • Monitor the establishment of the SSSNB and its constitutional arrangements, which will be made by the Secretary of State following consultation with prescribed organisations
  • Prepare for potential changes to remuneration, terms and conditions, training requirements, and career progression frameworks once the SSSNB begins operating
  • Review current employment contracts, policies, and procedures for school support staff to identify areas that may be affected by future SSSNB agreements
  • Engage with prescribed school support staff employer organisations that will represent employer interests on the SSSNB
  • Budget for potential changes to pay and conditions that may result from ratified agreements
  • Ensure HR systems can accommodate changes to terms and conditions that may be imposed by ratified agreements or regulations

Social care employers (England, Wales, Scotland)

  • Monitor whether and when Social Care Negotiating Bodies are established in your jurisdiction (this requires regulations to be made)
  • Engage with employer representative organisations that may be appointed to the relevant Negotiating Body
  • Review current employment contracts, pay structures, and terms and conditions for social care workers
  • Prepare to comply with potential record-keeping requirements that may be imposed by regulations, requiring employers to keep records in a specified form and manner and preserve them for a specified period
  • Budget for potential changes to remuneration and terms and conditions resulting from ratified agreements
  • Employers must comply with potential record-keeping requirements that may be imposed by regulations. These regulations may require employers to keep records of a specified description in a specified form and manner, and to preserve those records for a specified period. The regulations may apply provisions of the National Minimum Wage Act 1998 relating to workers' rights of access to records, failure to allow access, and restrictions on contracting out, with or without modifications.
  • Note that agency workers who are not otherwise "workers" will be treated as if there were a worker's contract for the purposes of this Chapter

What still needs to be decided?

School support staff

  • The Secretary of State must make arrangements constituting the SSSNB, following consultation with prescribed school support staff organisations and prescribed school support staff employer organisations
  • Regulations must be made to prescribe what payments or entitlements are treated as remuneration, what matters relate to terms and conditions, training, or career progression
  • The Secretary of State may specify factors the SSSNB must consider when reviewing matters and dates by which the SSSNB must comply with its duties
  • The specific matters that will be referred to the SSSNB for consideration have not yet been determined
  • Whether and to what extent any agreements reached by the SSSNB will be ratified by regulations
  • The content of any guidance to be issued by the SSSNB (with Secretary of State approval) or by the Secretary of State relating to ratified agreements or regulations

Social care workers

  • Whether Social Care Negotiating Bodies will actually be established (this is a power, not a duty) and, if so, when – separate regulations are required for England, Wales, and Scotland
  • All detailed provisions about the Negotiating Bodies' membership, appointment procedures, decision-making processes, record-keeping, payment of fees and expenses, staffing, and reporting requirements
  • The specific matters within each Negotiating Body's remit, including which categories of social care workers are covered and what employment-related matters are included
  • Detailed provisions about how Negotiating Bodies will consider matters, including circumstances triggering consideration, factors to be considered, conditions for agreements (including funding conditions), information requirements, and timescales
  • Provisions about reconsideration of agreements referred back by the appropriate authority
  • Provisions for resolving disagreements when a Negotiating Body cannot reach agreement
  • The form, manner, and description of records employers must keep, and the period for which they must be preserved
  • Provisions about guidance or codes of practice to be issued by the appropriate authority, including duties on specified persons and consequences of non-compliance

Precarious workers: Zero hours/Shift workers

Who is affected?

All

When do the changes come into effect?

According to the Government's July 2025 Implementation Roadmap, employment tribunal time limits (extending from three months to six months) and the changes to tipping law are expected to take effect in October 2026. The regulation of umbrella companies is expected to take effect in 2027.  However, as the Employment Rights Act 2025 did not receive Royal Assent until 18 December 2025 (significantly later than anticipated when the Roadmap was published), these dates may be subject to revision.

The review of time off for public duties for special constables must be completed and published within 12 months of Royal Assent (by 18 December 2026). Guidance on employment of children on heritage railways must be prepared and published within 12 months of Royal Assent (by 18 December 2026).

The Employment Rights Act 2025 introduces a number of important provisions in addition to those described in other sections.  The key measures include tribunal time limits, tips and gratuities, public sector outsourcing, employment business regulation, heritage railways, and procedural provisions.

