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Government Policy Reform

The latest developments, details and anticipated timings of key employment law reforms.

Significant employment law changes are coming through the Employment Rights Bill and beyond.

Explore our Reform Hub to stay ahead of the curve.

During the general election, the Labour Party promised significant reforms to employment law in its Manifesto Commitments and Plan to Make Work Pay. The Labour Party won the election and is seeking to deliver on those reforms as part of a phased plan.

Following the King’s Speech on 17 July 2024, employers eagerly awaited details of the potential reforms. The King’s Speech Briefing Notes promised two key new employment Bills in the 2024/25 Parliamentary Session:

the Employment Rights Bill; and
the draft Equality (Race and Disability) Bill.

The King’s Speech also proposed a new Bill in respect of Digital Information and Smart Data (see the Data Privacy and AI section for detail on this).

Key Developments

Employment Rights Bill

Described as phase one of the Plan to Make Work Pay, the Employment Rights Bill was published on 10 October 2024. To read an overview of our take of it in its original form, please see our article here.

The Employment Rights Bill is making its way through Parliament, with significant amendments being made along the way, and it has now doubled in size since its first iteration. For our thoughts on the Government amendments made to the Bill on 5 March 2025 please see here.

The Employment Rights Bill is anticipated to pass by Summer 2025. For many reforms, however, it simply provides the framework, with much of the detail still to be fleshed out by secondary legislation, codes of practice and guidance.

Other employment reforms beyond the Employment Rights Bill

Reforms are also underway or anticipated in addition to the Employment Rights Bill, as part of the Government’s plan:

Some reforms are being delivered via existing powers, and non-legislative routes, such as changes to minimum wage rates.
Changes in respect of pay and tax were also announced in the Autumn Budget on 30 October 2024.
Additional reforms are promised via the Equality (Race and Disability) Bill, which is still awaited. On 18 March 2025, the Government published a consultation on mandatory ethnicity and disability pay gap reporting, which will help shape this bill and has promised a separate call for evidence seeking views on making the right to make equal pay effective for ethnic minority and disabled people and other areas of equality law.
Longer-term reforms (such as to worker and employment status) are also promised but the Government recognises that these will take longer to undertake and implement.

Separately, the Data (Use and Access) Bill (‘DUA Bill’) was published on 23 October 2024, which proposes some reforms in respect of data privacy and AI that, although not necessarily linked to the Plan to Make Work Pay, may be of interest to employers. The DUA Bill is currently going through Parliament. We discuss aspects of the DUA Bill in brief in the Data Privacy and AI section. The DUA Bill, however, is not included in the Timings etc section of this reform hub.

Navigating the hub

In this hub, we keep track of all the latest developments in respect of each key employment law reforms and set out an overview of anticipated timings. We will continue to update the hub as developments come through.

Delve into the details of the key reforms by clicking on the headings to the left.

This hub is a summary only and is not legal advice, if you have any questions in respect of how the information in this hub could impact your business, please get in touch with us.

Please note that this hub does not include plans in respect of Northern Ireland, as employment law matters are devolved to Northern Ireland.

Timings

Day One Employment Rights & Unfair Dismissal

Reform Hub

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Key Developments

This reform hub covers changes anticipated both in the ERA 2025 and in the Government’s wider Plan to Make Work Pay, as explained below.

ERA 2025

Described as phase one of the Plan to Make Work Pay, the ERA 2025 completed its final stages in Parliament on 16 December 2025 and received Royal Assent on 18 December 2025.

The ERA 2025 had a long and eventful journey through Parliament and expanded significantly from the bill’s original iteration (almost doubling in size) with new reforms being added until the very end. For example, in a surprise last-minute change, the Government dropped its plan to introduce day one unfair dismissal rights, instead agreeing to reduce the current qualifying period from 2 years to 6 months and removing the compensation cap for unfair dismissal – a major change to the law that could fundamentally change how employers approach recruitment and dismissal.

Apart from some early trade union measures which came into force automatically under the ERA 2025, the majority of measures will need to be brought into force by commencement regulations. Also, for many reforms, the ERA 2025 simply provides the framework, with much of the detail still to be fleshed out by secondary legislation, codes of practice and guidance. Consultations to inform this detail are also underway with more anticipated soon. Revised impact assessments were also published on 7 January 2025.

Changes under the ERA 2025 are set to take effect in phases. The Government published an early version of a roadmap to implementation back in July 2025 (including a planned programme of consultations). This has now been superseded by an updated timeline setting out when measures will take effect. The timeline states that it focuses on the changes being introduced in 2026 and that the Government will continue to work towards the timetable set out in the roadmap for measures being introduced throughout 2027. It also notes that the timings will continue to be kept under review as the Government consultants and develops the details of policies. The Government also published a suite of simple resources on 3 February 2026 (see here).

Therefore, details of reforms and their implementation timings will become clearer (and more certain) as regulations and further guidance are published. Timings in this hub are based on the new timeline, and we will continue to monitor developments and update the hub for changes.

Other employment reforms beyond the ERA 2025

Reforms are also underway or anticipated in addition to the ERA 2025, as part of the Government’s phased plan:

Some reforms are being delivered via existing powers, and non-legislative routes, such as changes to National Minimum Wages.
Changes in respect of pay and tax were also announced in the Autumn Budgets 2024 and 2025 (see here).
Additional reforms are promised via the draft Equality (Race and Disability) Bill, which is still awaited.
Longer-term reforms (such as to worker and employment status) are also promised but the Government recognises that these will take longer to undertake and implement.

