In brief
- The Employment Rights Act 2025 introduces the biggest changes in employment law in a generation and will require employers to rethink how they employ, manage and part ways with their staff.
- Flexibilities from using zero hours workers will be significantly reduced, as new rights to guaranteed hours and reasonable notice of shifts are introduced, which may be more challenging in the beauty and wellness sector where flexible hours and client-led scheduling are central.
- Greater trade union involvement can be expected, with workers' collective rights being substantially strengthened.
- Unfair dismissal rights will be significantly enhanced, requiring more proactive workforce management from recruitment through to dismissal.
- New liability risks for harassment by clients and other third parties will require careful handling. Staff in this sector are more vulnerable than other sectors given the close physical interaction with clients.
The biggest shake up of employment rights in a generation
The Employment Rights Act 2025 (the Act) rebalances the relationship between employers and their staff, with a marked shift towards greater structure and employer accountability. For beauty and wellness businesses - where flexible hours, client-led scheduling, and client interaction are part of the DNA - the impact will be substantial.
A reduction in workforce flexibility
A major change being introduced by the Act in 2027 is the provision of protections for workers on zero or low hours contracts.
Guaranteed hours
Employers will be required to offer these workers (and agency workers) a guaranteed hours contract if they regularly work at least a minimum number of hours over a reference period.
Workers don't have to accept the offer – perhaps preferring the flexibility of their existing zero or low hours arrangement – but employers must make a new offer each time the worker qualifies.
Shift notice and compensation
Employers will also need to give workers on zero or low hours contracts reasonable notice of shifts and reasonable notice of any changes or a cancellation. If a shift is cancelled, modified or moved on short notice, the employer must compensate the affected workers.
Trade union involvement
The Act fosters greater trade union involvement, with a package of measures being introduced during 2026 to increase trade union rights.
Employers will be required to remind workers on recruitment and at regular intervals of their right to join a trade union. Trade unions will also have much more extensive rights to access nearly any workplace — both physically and digitally — to recruit and support workers. For employers with little prior union engagement, this is a development worth taking seriously: workplace access facilitates the path towards obtaining collective bargaining rights, which the Act makes easier for unions to acquire. The Act also simplifies the process for trade unions to take industrial action.
Stronger unfair dismissal protections: more proactive workforce management
Employees dismissed from 1 January 2027 will be able to claim unfair dismissal after just six months' employment, rather than two years. The current cap on unfair dismissal compensation is also being removed, further increasing liability risks.
Prevent third party harassment
Many workers in the beauty and wellness sectors have close physical interaction with clients, leaving them more vulnerable to harassment. The existing proactive duty on employers to prevent sexual harassment is being tightened to require all reasonable steps. Employers will also become liable for harassment of staff by clients and other third parties, unless they can show they have taken all reasonable steps to prevent it. These changes will take effect in October 2026. What constitutes "all reasonable steps" will depend on the business. A massage therapy clinic, for example, might need to implement client codes of conduct, establish protocols for refusing service to clients who harass staff, and install panic buttons in treatment rooms – a package of measures rather than a tick-box exercise.
Many more changes to take into account
The Act introduces a package of other changes that employers need to prepare for, including:
- Tipping arrangements – employers will have to consult with workers (or their trade union representatives) before establishing a written tipping policy, to be reviewed at least every three years;
- Enhanced right to request flexible working – whilst employees already have a day-one right to request flexible working, any employer refusal will have to be reasonable in the circumstances; and
- Collective redundancies – a doubling of the maximum award for consultation breaches to 180 days, and changes to trigger consultation more frequently in multi-site workforces.
You can read more about the reforms by visiting our dedicated Employment Rights Act hub.
Practical steps
Beauty and wellness businesses should:
- audit zero and low hours contracts to identify workers who may qualify for guaranteed hours contracts, and review shift-scheduling practices to minimise short-notice changes and the associated compensation obligations;
- consider ways to ensure their workforce feels heard, especially if trade union involvement is a concern;
- tighten up recruitment and probationary processes and review fair dismissal procedures to ensure they are robust;
- review harassment prevention measures to identify what steps may be needed to meet the 'all reasonable steps' defence for third party and sexual harassment; and
- train HR teams and managers on the operational impact of these changes.
How we can help
Our Employment team partners with beauty and wellness businesses to identify and manage employment risk and ensure compliance - from contracts and policies, to training and dispute resolution.
If you have questions about how the Act may affect your business, reach out to a member of our Employment team.