Time limits

The Act increases time limits for making claims to employment tribunals in Great Britain (and certain industrial tribunal claims in Northern Ireland) from three months to six months. This applies across virtually all employment rights including: unfair dismissal; unlawful deduction of wages; discrimination under the Equality Act 2010; time off rights (public duties, redundancy, ante-natal care, adoption appointments, dependants, pension trustees, employee representatives, study or training); flexible working requests; carer's leave; trade union rights (unjustifiable discipline, unauthorised deductions, training obligations, political fund deductions, refusal of employment, inducements, detriment, time off for activities); collective redundancy consultation failures; protective awards; unpaid pension contributions; written statement complaints; tips information requests; guarantee payments; working time rights; national minimum wage record access; right to be accompanied; and transnational information and consultation rights. The extension also applies to merchant shipping, civil aviation, fishing vessels, and cross-border railway services working-time claims. This is a fundamental change affecting limitation periods across employment law and significantly extends the period during which employers face potential claims and must retain evidence.

Tips and gratuities

The Act requires employers to consult with trade union representatives or workers before producing their first written policy on allocating tips, and to review that policy at least every three years with further consultation. Employers must also make an anonymised summary of consultation views available to all workers at the workplace.

Time off for public duties

The Act requires the Secretary of State to review, within 12 months of the Act passing, whether employers should be required to permit employees to take time off to perform the functions of a special constable (including British Transport Police and Police Service of Scotland special constables).

Definition of employment businesses

The Act extends the Employment Agencies Act 1973 to capture a much wider range of entities involved in worker supply chains. In particular, it fundamentally expands the definition of 'employment business' to include businesses 'participating in employment arrangements', where 'employment arrangements' are arrangements under which persons in someone's employment are supplied to act for and under the control of another person. 'Participating in' these arrangements includes: (a) being an employer of the supplied persons; (b) paying for, receiving, or forwarding payment for their services in consideration of receiving a fee from them; (c) supplying those persons; or (d) taking steps with a view to any of the above. This brings umbrella companies, payment intermediaries, and other entities within the regulatory scope of the Employment Agencies Act 1973, even if they are not the direct employer or supplier.

Public sector outsourcing

The Act inserts new provisions into existing legislation, requiring public contracting authorities to include worker protection provisions in relevant outsourcing contracts. A 'relevant outsourcing contract' is a public contract (or framework) for services that include performing functions previously performed by the contracting authority, where transferring workers will be employed by the supplier or sub-contractor. The appropriate authority (Minister of the Crown, Scottish Ministers, or Welsh Ministers) may make regulations specifying provision to be included in such contracts to ensure transferring workers and non-transferring workers are treated no less favourably. Contracting authorities must take all reasonable steps to ensure specified provision is included and complied with. The appropriate authority must also prepare and publish a code of practice containing guidance to contracting authorities, and contracting authorities must have regard to this code. This applies to central government, local authorities, NHS bodies, and other public authorities, but not to private utilities, certain devolved Welsh authorities, or (generally) transferred Northern Ireland authorities.

Employment of children on heritage railways

The Office of Rail and Road and the Health and Safety Executive, acting jointly, must prepare and publish guidance within 12 months of the Act being passed. This guidance must set out circumstances in which a child carrying out activities for a heritage railway in Great Britain is, or is not, to be regarded as employed in an industrial undertaking for the purposes of section 1 of the Employment of Women, Young Persons and Children Act 1920 (which restricts employment of children in industrial undertakings). A 'heritage railway' means a railway operated for preserving, recreating or simulating railways of the past, or demonstrating historical motive power or rolling stock, and used exclusively or primarily for recreational or educational purposes. The guidance may be revised and republished from time to time.

Seafarers

The Act introduces provisions that are designed to offer enhanced protection to seafarers and sets out a framework that covers both wages and working conditions.

 

a person in a kitchen

What should employers be doing to prepare for it?

Employers should consider doing the following, depending on what is appropriate for their sector.

  • Update HR systems and processes to accommodate the new six-month time limit for employment tribunal claims (up from three months), which will affect case management, record retention, and response timelines
  • Review your consultation processes to ensure you consult with recognised trade union representatives, elected worker representatives, or workers directly before producing your first tips allocation policy
  • Establish a system to review your tips policy at least once every three years, with the first review within three years of making the policy available

What still needs to be decided?

Tips and gratuities

The consultation and review requirements are fully specified in the Act, but enforcement mechanisms and penalties for non-compliance may be subject to further regulations.

Time off for public duties

The Secretary of State must conduct a review and publish findings on whether time off rights should be extended to special constables, but the outcome of this review and any subsequent legislative changes are not yet determined.

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