Separately, the Data (Use and Access) Act 2025 (‘DUA Act’) passed on 19 June 2025, containing reforms in respect of data privacy and AI that, although not necessarily linked to the Plan to Make Work Pay, may be of interest to employers. We discuss aspects of the DUA Act relevant to employers in brief in the Data Privacy and AI page. The DUA Act, however, is not included in the Timings etc part of this reform hub.

Timings

The Government is taking a phased approach to implementation of its Plan to Make Work Pay, which we explain in more detail below.

ERA 2025

Described as phase one of the Plan to Make Work Pay, the ERA 2025 completed its final stages in Parliament on 16 December 2025 and received Royal Assent on 18 December 2025.

Apart from some early trade union measures which came into effect automatically under the ERA 2025, the majority of measures will need to be brought into force by commencement regulations. Also, for many reforms, the ERA 2025, simply provides the framework. Much of the detail is still to be fleshed out by secondary legislation, codes of practice and guidance. Consultations to inform this detail are also underway with more anticipated soon.

Changes under the ERA 2025 are set to take effect in phases. The Government published previously a roadmap to implementation back in July 2025 (including a planned programme of consultations). This has now been superseded by an updated timeline setting out when measures will take effect. The timeline states that it focuses on the changes being introduced in 2026 and that the Government will continue to work towards the timetable set out in the roadmap for measures being introduced throughout 2027. It also notes that the timings will continue to be kept under review as the Government consultants and develops the details of policies.

Therefore, details of reforms and their implementation timings will become clearer (and more certain) as regulations and further guidance are published. Timings below and in this hub are based on the new timeline, and we will continue to monitor developments and update the hub for changes.

Reforms using existing powers or other means

Some reforms are to be delivered outside of the ERA 2025 using existing powers or other means such as amendments to National Minimum Wages. The right to switch off was also promised to be introduced via a Code of Practice. Although not formally confirmed by the Government, rumours are that this may have been dropped or pushed significantly down the Government’s agenda.

Equality (Race and Disability) Bill

Other reforms will be contained in the Equality (Race and Disability) Bill, such as extending pay gap reporting and equal pay to ethnicity and disability. The Government previously promised in its Next Steps document that this would be published in draft during the 2024/25 Parliamentary Session but this is still awaited.

On 18 March 2025, the Government published a consultation on mandatory ethnicity and disability pay gap reporting, which closed on 10 June 2025. In addition, a call for evidence, which closed on 30 June 2025, sought views on making the right to equal pay effective for ethnic minority and disabled people and other areas of equality law. Responses to this will help shape this bill.

Timings for implementation for these reforms are therefore still uncertain, but we anticipate that these reforms will be more likely to be introduced later given that there is still no timing set for introduction of the bill.

Other longer-term reforms

There will also be longer-term reforms (such as a review of worker status and the parental leave system), which the Government recognises will take longer to undertake and implement and will require a further review or call to evidence, with any changes to the law to follow. The first of these has commenced with a review of parental leave and pay and accompanying call for evidence launched on 1 July 2025. The review is set to run for 18 months after which a roadmap for implementation is promised. The review of worker and employment status was anticipated by the end of 2025 (but this is still awaited).

At a glance

We set out below a high-level overview of anticipated timings for implementation of the key reforms in the ERA 2025*. Timings are based on the Government’s updated published timeline (published on 3 February 2026), and we will continue to monitor developments and update the hub for changes.

The Government has said that for most reforms it intends to use common commencement dates of 6 April and 1 October, which is largely reflected in the updated timeline.

The timeline below also includes the longer-term reforms anticipated via the draft Equality (Race and Disability) Bill and by other means.

Please refer to the specific reform in the Reform Hub for more detail on timings for each key reform. Note also that there are some transitional provisions or complexities in certain areas as to how and when the reforms will operate which is not reflected in the below summary.

