Global Blog

The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and is being brought into force in tranches. Four commencement orders have been made so far, more are awaited, and the government’s published timeline has already shifted twice this year.

The result is a confusing picture. Some of the Act is law today. A substantial tranche lands this autumn. The change with the greatest financial consequence takes effect on 1 January 2027. And a good deal of what has been widely reported as “coming in” is still a consultation.

This article sets out where matters actually stand as at August 2026, what employers should be doing now, and where the commentary has got ahead of the legislation.

One preliminary point on scope. The Act’s territorial extent is mixed: most of it applies across Great Britain, some parts to England and Wales only, some UK-wide, and the statutory sick pay provisions in sections 12 and 13 extend to Northern Ireland. Northern Ireland otherwise has separate employment legislation and separate compensation limits, and the unfair dismissal reforms described below do not apply there.

Already in force: the April 2026 tranche

Statutory sick pay was rebuilt. From 6 April 2026, SSP is payable from the first qualifying day of absence, the three waiting days are gone, and the lower earnings limit no longer operates as an eligibility condition, bringing roughly 1.3 million low-paid workers into scope. Low earners receive the lower of the flat rate (£123.25 per week for 2026/27) or 80% of normal weekly earnings. Note that the lower earnings limit still governs eligibility for statutory maternity, paternity, adoption, shared parental, bereavement and neonatal care pay, which stand at £194.32 per week.

Paternity and unpaid parental leave became day-one rights. The 26-week and one-year service requirements have gone. Statutory paternity pay, however, still requires 26 weeks’ service, a distinction worth building into your policies rather than discovering during a query.

The collective redundancy protective award doubled, from 90 to 180 days’ pay per affected employee. Any restructuring plan that treats a possible protective award as a manageable cost needs to be re-run on the new figure.

Holiday records became a criminal matter. Employers must now keep adequate records for six years showing correct leave allocation, correct holiday pay and correct payment in lieu on termination. Failure to do so is an offence carrying a potentially unlimited fine. In our experience this is the most commonly overlooked change of the whole April tranche, because it imposes an administrative duty rather than granting a right.

The Fair Work Agency opened on 7 April 2026, absorbing the Gangmasters and Labour Abuse Authority and the Employment Agency Standards Inspectorate, with entry powers, document powers and the power to bring tribunal proceedings on behalf of workers. National minimum wage enforcement remains with HMRC and is due to transfer in April 2027. Separately, the government is consulting until 22 September 2026 on giving the Agency holiday pay enforcement powers modelled on the minimum wage regime, arrears recovery plus a penalty of up to 200% of the underpayment, capped at £20,000 per worker and halved for prompt payment. Those powers are expected in 2027 and are not yet in force.

Also from April 2026: whistleblowing protection now expressly covers disclosures about sexual harassment; gender pay gap and menopause action plans are available on a voluntary basis ahead of becoming mandatory for larger employers; the unfair dismissal compensatory award rose to £123,543 and a week’s pay to £751; and the National Living Wage rose to £12.71, with £10.85 for 18 to 20-year-olds and £8.00 for 16 and 17-year-olds and apprentices.

Industrial relations: quietly the biggest shift

Much of the Trade Union Act 2016 was unwound on 18 February 2026. The 40% support threshold for important public services has gone. Notice of industrial action to the employer has been cut from 14 days to 10. A ballot mandate now lasts 12 months rather than six. The requirement to appoint a picket supervisor has been repealed. The repeal of the Strikes (Minimum Service Levels) Act 2023 took effect on Royal Assent itself.

Most significantly, dismissal for taking protected industrial action is now automatically unfair regardless of how long the action has lasted; the 12-week protected period no longer applies.

From 25 August 2026, electronic and workplace balloting becomes available for statutory union ballots, industrial action, union elections, political fund and merger ballots, though not yet for recognition and derecognition ballots, which follow in 2027. A statutory Code of Practice was published in final form on 28 July 2026. Postal ballots have historically been a significant practical brake on turnout. Employers in unionised sectors should assume that ballots will become easier to win.

