Employment Rights Act Watch: July 2026 edition

• 14 July 2026
• News
• Employment

Employers are facing the biggest overhaul of employment rights in a generation. Most practitioners will not have experienced this volume of changes over the course of their career, and there is pressure on HR and compliance professionals to lead the way.  This monthly update highlights the latest developments, and the practical steps employers should be taking now to prepare for the changes ahead.

As part of this monthly update, we’re excited to present our new Employment Rights Act Hub. Navigate through for an overview of key changes and access in-depth guidance on topics most relevant to you.

Where are we on implementation?

The next wave of changes is expected to come into force in October 2026. While the government previously suggested all changes in this phase would come into force on the standard 1 October implementation date, it now appears that at least some of the changes (certain changes to trade union laws) will slip to later in the month. While we await confirmation on timing, we recommend that you continue to work toward a 1 October deadline for changes to:

• Harassment protection, with an enhanced duty to prevent sexual harassment and the reintroduction of employer liability for the harassment of employees by third parties (including suppliers, clients and customers).
• New duties to consult on tips and gratuities policies (where relevant).
• Trade union laws – including changes that will affect employers outside traditionally unionised environments.
• Tribunal time limits, which will double from three to six months.

In January 2027, we expect the much-anticipated changes to the unfair dismissal regime to come into force, alongside changes affecting the practice of dismissal and re-engagement (or ‘fire and re-hire’).

What should you be focusing on?

Unfair dismissal

Moving into July, you should have new hiring and probation management procedures up and running. Your new joiners from here on in will acquire unfair dismissal rights on completing six months’ service, so it is essential that you evaluate their performance robustly from the outset and take swift action if they prove unsuitable. You should also continue to look more widely at capability and disciplinary procedures and tackle any problem cases before the end of the year. You can read more about the changes and how to prepare here and please don’t hesitate to reach out to us if you need support.

Harassment

Aside from the unfair dismissal changes, your focus over the coming months should be on upcoming changes to the harassment framework.

The existing duty to take reasonable steps to prevent sexual harassment will become a duty to take “all reasonable steps”. You can read more about what that means, the implications for your business and what you need to be doing to prepare here.

We will also see the re-emergence of employer liability for the harassment of employees by third parties. This is a significant new area of risk, and it is essential that you get your business ready – particularly if your staff are regularly in contact with clients, customers or suppliers. Read our article here to understand the risks and for practical guidance on how to prepare.

What is the very latest on the Employment Rights Act?

Employers relying heavily on casual labour, including agency workers, should be keeping a very close eye on reforms to the regulation of zero-hours or ‘low-hours’ contracts. These reforms, which are expected sometime in 2027, are going to significantly impact operations, require renegotiation of agency agreements and may even force some businesses to re-think their business model. Much of the detail remains to be confirmed. The government has now published a consultation, which fills in some of the gaps on how the new regime is likely to operate – though many questions remain. Read more on the consultation here and reach out to us if you would like to discuss the impact on your business in more detail.

Besides this significant development, the government has also published its response to the consultation on distribution of tips and a draft updated Code of Practice to reflect upcoming reforms, a consultation on the FWA’s proposed approach to holiday pay enforcement and various additional documents relating to trade union reform. We will publish further detail for you in due course.