Implementation Timing	Reforms
18 December 2025	Repeal of Strikes (Minimum Service Levels) Act 2023
6 January 2026	Repeal of the Workers (Predictable Terms and Conditions) Act 2023 (never been brought into force)
18 February 2026	Trade union changes, including: – Repeal of the great majority of the Trade Union Act 2016 and including but not limited to removal of the support thresholds for industrial action ballots in important public services and simplifying industrial action notices and industrial action ballot notices – Strengthened protections against dismissal for taking industrial action – Employees that are newly eligible for ‘Day 1’ Paternity Leave and Unpaid Parental Leave can give notice (see 6 April 2026 below)
6 April 2026	– Collective redundancy protective award being doubled – ‘Day 1’ rights to paternity leave and unpaid parental leave – Whistleblowing protections (sexual harassment) – Bereaved Partner’s Paternity Leave (this is a non ‘Plan to Make Work Pay’ measure but has been added) – Statutory Sick Pay – removing the Lower Earning Limit and waiting period – Action plans on gender equality and supporting employees through the menopause on a voluntary basis (mandatory from 2027) – Menopause guidance – Simplifying trade union recognition process
7 April 2026	– Fair Work Agency body established (phased implementation likely, with details to be published in due course)
August 2026	– Electronic and workplace balloting for Statutory Trade Union Ballots
October 2026	– Employer duty to prevent sexual harassment – increasing to “all reasonable steps” – Introducing a power to enable regulations to specify steps that are to be regarded as ‘reasonable’, to determine whether an employer has taken “all reasonable steps” to prevent sexual harassment (but note 2027 below) – Introducing an obligation on employers not to permit harassment by third parties – Employment tribunal time limits increasing from 3 to 6 months (note the Government’s published timeline currently indicates this will be “no earlier than October 2026“) – Trade union changes, including: duty to inform workers of their right to join a trade union, strengthening trade unions’ right of access, unfair practices in the trade union recognition process, new rights and protections for trade union representatives, extending protections against detriments for taking industrial action (note that the relevant provisions came into force on 18 February 2026 but require regulations setting out the “prescribed detriments”, which is anticipated later following a consultation which opened in February 2026) and bringing forward regulations to establish the Fair Pay Agreement Adult Social Care Negotiating Body in England – Tightening tipping law – Procurement – two tier workforce code (public sector)
January 2027	– Reduction of unfair dismissal qualifying period to 6 months, for dismissals from 1 January 2027, and uncapping compensatory awards – Fire and rehire protections
In 2027	– Action plans on gender equality and supporting employees through the menopause (mandatory) – Enhanced dismissal protections for pregnant women and new mothers – Specifying steps that are to be regarded as “reasonable”, to determine whether an employer has taken all reasonable steps to prevent sexual harassment – Trade union changes: extending blacklisting protections and industrial relations framework – Regulation of umbrella companies – Collective redundancy – collective consultation threshold changes – Flexible working changes – Bereavement leave (including pregnancy loss) – Restrictions on the use of zero hours contracts – Electronic and workplace balloting for recognition and derecognition ballots
Other reforms in ERA 2025 but timings unknown	– Requirement to keep adequate annual leave records – Restrictions on NDAs for allegations or disclosures of relevant harassment or discrimination – Potential changes to time off for public duties (subject to a review under the ERA 2025)
Other reforms in the Plan to Make Work Pay – timing of which is unknown but given the early stages of policy development this is likely later, so 2027 and beyond	– Gender pay gaps – outsourcing measures – Wider equality law changes to be included in the draft Equality (Race & Disability) Bill, including extending pay gap reporting to ethnicity and disability, extending equal pay claims to race and disability and outsourcing of services, implementing a Regulatory Enforcement Unit for equal pay, dual discrimination and potentially pay transparency measures – Parental leave system review to complete by January 2027 with roadmap after to follow – Reviews of carer’s leave system, TUPE, worker and employment status and self-employment protections (a consultation for which was anticipated by the end of 2025 but is awaited) – Right to switch off?

*Note: this hub does not include the changes in respect of seafarers, ships’ crews, health and safety, Certification Officer levies or to children working on heritage railways under the ERA 2025 which is outside the scope of this hub. There are also other pay and tax related changes which are excluded from this timeline.

Unfair Dismissal

A key part of the Government’s Plan to Make Work Pay had included “day one” unfair dismissal rights. However, the ERA 2025 was stuck in ping-pong in its final stages of Parliament and so on 27 November 2025, in a surprise last-minute move the Government announced that it had reached an agreement with stakeholders and in order to continue to deliver on the rest of the ERA 2025 it was no longer pursuing day one unfair dismissal rights.

Following several rounds of ping pong in Parliament to reach agreement, the ERA 2025 will amend the rules on unfair dismissal so as to:

Reduce the current qualifying period for protection against ‘ordinary’ unfair dismissal from 2 years to 6 months – which, going forward will only be able to be changed by primary legislation making it more difficult for future governments to change. Relatedly, the ERA 2025 will also reduce the right to request written reasons for dismissal from 2 years to 6 months; and
Remove the cap on the compensatory award for unfair dismissal (currently the lower of 52 weeks’ pay or £118,223) entirely. Note that this does not impact the basic award, which is calculated on the basis of a statutory formula.

On the one hand, the reduction of the qualifying period, rather than its removal, is a less significant change to the law than originally anticipated as employers will have time to assess new hires before unfair dismissal rights kick in. However, the removal of the compensation cap is a surprising last-minute significant change, which will likely increase the risk and management time involved in dismissing an employee (particularly high earners). The combined changes will also have significant impacts on day-to-day HR processes including hiring, performance management and termination of employees.

Part of the debate during the bill’s passage was about the lack of impact assessment on the removal of the compensation cap, given the last-minute introduction of the amendment to Parliament. During such debates, the Government promised an impact assessment, which has now been published. The impact assessments make the following analyses in respect of the changes to unfair dismissal:

Reducing the qualifying period to six months – The economic analysis estimates that the additional population in scope for unfair dismissal protections will be 6.3 million employees, which it considers will generate an additional 9,000 Acas early conciliation referrals a year, of which 3,000 will progress to a tribunal claim, and 570 will require judicial time.
Removing the compensation cap – The analysis argues that the cost of removing the compensation cap for unfair dismissal is “likely to be limited at the aggregate”. It states that “in practice, few awards reach the cap. In 2023/24, there were 646 awards for unfair dismissal in employment tribunals reported, and the median award was £6,746. Fewer than 40 awards (around 6%) in 2023/24 for unfair dismissal were greater than £50,000.” The impact assessment, however, notes that the Government is unable to quantify the impact of removing the compensation cap on Acas and the tribunals: “the behavioural response from employers and employees of removing the compensation cap is uncertain based on the best available evidence, we were not able to quantify the impact of changes to the cap.” It does note, though, that this may impact particular groups such as high-earning employees or those with limited re-employment opportunities.