1 October 2026: two dates in one

Tribunal time limits double. The limitation period for bringing most employment tribunal claims extends from three months to six. The regulations were made on 6 July 2026 and the change applies where the relevant act or date falls on or after 1 October 2026, so the old three-month period continues to run off for earlier events. The practical consequences are easy to underestimate: exposure windows lengthen, document retention becomes more important, witnesses are harder to locate, and the tactical value of a prompt settlement changes.

Right to work checks expand. Under section 48 of the Border Security, Asylum and Immigration Act 2025, the duty to check extends beyond employees to individuals engaged under a worker’s contract, individual sub-contractors in a contractual chain, and online platforms that supply a service provider’s details for a fee. Construction, food delivery, courier services, beauty salons and warehousing are the named target sectors. Civil penalties currently stand at £45,000 per illegal worker for a first breach and £60,000 for repeat breaches, and new provisions can make businesses further up a contractual chain liable unless prescribed contractual and verification requirements are met. Helpfully, a penalty can only arise where the engagement began on or after 1 October 2026, so there is no retrospective exposure, but there is a real scoping exercise to do before then.

30 October 2026: harassment and union access

The government confirmed this date in its 7 August 2026 timeline update, and the trade union access Code and regulations have been laid before Parliament. The commencement regulations themselves had not appeared by mid-August, and the regulations that will specify required preventative steps on harassment have not been made either, so treat the date as firm policy rather than settled law.

• The duty to prevent sexual harassment is strengthened from “reasonable steps” to all reasonable steps. That is a materially higher bar, and a risk assessment carried out in 2024 will not discharge it.
• Employer liability for third-party harassment returns, covering harassment by customers, clients and contractors across protected characteristics other than marriage and civil partnership and pregnancy and maternity.
• Trade unions gain a right of access to workplaces, physical and electronic, with disputes referable to the Central Arbitration Committee. Employers must give workers a written statement of the right to join a union.
• Protection against detriment for industrial action is extended. The government intends to bring these claims within the existing uplift mechanism attached to the ACAS Code of Practice on Disciplinary and Grievance Procedures, allowing tribunals to adjust awards by up to 25%, though that still requires implementing legislation.

1 January 2027: the change that matters most

Two things happen at once, and the second is more expensive than the first.

The unfair dismissal qualifying period drops from two years to six months. It is worth being precise here, because much of the commentary is not: this is not a day-one right. The day-one proposal was abandoned during the Bill’s passage, and with it went the proposed statutory “light touch” probationary dismissal process. Employers get a shorter qualifying period and no compensating procedural concession.

The cap on the compensatory award is abolished entirely. Section 124 of the Employment Rights Act 1996 is repealed, removing both the £123,543 monetary limit and the 52-week pay limit. From January 2027, an unfair dismissal award is measured by loss, without a ceiling. For senior, high-earning employees this transforms the risk profile of a badly handled dismissal.

Two practical points:

• The reforms apply where the effective date of termination falls on or after 1 January 2027, even if the dismissal was communicated earlier.
• Where an employer dismisses without giving statutory minimum notice, qualifying service is calculated as though statutory notice had been given. A dismissal at five months and three weeks can therefore tip the employee over six months. The safe working assumption is to complete probationary decisions by month five.

The same date brings the new restrictions on “fire and rehire”. Dismissing an employee for refusing a restricted variation, broadly, cuts to pay or performance-related pay measures, pension terms, contractual hours, the timing or duration of shifts, or time off, will be automatically unfair, as will dismissing and replacing an employee with a non-employee. The only escape is narrow: the employer must show the variation responded to financial difficulties that were affecting, or were likely imminently to affect, its ability to carry on the business as a going concern, and that it could not reasonably have avoided the need for the variation.

