The Employment Rights Bill has now passed through Parliament and received Royal Assent, becoming the Employment Rights Act 2025. This landmark legislation represents the most significant overhaul of workplace rights in a decade, with phased implementation starting in April 2026 and continuing into 2027. For employers, January is the perfect time to prepare.
In this article, we’ll explore why the Act was introduced, the key changes in chronological order, what they mean for your business, and how our team at DJH People & HR can help you stay compliant and confident.
Why has the Employment Rights Act been introduced?
The Act is part of the government’s “Plan to Make Work Pay”, designed to modernise workplace rights, strengthen worker protections, and improve fair pay and flexibility. It addresses long-standing concerns around zero-hours contracts, limited day-one rights, and gaps in sick pay and family leave.
In short, the aim is to create a fairer, more predictable employment landscape that reflects the realities of today’s workforce.
Key Changes and when you can expect them
Trade Union Reform (Early 2026)
Early in 2026, the government will repeal the Strikes (Minimum Service Levels) Act 2023 and simplify ballot and notice requirements for industrial action. Employees will gain enhanced protections against dismissal for taking part in industrial action, and restrictions on trade union political funds will be removed.
New starters will need to be informed of their right to join a trade union from day one, and existing workers will receive annual reminders, although the exact mechanism for this is still subject to secondary legislation.
Sick Pay and Family Leave (April 2026)
From April 2026, Statutory Sick Pay will be available from the very first day of absence, removing the previous three-day waiting period. In addition, both paternity leave and unpaid parental leave will become day-one rights, giving employees immediate access to these entitlements without any qualifying period.
Employers should review payroll systems and absence management processes to ensure compliance and prepare for potential changes in absence patterns.
Enforcement and Oversight (April 2026)
April also marks the introduction of the Fair Work Agency, which will oversee compliance with holiday pay, minimum wage, and wider labour standards. This agency will have enhanced powers to enforce regulations and issue penalties for non-compliance.
Businesses should expect greater scrutiny and consider proactive audits to ensure policies, contracts, and training are up to date.
Fire and Rehire Restrictions (October 2026)
By October 2026, new restrictions will apply to fire-and-rehire practices. Any dismissal primarily aimed at forcing employees to accept new contract terms will be deemed automatically unfair, except in cases of severe financial distress.
Employers should review their change-management strategies and ensure meaningful consultation when altering terms to avoid tribunal exposure.
Harassment Prevention (Expected October 2026)
Later in the year, employers will face a new duty to take “all reasonable steps” to prevent harassment, including liability for third-party harassment in certain circumstances.
This means moving beyond policy statements and implementing practical measures such as training, reporting mechanisms, and documented evidence of compliance.
Unfair Dismissal Rights (January 2027)
Finally, from January 2027, the qualifying period for unfair dismissal claims will reduce from two years to six months, and the cap on compensation will be removed.
This change significantly increases potential financial exposure for businesses, making robust probation processes and early performance management essential.
When do these changes take effect?
Although the Act is now law, several consultations are still underway, including pregnancy-related dismissal protections and unpaid bereavement leave. Topics likely to be consulted on include zero-hour and guaranteed hours practices, ,mandatory gender pay gap and menopause report, tipping law reform, collective redundancy processes, and flexible working rights. For businesses likely to be affected, responding to these consultations is one of the few remaining opportunities to influence how the final rules will operate.
What should businesses do now and throughout the year
Businesses that plan early will reduce risk, avoid rushed decisions, and control costs far more effectively than those that wait. Here’s a practical roadmap to prepare for the phased implementation throughout 2026 and 2027:
Assign a Compliance Lead (January 2026)
Designate someone to oversee preparations and ensure your organisation stays ahead of legislative changes. Engage specialist HR support to translate complex requirements into practical solutions.
Review Probation Policies (by March 2026)
With unfair dismissal rights reducing to six months from January 2027, robust probation processes and early performance management will be critical. Train managers to hold meaningful reviews and document issues effectively.
Update Absence and Sick Pay Processes (by April 2026)
Remove outdated references to waiting days and ensure payroll systems reflect day-one Statutory Sick Pay and family leave entitlements. These changes take effect from April 2026.
Collective Consultation Compliance (April 2026)
Protective awards for failure to consult will double from 90 to 180 days’ pay. Review redundancy processes and ensure compliance to avoid significant financial exposure.
Refresh Dismissal and Settlement Strategies (Mid-2026)
Prepare for the removal of compensation caps and increased tribunal risk. Update policies and train managers on fair and compliant change-management practices.
Strengthen Harassment Prevention Measures (by October 2026)
Move beyond policy statements to practical steps such as training, reporting mechanisms, and documented evidence of compliance. The new duty to prevent harassment will apply from October 2026.
Why acting early matters
Proactive compliance isn’t just about avoiding risk – it builds trust, improves retention, and positions your business as an employer of choice. These changes are coming, and businesses that prepare now will save time, money, and stress later.
How we can help your business
Our specialist HR team at DJH is here to guide you through every stage of these changes. We don’t just update policies – we partner with you to ensure a robust framework that supports compliance in a practical and stress-free way. Here’s how we can help:
We provide tailored policy and handbook updates, manager training programmes focused on performance management and consultation, and workforce planning support for guaranteed hours and shift notice compliance.
We also monitor legislation and deliver briefings aligned to April and October commencement dates, guiding senior leadership teams through structured decision-making to align organisational strategy with updated legislation.