This revised Government Factsheet confirms that no further consultation will take place on these provisions. It also states that the protection against unfair dismissal only applies to employees, “although the Government intends to explore the expansion of this right to others” – which is likely part of the Government’s wider plan to look at worker and employment status.

Timing and developments

Included in the ERA 2025.
The Government has confirmed in its Factsheet and its updated timeline, that the package of unfair dismissal changes will come into force on 1 January 2027, with the intention that employees who already have six months’ service or more on or after 1 January 2027 will benefit from unfair dismissal protection.

Sources

27 November 2025 Government Announcement, ERA 2025 Impact Assessments, Unfair Dismissal Factsheet, Timeline for Implementing the Plan to Make Work Pay.

Fire & Rehire

Currently, there is not an outright ban on the practice of fire and rehire or fire and replace. However, using this method to change terms and conditions of employment is considered a last resort and is usually a higher risk strategy given the ability for employment tribunals to increase awards (such as a protective award) for an employer’s failure to comply with the Code of Practice on dismissal and re-engagement (following the Code coming into force in July 2024).

The Government stated previously that it wanted to introduce reforms to the law to abolish ‘fire and rehire’ and ‘fire and replace’. Although not quite an outright ban, the ERA 2025 inserts new provisions that significantly reduce the ability of employers to impose changes to contracts through fire and rehire or fire and replace.

Restricted variations

The ERA 2025 makes a dismissal automatically unfair if the reason or principal reason for the dismissal is:

That the employer sought to make a ‘restricted variation’ (or many variations which include a restricted variation) to an employee’s contract of employment to which the employee did not agree; or
To enable the employer to employ another person or re-engage the employee under a varied contract of employment, to carry out the same duties, or substantially the same duties carried out beforehand, and where the varied terms involve a ‘restricted variation’.

A ‘restricted variation’ includes a variation:

That reduces or removes pay entitlements, or that varies the measures that determine pay based on the work done or performance;
To terms relating to pensions or pension schemes;
To hours of work or the timing or duration of shifts; or
That reduce an employee’s entitlements to time off

The Government has powers to (i) add to this list of restricted variations and (ii) clarify what payments, expenses or other contractual benefits are not considered to be restricted variations. There is also an anti-avoidance provision, which makes the inclusion of a variation clause (or so-called flexibility clauses) that would enable the employer to make changes to any of the above restricted matters without the employee’s agreement a restricted variation.

A consultation was published on 4 February 2026 seeking views on the extent to which changes to expenses, benefits and shift patterns should be considered “restricted variations” and therefore covered by the protections. Two options have been put forward for feedback in respect of expenses and benefits in kind, but the Government’s current preferred option is that all expenses and benefits or payments in kind will be excluded from being a restricted variation.

The consultation also seeks feedback on the inclusion of changes to shift patterns as restricted variations. The Government has put forward two options for the treatment of shift patterns, but its preferred option is foreshift changes from day to night working (or vice versa), and weekday to weekend working will be restricted variations.

There is a (very) limited exception which will apply, so that the dismissal will not be automatically unfair, where employers can demonstrate that the employer was in significant financial difficulties. Basically, this is where the employer was in financial difficulties likely to affect the employer’s ability to carry on the business as a going concern and in all the circumstances the employer could not reasonably have avoided the need to make the variation or replace the employee. There are also different financial difficultly exceptions for public sector employers and local authorities.

This exception appears to be a high hurdle for an employer and although the dismissal will not be automatically unfair if the exception applies, an Employment Tribunal must still assess whether the dismissal was fair in all the circumstances. In doing so it must consider certain factors, including:

Any consultation carried out by the employer;
Anything offered to the employee in return for agreeing to the restricted variation; and
Any other matters to be set out in regulations.

These factors do not replace the usual tests for fairness of a dismissal and would generally be considered by a tribunal anyway.

We note here that the ERA 2025 will also double the maximum protective award for collective redundancy consultation from 90 to 180 days (however the Government’s earlier proposal to introduce “interim relief” was dropped) to the extent that the dismissals engage collective redundancy consultation obligations. See Redundancy Collective Consultation for more details.

Non-restricted variations

Dismissals for other types of variations which are not captured by the definition of “restricted variation” (such as mobility clauses) will not be considered automatically unfair. This would be the case where the reason or principal reason for the employee’s dismissal is:

That the employer sought to vary the employee’s contract of employment, the variation was not a ‘restricted variation’ and the employee did not agree to the variation; or
To enable the employer to employ another person or to re-engage the employee under a varied contract of employment, to carry out the same duties, or substantially the same duties carried out beforehand, and none of the amended terms involve a ‘restricted variation’.

However, employers will need to satisfy a tribunal that the dismissal was fair under ordinary principles for unfair dismissal and the ERA 2025 lists factors that tribunals must consider in assessing the fairness of such a dismissal. These include the reason for the variation, any consultation carried out by the employer, anything offered in return for the variation and any other matters in future regulations.

