Employment Rights Act 2025

The Act will enhance the existing duty to take “reasonable steps” to prevent sexual harassment of staff, requiring employers in future to take “all reasonable steps”. Failure to comply does not create a standalone claim, but may result in an uplift of up to 25% on compensation. The change is expected to come into force in October 2026. The government has indicated it will pass secondary legislation setting out what steps will be considered reasonable, but these regulations are subject to consultation and are not expected until 2027/2028. In any event, any guidance is likely to be high-level and to prescribe a floor, and the government has been clear that what is reasonable depends on the individual circumstances of each employer.

Actions:

• Review existing measures to prevent sexual harassment, consider what has worked and what hasn’t and update your prevention framework as necessary

From 6 April 2026, the concept of a ‘qualifying disclosure’ for the purposes of whistleblower protection has been expanded to include disclosures relating to sexual harassment. Practical impact is likely to be limited.

Actions:

• Update your whistleblowing policy to reflect the change

The Act will reintroduce employer liability for third-party harassment of employees in the course of employment, unless (mirroring the duty to prevent sexual harassment) the employer has taken “all reasonable steps” to prevent such harassment. Claims will give rise to the same remedies as ordinary harassment claims. This is a significant new source of exposure, as businesses have limited control over the actions of third parties and seeking to control third party behaviour (for example by clients or customers) can be commercially sensitive. If you operate in a sector where employees regularly interact with third parties, your business will be particularly affected. The change is expected to come into force in October 2026.

Actions:

• Carry out a risk assessment and create an action plan

Employers with 250 or more employees will be required to publish equality action plans describing steps they are taking to address their gender pay gap and support employees going through the menopause. Reporting will be voluntary from 6 April 2026, with mandatory reporting from 6 April 2027. Employers will also be required to publish information about service providers contracted for outsourced services, likely from 2027. The new transparency requirements are expected to be enforced through ‘naming and shaming’ of non-compliant employers.

Actions:

• Assess whether your organisation is affected
• Review guidance, consider what information is already published in narratives accompanying gender pay gap reports and what additional reporting may be necessary

From 6 April 2026, the maximum protective award for failure to comply with collective consultation obligations has doubled, from 90 days’ pay per affected employee to 180 days’ pay. Separately, the Act will introduce a new trigger for collective consultation, which will sit alongside the existing trigger of proposing 20 or more redundancies at one establishment. The new trigger will look at the number of redundancies proposed across establishments, in the business as a whole. The details are still to be confirmed, but we expect the new threshold will be an absolute number (rather than a percentage), and at least 250. The new trigger is expected to come into effect in 2027.

Actions:

• If you are planning a reduction in force, take advice to ensure consultation requirements are fully met in light of increased exposure
• Assess the impact on your business of a new cross-establishment threshold and, if you may be affected, consider what systems you have in place to track redundancy proposals across the business

The Act introduces new rules that will effectively rule out ‘fire and rehire’ as a viable strategy for effecting changes to pay, hours and holiday provisions. Dismissals aimed at forcing changes of terms in these areas will be automatically unfair, subject only to a narrow exemption where the employer is in severe financial difficulty. With the removal of the cap on unfair dismissal awards, this will create significant exposure. The changes are expected to take effect in January 2027.

Actions:

• Take advice if you are considering any changes to contractual terms
• Assess whether it may be worth seeking to complete any change programmes before the changes take effect – but note that ‘fire and rehire’ is high risk, even under the current regime

The Act creates the FWA, which was formally constituted on 7 April 2026 and which, going forward, will be responsible for enforcing key employment rights, including SSP, holiday pay and minimum wage. It will take over the existing enforcement functions of other bodies charged with employment law enforcement. The FWA will have broad investigative and enforcement powers and commentators have suggested this marks a fundamental cultural shift in enforcement, from reliance on individual workers enforcing their rights through Tribunal claims to more state-led enforcement. The practical impact for employers will depend on the FWA’s resourcing and on the enforcement strategy that emerges as it beds in, but large employers in particular can expect increased scrutiny particularly around minimum wage and holiday pay compliance.

Actions:

• Carry out a compliance audit in relation to key employment rights, including minimum wage and holiday pay (see also Working Time Records, above)

The time limit for bringing claims in the Employment Tribunals will increase from three months to six months. The change is expected on 1 October 2026. This may result in an increase in claims as employees will have more time to consider their position and take advice, though, on the positive side it will also a longer settlement-window. No action required.

The Act introduces restrictions on the enforcement of NDAs relating to harassment and discrimination in the workplace. These will be void, unless they meet certain conditions which the government will set out in secondary legislation. The changes are expected to come into effect in 2027, and the government has been clear that they will not apply retrospectively. Depending on where the government lands in relation to the conditions for an NDA to be enforceable, the new rules may alter the dynamics of disputes and settlement discussions involving discrimination or harassment allegations. No action required, but it is worth keeping a close watching brief on these changes.

The Act makes wide-ranging changes to industrial relations law. Key changes that will predominantly affect employers in unionised environments include:

• The repeal of minimum service levels legislation.
• A new duty to inform workers of their right to join a trade union.
• New trade union access rights.
• Changes to the statutory recognition process.
• Changes to balloting rules.
• Changes to industrial action procedures.
• Extension of union representatives’ rights to time off and facilities.
• Strengthened protections in relation to blacklisting and dismissals in connection with industrial action, and new protections against detriment in connection with industrial action.

The changes are being phased in over 2026/2027. The majority of these changes will only affect employers who recognise a union or who operate in heavily unionised sectors where significant numbers of the workforce are union members and/or a recognition request is likely. The new duty to inform workers of their right to join a trade union and new trade union access rights, which have wider relevance to private sector employers, are dealt with further below.

Actions:

• If you recognise a trade union or operate in a highly unionised sector, familiarise yourself with the detail of the changes and take advice where necessary.

From October 2026, employers will be required to give workers a statement informing them of key trade union rights, including their right to join a trade union. The details will be confirmed in secondary legislation, and the duty will be enforced in the same way as the duty to give written particulars of certain matters in or with the employment contract.

Actions:

• Keep a watching brief on the duty to inform workers of their right to join a trade union and, once we have clarity, create appropriate templates and update your processes

From October 2026, trade unions will benefit from new access rights allowing them to request physical or digital access to a workplace or workforce. Rights of access will apply to employers with 21 or more employees, and will apply even where the union has no members among an employer’s workforce – they may therefore affect employers outside traditionally unionised environments. There are strict procedural requirements (and strict timelines) to managing access requests and the CAC can step in and impose access agreements where employers and unions do not reach agreement.

Actions:

• Put appropriate mechanisms in place to ensure immediate escalation of any access request.
• Always take advice immediately if you are approached by a trade union about access (or recognition), as these processes involve fixed timetables and you may need to act quickly.
• If you think an access request is likely, familiarise yourself with the new framework and put in place an action plan for responding to an access request.