Charlotte McBride is a Senior Associate at specialist employment law firm, Collingwood Legal. Charlotte outlines the recent and upcoming changes to employment law arising from the Employment Rights Act 2025 and their impact on businesses.
Employment Law is set to radically alter as we move through 2026 and into 2027 as a result of the Employment Rights Bill passing into law at the end 2025.
What changes are already in effect?
From 18 February 2026, the law has already changed in respect of trade union legislation, doubling the period that an industrial action ballot is effective to 12 months and reducing the notice required from a trade union to an employer in respect of industrial action from 14 days to 10 days.
What changes are on the horizon?
Looking ahead to 6 April 2026, day-one rights to parental and paternity leave are expected to come into force. In addition, we expect statutory sick pay will become payable from day-one of a period of sickness absence (dispensing with waiting days) and the lowerearnings limit will be removed. In practice this means more employees, including lower paid employees, will be entitled to some form of sick pay and from earlier on in their sickness.
For employers facing large-scale redundancies, the protective award for failing to collectively consult is also set to double from 90 days’ gross pay per employee to 180 days’ gross pay – a significant increase in the financial penalty businesses could face.
What’s changes can we expect in the long-term?
Some of the most significant changes are expected from October 2026, including the duty for employers to take “all reasonable steps” to prevent sexual harassment in the workplace, whether from their colleagues or third parties, a reintroduction of the concept of vicarious liability. Crucially, it is also expected that from October 2026, the time limit to bring most employment tribunal claims will rise from three months to six months from dismissal or the act complained of.
Moving into 2027, arguably the most significant change the Act makes to employment law rights will take place at the beginning of the year. From 1 January 2027, employees with 6-months service will be able to bring unfair dismissal claims against their employers, having previously required 2 years continuous employment to bring such a claim. This will increase the risks of dismissing employees, compounded by the abolition of the current compensatory cap for dismissal awards which we expect to come into force at the same time. We can also expect new protections from what are widely considered “exploitative” fire and rehire practices to come into effect alongside the unfair dismissal changes.
Beyond the turn of the year, changes including the introduction of a collective redundancy threshold across whole organisations (whereby the obligation to collectively consult would apply) as well as the new regulation of zero hours and low hours contracts are expected. No date has been suggested yet for these changes.
What should employers be doing now?
The above changes are not exhaustive and the implementation dates are not set in stone, but clearly employers need to begin to identify which aspects of the Act will most impact their business so they can address business planning and operations to ensure everything is in order for the stepped-introduction of changes.
Collingwood Legal is a specialist employment law firm and we provide expert legal advice and training to organisations on all areas of employment law.
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