Replacing employees with non-employees

The ERA 2025 makes a dismissal automatically unfair if the reason or principal reason for the dismissal is to enable the employer to replace the employee with an individual who is not an employee of the employer (such as an agency worker). Broadly speaking this applies where:

The replacement individual carries out activities that are the same, or substantially the same activities as the employee, or the employee taken together with one or more other employees of the employer, carried out before being dismissed; and
The employee’s dismissal is not wholly or mainly attributable to the fact that the requirements of the employer’s business for those activities to be carried out have ceased or diminished or are expected to cease or diminish.

As for restricted variations, there is a similar significant financial difficulties exception. Again, if the exception applies although the dismissal will not be automatically unfair, an Employment Tribunal must still assess whether the dismissal was fair in all the circumstances, considering certain factors specified (including any consultation carried out by the employer and any other matters to be set out in regulations).

The net effect of all these changes will mean that fire and rehire (and fire and replace) will likely become an absolute last resort. Clearly, the policy intent behind these changes is to prevent the more extreme high-profile examples of fire and rehire practices that played out in recent years. However, these provisions will likely have unintended consequences and impact employers who may not consider themselves engaging in the types of mass fire and rehire exercises behind the policy intent.

However, the softening of the drafting during the ERA 2025’s passage in Parliament will give employers some reassurance that certain changes, such as office moves or changes to job duties will not trigger the automatically unfair dismissal protections as had originally been proposed (although will still need to be fair on ordinary principles and applying the statutory factors). However, employers will be keen to see what the Government decides to add to the list of restricted variations and what it ultimately decides following its consultation on expenses and shift patterns covered by the definition of ‘restricted variations’.

Employers may consider the use of ‘flexibility’ (or variation) clauses in template contracts where appropriate. These clauses usually reserve discretion to the employer to make changes without agreement from the employee (as agreement is essentially already baked into the contract) – but on current principles care is required to ensure they are drafted carefully and clearly and not exercised in such a way as to breach mutual trust and confidence.

Under the new rules, flexibility clauses that enable an employer to make changes to any terms relating to ‘restricted variations’ without employee agreement will be a restricted variation. As such, trying to impose such a flexibility clause without agreement would be caught by these rules and employers may face the risk of any dismissal being automatically unfair. However, this does not appear to prohibit such flexibility clauses where they are in contracts before the fire and rehire changes come into force, or where such a clause is included in the contract at the outset of employment after the provisions become law, or of course in respect of ‘unrestricted matters’ (such as duties or place of work). The consultation on changes to expenses, benefits and shift patterns also notes the Government’s intention that the new fire and rehire provisions in ERA 2025 do not affect employers’ ability to change employment conditions via means other than fire and rehire, for example through valid variation clauses or through non-contractual changes, such as changes to policies, which will not be affected.

Timing and developments

Included in the ERA 2025.

A consultation was published on 4 February 2026 (which closes on 1 April 2026) seeking views on the extent to which changes to expenses, benefits and shift patters should be considered “restricted variations” and therefore covered by the protections.

The Government has also promised to monitor the level of compliance with the current Code of Practice on dismissal and re-engagement and will update it to reflect the changes in law for fire and rehire in the ERA 2025. The Government will also issue further guidance in respect of scenarios where the collective redundancy consultation obligations are triggered.

The Government updated timeline indicates that the measures relating to fire and rehire will take effect as follows:

April 2026 – doubling the collective redundancy protection award from 90 to 180 days (see Redundancy Collective Consultation)
January 2027 – fire and rehire measures. We note that the Government’s previous roadmap had said October 2026, but this has been pushed back. The Government updated its factsheet on 3 March 2026 to note that the provisions are expected to commence on 1 January 2027, however the Government’s timeline has not been amended to reflect this detail

Sources

Consultation on 21 October 2024, Response to Consultation on Strengthening remedies against abuse of rules on collective redundancy and fire and rehire 4 March 2025, Government Factsheet on Fire and Rehire, Timeline for Implementing the Plan to Make Work Pay, Consultation on fire and rehire: changes to expenses, benefits and shift patterns.

Redundancy Collective Consultation

The Government has previously indicated that it wishes to strengthen the rules regarding the collective redundancy framework. The ERA 2025 will make two main changes to collective redundancy consultation.

Trigger for collective redundancy consultation obligations

Presently, collective redundancy consultation (and the requirement to give advance notice to the Government via a form HR1) is triggered where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.

The ERA 2025 amends this, so that collective redundancy consultation obligations will be triggered when an employer is proposing to dismiss as redundant within a period of 90 days or less either:

20 or more employees at one establishment (as is currently the case); or
A ‘threshold number of employees’ (threshold will be set out in regulations) – across the business.

We do not yet know what this new alternative threshold number of employee dismissals will be, however a consultation was launched on 26 February 2026 seeking views on possible options. This includes setting this at a specified number or a specified percentage of employees regardless of the size of the business, or a specified number or specified percentage that differs depending on the employer’s size. The consultation then explores where the organisation-wide threshold should be set. It explains that the Government’s aim is to balance the impact of the reform on smaller employers and the burden this may create, whilst also offering adequate protection for employees. The Government’s policy preference is to set the organisation-wide threshold at a fixed number across the organisation within a range of 250 to 1,000 proposed redundancies, but views are sought on where within this range the number should be set.