2027 and beyond: plan, do not act yet

These measures are in the Act but await regulations, and the detail is genuinely unsettled:

• Zero and low hours contracts – a right to a guaranteed hours offer reflecting hours regularly worked, reasonable notice of shifts, and payment for cancelled, moved or curtailed shifts. The consultation closes on 25 August 2026; if this affects your workforce, respond.
• Agency workers – the same regime, with responsibility split between hirer and agency.
• Non-disclosure agreements – provisions voiding any agreement that prevents a worker making allegations of harassment or discrimination. The consultation on permitted “excepted agreements” closed on 8 July 2026 and the response is awaited. Settlement agreement precedents will need reworking.
• Bereavement leave – at least one week, unpaid, extended to pregnancy loss before 24 weeks.
• Pregnancy and maternity – enhanced dismissal protection extending six months beyond return.
• Mandatory equality action plans for employers with 250 or more staff, and an additional collective redundancy trigger based on numbers across the whole employer, sitting alongside the existing test of 20 at one establishment.
• Flexible working – refusal permitted only where a statutory ground applies and the refusal is reasonable, with the tribunal able to review reasonableness. The consultation closed on 30 April 2026 and the response is awaited.

Ethnicity and disability pay gap reporting has been confirmed in principle for employers with 250 or more staff, but no legislation has been introduced and no date has been set.

The unresolved problem: single-sex facilities

For Women Scotland Ltd v The Scottish Ministers [2025] UKSC 16 held that “sex” in the Equality Act 2010 means biological sex. The EHRC’s revised Code of Practice came into force on 5 August 2026, but it covers services, public functions and associations, and does not apply to employment. No updated employment Code exists, and none has been consulted on.

Employers are therefore navigating this without guidance, and first-instance decisions are pulling in different directions. Seven nurses recovered £187,000 by settlement in June 2026 after a tribunal upheld their claims of discrimination and harassment related to sex and to gender-critical belief, arising from a requirement to share female changing facilities with a biological male colleague. A similar claim against NHS England succeeded in May 2026. A comparable claim in Kelly v Leonardo UK Ltd failed in November 2025, with an appeal indicated but not confirmed. And the Employment Appeal Tribunal granted permission to appeal in Peggie v Fife Health Board on 31 July 2026, with a hearing expected in early 2027.

None of these is binding authority. The workable position for now is to provide single-sex facilities where undressing occurs, offer genuinely equivalent gender-neutral alternatives, avoid compelling any employee into facilities they find unsafe, and consult properly before changing a policy. Doing nothing is not neutral, it is where the current claims are coming from.

What to do in the next eight weeks

1. Diary four dates: 25 August, 1 October, 30 October 2026 and 1 January 2027.
2. Audit your holiday records against the six-year duty. This is already a criminal offence.
3. Rewrite probation and performance timetables so decisions land by month five, well before January 2027.
4. Refresh your sexual harassment risk assessment for the “all reasonable steps” standard, and extend it to third-party risk from customers and contractors.
5. Scope your worker, contractor and platform population for the October right to work changes, and review supply chain contracts for the warranties you will need.
6. Review document retention against a six-month limitation period.
7. Revisit facilities policies, and settlement agreement templates ahead of the NDA restrictions.

How we can help

We advise employers across the full implementation programme, policy and contract updates, harassment risk assessments, restructuring and redundancy planning, and the difficult individual cases. Our AI Contract Lifecycle Management platform tracks your employment documentation and flags what each commencement date requires you to change, and where a judgement call is needed you can reach a qualified lawyer at the touch of a button.

If you would like a review of your contracts and policies against the 2026 and 2027 timetable, please get in touch.

This article is general information about the law of England and Wales as at 18 August 2026. It is not legal advice and should not be relied upon as such. Commencement dates described as government intention may change. Some dates differ elsewhere in the UK,  the extension of time limits for breach of contract claims takes effect in Scotland on 9 November 2026, for example. Please take advice on your specific circumstances.