Scaremongering versus reality

The Employment Rights Act (originally known as the Employment Rights Bill) has been a thing ever since Labour came into power.

18 months later, it has finally become law and, not surprisingly, the headlines were dramatic, to say the least.

Labour wants to kickstart the economy, and focus on prosperity.  The Act focuses on a number of changes that primarily benefit employees – although, of course, the headlines focused on how this would be at the detriment of the employers.

One of the key issues was ‘day one’ rights for employees going through unfair dismissal.  This was one of the sticking points as the Act went through parliament and royal assent, and resulted in a lot of scaremongering for employers.  Thankfully, this was rescinded before the Act became legislation.

ONCE IN A GENERATION

Heading into 2026, once-in-a-generation employment law changes are coming in – and, as an employer, you may be realising you need HR support...

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The Employment Rights Act is coming and, as an employer, you have to be up-to-date with this huge new legislation to ensure that you're on the right side of the law. However, in this blog, we will focus on the positives and the realities.

HERE’S WHAT YOU NEED TO KNOW

The UK's Employment Rights Act 2026 introduces major changes like ‘day one’ paternity / parental leave; Statutory Sick Pay (SSP) from day one; removal of the lower earnings limit; and establishes a new Fair Work Agency, all from April this year.

Later, in October this year, it brings fire-and-rehire restrictions; expanded whistleblowing protections for sexual harassment; and stronger union access rights.  Key reforms also include ending certain zero-hours contract abuses and strengthening protections against unfair dismissal, with timelines for implementation extending into 2027. 

THE TIMELINE FOR THE ERA 2026

Here’s a quick overview of the key changes coming in April 2026:

·      Fair Work Agency: a new body to enforce employment rights.

·      Statutory Sick Pay: payable from day one of employment, with the lower earnings limit removed, widening eligibility.

·      Family Leave: paternity and unpaid parental leave become day-one rights, removing service requirements.

·      Redundancy: the maximum protective award for failing to consult is doubled to 180 days' pay.

·      Trade Union Rights: the simplification of union recognition processes and electronic balloting.

The key changes coming in October 2026 are:

·      Fire-and-Rehire: new restrictions on the practice of dismissing and re-engaging employees on worse terms.

·      Whistleblowing: protection extended to disclosures about sexual harassment.

·      Union Access: employers must inform workers of union rights, and unions gain better workplace access.

·      Tribunal Time Limits: extended to six months for some claims.

From 2027 and beyond, further changes will be:

·      Zero-Hours Contracts: rights to guaranteed hours, notice, and pay for cancellations.

·      Unfair Dismissal: day-one protection against unfair dismissal (removing the two-year service rule).

·      NDAs: restrictions on non-disclosure agreements used to silence harassment victims.

·      Menopause & Gender Pay Gap: voluntary action plans become mandatory.

These reforms aim to create a ‘new deal for working people’ by improving security and conditions in the UK labour market.

Now is the time to sort this (if you haven’t already).  I have been following this situation sinceLabour came into power – the Act is something the government mentioned their ‘100-dayplan’.

A WORD FROM THE GOVERNMENT

The government’s ‘opening statement’ on the public documentation, as delivered by Angela Rayner, the Deputy Prime Minister and Jonathan Reynolds, Secretary of State for Business and Trade, is as follows:

“This Government was elected on a pledge to rebuild our economy so that it serves working people once again. That means delivering on our Plan for Change.  Thanks to our Employment Rights Act, millions of workers will benefit from greater fairness and security at work. Our reforms will also strengthen the voices of people in the workplace.

“As a result, businesses of all sizes who are already doing the right thing will no longer be undercut by those who don’t, raising the bar all round. All of which adds up to not just a new deal for working people, but also for business. We are proud of these reforms. We are proud of the opportunities they will afford working people and working families. We are proud to strengthen workers’ voices in the workplace. That is why we are so determined to implement these reforms as swiftly as possible: we are working with, not against, business to make them a success.”

The last couple of lines here are telling.  The rights are firmly in favour of the employees, but a mention of the employers is an important one, as it suggests that Labour know that, ultimately, it won’t be an all-round success – so it’s a case of appeasing businesses (which is where some of the scaremongering came from).

THE FINAL COUNTDOWN

Here's my countdown of the top ten things you should do to prepare for the changes, as soon as possible:

10) Understand the legislation:
Have a read of the main features of the Act above.

9) Understand the timeline:
As you can see, much of it will be implemented at various dates throughout 2026 and 2027. However, if you wait until the laws are in place, it'll be too late.

8) Understand the chain of command:
In your organisation, every department needs to come together to work for the collective good - managing the implications of the Act is not the sole preserve of the HR team. You should ensure that the team leaders and senior management team are appropriately trained and updated.

7) Understand your systems:
This is also where your departments need to work together, such as HR, payroll, accounts, admin, and management. Hopefully you already have the right systems in place, but they will need to be updated and streamlined to take account of the changes.

6) Understand your documentation:
Employment contracts and handbooks, as well as internal documents and procedures, will all need to be updated (as well as future-proofed).

5) Understand your recruitment process:
With more emphasis on giving employees extended rights in the early stages of employment, you have to make sure that your recruitment processes are tight and that you hire well in the first place.

4) Understand the concerns:
Engage the stakeholders, unions, and team leaders, and ensure that you have regular dialogue with them so that everyone is kept informed of your plans.

3) Understand the individuals:
You should already be treating your staff like they are your biggest asset and treating them as individuals - in terms of things like flexible working, managing personal circumstances, and making suitable changes in the workplace if required.

2) Understand other changes in legislation:
There are other major changes in legislation too, such as the rise in the National Minimum Wage. This will affect your business too.

1) Understand how the ongoing changes affect your business:
If you haven't already, I urge you to speak to your HR team as soon as possible to understand the Act, how it affects your business, and the timeline you need to adhere to.

GET IN TOUCH TODAY

The last point of the countdown is crucial.  The Act is now legislation; it is far-reaching; and the timeline is long – it is not something you’ll be able to manage in day-to-day processes just yet – you will need to not only understand the legislation but also understand how it affects your business, both now and in the future.

If you don't have any HR provision or would like to discuss your options, then please get in touch to arrange an informal chat about how me and my team can support you.

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