The ERA 2025 will also make additional changes to the current law in respect of collective redundancies to align with the above changes, including:

Ensuring the trigger to notify the Secretary of State of the proposed dismissals, via a form HR1 is aligned to the new test for collective consultation.
Clarification that the employer is not required to consult all the appropriate representatives together or undertake collective consultation with a view to reaching the same agreement with all the appropriate representatives – this is being introduced to try to alleviate concerns from employers about how to manage their collective consultation obligations with representatives when they are making unrelated redundancies across multiple sites.
Minor changes to the information requirements to be provided to employee representatives.

Employers with multiple sites will have to engage in collective consultation if they are proposing redundancies across different sites within a 90-day period under the new threshold test. Employers will therefore need a mechanism to keep track of proposed redundancies across different sites, which may be administratively burdensome and will require central or intra-site coordination. However, it seems that the Government’s preferred option is setting this threshold at quite a high level, which may only impact particularly large cross-organisation redundancy exercises.

Penalties

Following a consultation on the issue in 2024, the ERA 2025 will double the maximum protective award that an employment tribunal could make from 90 days to 180 days gross pay per affected employee. The rationale for this is to deter employers from non-compliance with the obligations and from ‘buying out’ the claims.

As part of the same consultation, the Government also confirmed in its response that it:

Is not taking forward its proposal to introduce interim relief.
Will issue further guidance for employers on collective redundancy consultation processes, in recognition of the complexity of the regime. The February consultation further promises a Code of Practice on collective redundancy obligations and that a consultation will be launched on this.
Intends to gather further views on strengthening the collective redundancy framework in 2025 (although this is still awaited). The consultation noted that the Government may consult in future on doubling the minimum consultation period when an employer is proposing to dismiss 100 or more employees from 45 to 90 days.

The increased protective awards will likely be a concern for employers, particularly given the complexity of the current regime and because this is an earlier reform in the Government’s timetable. Future Government guidance must be sufficiently detailed to address the regime’s complexities to assuage employers’ concerns that they will not be excessively penalised with increased protective awards for only inadvertent or minor breaches.

Timing and developments

Included in the ERA 2025.

Regulations will be required to determine the new threshold test for redundancies across more than one establishment.

The consultation on changes to the collective consultation threshold was launched on 26 February 2026 and closes on 21 May 2026. The Government also intends to produce a Code of Practice on collective redundancy obligations which they plan to consult on in 2026.

The Government’s updated timeline indicates that the measures relating to collective redundancy consultation will take effect as follows:

6 April 2026 – doubling the collective redundancy protection award from 90 to 180 days. Note that the recently published Government Guidance for Businesses says that this will apply to “dismissals which happen on or after 6 April”. If this is reflected in the commencement regulations, this will affect collective redundancy proposals underway prior to this date.
In 2027 (although a specific date is not provided) – collective redundancy consultation threshold.

Sources

Consultation on 21 October 2024, Response to this consultation on 4 March 2025, Government Factsheet: Collective Redundancy, Government Guidance for Businesses, Timeline for Implementing the Plan to Make Work Pay, Consultation on threshold for triggering collective redundancy obligations.

Collective Bargaining & Trade Unions

The Government wants to modernise trade union laws and strengthen collective voices at work, creating a new era of partnership between businesses and unions. It believes that the changes it proposes “will lead to increased trade union membership and, ultimately, a more level playing field for workers.”

The ERA 2025 aims to significantly strengthen the power and access of trade unions, introducing new measures and repealing some existing restrictions. Much of the detail will be subject to consultation (some of which is now underway) and further regulations.

We don’t cover all the changes, but key reforms are set out below.

Employers will have a legal duty to give workers a written statement that informs the worker they have the right to join a trade union.

This statement should be given at the same time as they receive a section 1 statement of terms and conditions of employment, and at other prescribed times. Penalties for failure to provide a written statement will mirror the penalties for failure to provide a section 1 statement of particulars. Further details will be set out in regulations, the details of which will be informed by the outcome of the consultation launched on 23 October 2025. The consultation seeks views on different options on the form and content of the statement, the manner in which it should be delivered for new or existing workers and the frequency with which it should be reissued. It is clear that the intention is for this to be more than just a “one line” statement of a right to join a union.

This reform could (and is intended by the Government to) lead to an increase in workers’ awareness of trade unions. This may in turn result in an increase in the level of union membership (particularly when coupled with the new union access rights below).

Timing and developments

Included in the ERA 2025.

Regulations will be required to determine the precise details of this new duty including the form, content and manner of delivery of the statement. A consultation was launched on 23 October 2025 (which closed on 18 December 2025) which will inform the content of these regulations and how this new duty will operate in practice.

The Government’ roadmap’s updated timeline indicates that these measures will take effect in October 2026.

Independent trade unions have new broad rights to request access

The ERA 2025 introduces a significant new statutory right for trade unions to request access to workplaces. The details of how this will operate will be set out in secondary legislation following consideration of the consultation (now closed) was launched on 23 October 2025. The new right of access is summarised below:

Right of access will be for ‘access purposes‘, namely to (1) meet, support, represent, recruit or organise workers (whether or not they are members of a trade union); (2) facilitate collective bargaining (but this does not include organising industrial action).
‘Access‘ means (1) physical entry into a workplace (although not to any part used as a dwelling) and/or (2) communication with, including providing information to, workers by any means whether directly or indirectly (for example via digital means). This is broad and could require an employer to provide information to their workers on behalf of officials of a union within an all-staff email.
The ERA 2025 sets out a detailed statutory process by which unions can enter into access agreements with employers for the access purposes. A trade union can make a request for access (for one or more occasions) and the employer must respond either accepting or refusing the request. If an employer refuses, there is a period of negotiation for the two parties to agree and then where agreement is not possible (or the employer doesn’t respond), either party will be able to apply to the Central Arbitration Committee (‘CAC’) for a determination as to access. How this process will operate in practice (including the timings for the various response and negotiation periods) is subject to the consultation (although a potential exemption for employers with fewer than 21 workers is one of the options proposed).

The CAC also has powers to enforce access agreements, and details will be set out in regulations. The 23 October consultation proposes that CAC fines for non-compliance could be either up to a maximum of £75,000, or alternatively a two-stage maximum with a standard cap of £75,000 and a higher maximum of £150,000 for repeated breaches, in addition to certain factors to take into account when determining quantum.

This is a significant change, which may lead to an increase in workers’ awareness of trade unions and to an increase in the level of union membership. We may also see more pro-active steps being taken by trade unions, particularly to enter sectors where they have not traditionally had a presence – which could now be done more easily through the means of new digital access request rights which could (under the consultation proposals) be extensive. Employers who may not have previously had to engage with unions may have to start doing so.

Timing and developments

Included in the ERA 2025.

Regulations will be required to determine the details of how this will operate in practice. A consultation launched on 23 October 2025 (which closed on 18 December 2025) will inform the content of these regulations. The Government has confirmed it will also consult on a new statutory code of practice on trade union rights of access to set out best practice and include practical guidance on how access should be carried out by both trade unions and employers.

The Government’ roadmap’s updated timeline indicates that these measures will take effect in October 2026.

Reforms to statutory recognition processes

The ERA 2025 will make changes to the statutory union recognition process – with the aim of simplification. Key changes include:

Introducing a power for the Secretary of State to lower the threshold for the CAC to accept a trade union recognition application from 10% of the workers in a bargaining unit to between 2% and 10% – the Government has promised that this will be subject to further consultation.
Repealing the requirement for unions to show at the outset of submitting a statutory recognition application to the CAC that a majority of workers in the bargaining unit are likely to support recognition.
Removing the requirement for at least 40% of workers in the bargaining unit to have to vote for recognition at the ballot stage – only a simple majority of the workers voting will be required.
Preventing recognition of a non-independent union, in response to a written request for voluntary recognition from an independent union, from blocking the independent union’s subsequent recognition application
Strengthening the ‘unfair practices’ regime, including extending the prohibition on unfair practices so that it applies during the entire trade union recognition process from as soon as the CAC accepts the union’s application for statutory recognition and preventing recruitment into a bargaining unit during the recognition process for the purposes of dilution

The process for statutory recognition is complex, and these reforms aim to simplify some of the processes and will likely make it easier for unions to gain recognition. The changes and the process could lead to an increase in the level of union membership (particularly when coupled with the new union access rights discussed above).

Timing and developments

Included in the ERA 2025.

The Government on 4 February 2026 launched consultation (which closes on 1 April 2026) on the revised code of practice during recognition and derecognition processes and on proposals on unfair practices in electronic ballots.

The Government’s updated timeline indicates that measures:

To simplify trade union recognition processes will take effect on 6 April 2026. The Government’s Business Guidance specifies this as removing the 40% threshold, removal of the likely majority test when a union submits a recognition application and preventing recognition of a non-independent union, in response to a written request for voluntary recognition from an independent union, from blocking the independent union’s subsequent recognition application; and
In respect of unfair practices in the trade union recognition process will take effect in October 2026.

Changes to industrial action ballots and other reforms

The ERA 2025 makes several changes, including:

Repealing the Strikes (Minimum Service Levels) Act 2023 (this took effect on 18 December 2025).

Repealing or amending much of the Trade Union Act 2016 largely in respect of industrial action. Key reforms include:

Removing certain restrictions to pave the way for e-balloting. A consultation was launched on 19 November 2025 on a draft code of practice on electronic and workplace balloting. A further consultation was launched on 4 February 2026, which also deals with proposed changes to unfair practices to facilitate the use of electronic balloting methods for recognition and derecognition ballots.
Reducing and simplifying the current threshold requirements for a trade union ballot to take industrial action so it is easier to ballot. This includes removing: (1) the 50% turnout threshold required in a ballot for industrial action for all sectors; and (2) the additional 40% support threshold requirement in respect of workers engaged in important public services. The proposal to repeal the 50% turnout threshold is being delayed to align with the development of e-balloting and will require separate implementing regulations.
Removing certain requirements regarding the provision of information to be included on ballot notices and industrial action notices.
Reducing the notice period that a trade union must give the employer prior to industrial action from 14 to 10 days.
Extending the time period for which an industrial action ballot has effect to from 6 to 12 months.
Removing requirements in relation to union supervision of picketing for such industrial action to be protected. The Government published a revised draft revised code of practice on picketing on 9 January 2026 to time with this change.

This will largely impact employers whose workforce currently recognises a union. The threshold reductions and simplification of processes may make it easier to undertake industrial action.

Timing and developments

Included in the ERA 2025.

The Strikes (Minimum Service Levels) Act 2023 was repealed on 18 December 2025.
Industrial action: Changes to industrial action came into effect on 18 February 2026. There are transitional and savings provisions in place following publication of commencement provisions (see Guidance on Trade Union Law published 8 January 2026). On 9 January 2026, the Government published a revised draft revised code of practice on picketing and a revised draft code of practice on industrial action ballots and notice to employers to time with these changes.
E-balloting: The proposal to repeal the 50% turnout threshold is being delayed to align with the development of e-balloting and will require separate implementing regulations. The Government’s updated timeline indicates that measures relating to electronic and workplace balloting for Statutory Trade Union Ballots will take effect in August 2026 and that electronic and workplace balloting for recognition and derecognition ballots will take effect in 2027.

New trade union rights and protections

The ERA 2025 introduces new rights and protections for trade union representatives and members. These include:

Creating new rights of access to facilities and strengthening existing rights to time off for trade union representatives and trade union learning representatives, as well as new rights to paid time off and access to facilities for trade union equality representatives. A revised draft Code of Practice on time off for trade union duties and activities (currently subject to a consultation) has been published by Acas.
Strengthening the rules on blacklisting by amending and extending the Government power to introduce regulations on blacklisting.
Introducing enhanced protections for workers against detriment for taking protected industrial action. A consultation was launched on 26 February 2026 on what should be the prohibited detriments to be set out in regulations. The Government’s current preference is to prohibit all detriments for the sole or main purpose of penalising, preventing or deterring a worker from taking industrial action. The consultation also indicates that such detriment claims will be brought within scope of a potential ACAS uplift for failure to comply with the ACAS Code on Disciplinary and Grievance Procedures.
Simplifying and strengthening unfair dismissal protection for employees who undertake protected industrial action, for example so that the protection against dismissal will apply for the length of the strike action by removing the requirement for the dismissal to be within the ‘protected period’.

Employers who are unionised will need to be informed of the new rights and protections to ensure that union representatives and members are afforded their rights properly.

Timing and developments

Included in the ERA 2025.

Enhanced dismissal protections for taking industrial action – commencement regulations brought this into force on 18 February 2026 (subject to transitional and savings provisions – see guidance).
Enhanced protections against detriment – the provisions in the ERA 2025 came into force on 18 February 2026 but will require further regulations setting out the ‘detriments of a prescribed description’. A consultation was launched on 26 February 2026 (closes 23 April 2026) to consider what detriments should be prohibited under these regulations. The Government’s updated timeline indicates that enhanced protections against detriment for taking protected industrial action will substantially come into effect in October 2026.
Blacklisting – the ERA 2025 brings into force the regulating making power for blacklisting, but the revised Government Factsheet indicates that the Government will consult on the regulations setting out the detail for blacklisting in Spring 2026. The Government’s updated timeline indicates that measures will come into effect in 2027.
Access to facilities and rights for trade union equality representatives – A consultation on a draft Acas Code of Practice on time off for trade union duties and activities was published on 20 January 2026 and will be concluding on 17 March 2026. We expect this Code to provide guidance for employers on how to interpret and comply with these new rights and protections and to encourage employers to engage in good industrial relations. The Government’s updated timeline also indicates that the new rights and protections for trade union representatives will come into effect in October 2026.

Other changes

In addition, there are other changes under the ERA 2025 and beyond which are outside the scope of this hub. These are noted briefly below.

The Government’ roadmap’s updated timeline still indicates that the Government plans to introduce changes to the industrial relations framework in 2027 – but details on this are awaited.
Sector specific reforms are being introduced under the ERA 2025 including:
- Implementing (by way of regulations) new social care negotiating bodies, including the Adult Social Care Negotiating Body for England, which will be able to consider remuneration, terms and conditions of employment of social care workers and other matters in respect of the adult social care workers.
- Reinstating the School Support Staff Negotiating Body, to establish national terms and conditions, career progression routes, and pay rates.
Also, previously, the Government said it wants to ensure ‘at a minimum’ that any proposals to introduce surveillance technologies in the workplace are subject to consultation and negotiation, with a view to agreement of trade unions or staff representatives. The Next Steps document has promised as part of the Government’s longer-term reform plan to consult on surveillance technologies and negotiations with trade unions and staff representatives. This is not dealt with under the ERA 2025.

Sources

Consultation on 21 October 2024, Response to consultation on creating a modern framework for industrial relations 4 March 2025, Consultation on fair pay agreement process in adult social care, Consultation on right of trade unions to access workplaces, Consultation on duty to inform workers of right to join a union, Government Factsheet – trade unions, Government Factsheet – School support staff negotiating body, Government Factsheet – social care negotiating bodies and fair pay, Picketing: draft revised code of practice, Draft code of practice on industrial action ballots and notice to employers, Consultation on recognition code of practice and e-balloting unfair practices, Timeline for Implementing the Plan to Make Work Pay, Consultation on Protection from Detriments for Taking Industrial Action.

NDAs, Whistleblowing, Discrimination & Harassment

Whistleblowing

The Government previously promised to strengthen protection for whistleblowers, “including by updating protection for women who report sexual harassment at work.”

The ERA 2025 amends the list of disclosures qualifying for protection under whistleblowing laws to explicitly include sexual harassment. Workers who make a disclosure of information about sexual harassment that has occurred, is occurring, or is likely to occur will now be explicitly covered by whistleblowing protections (such as protections from detriment or dismissal), if they have a reasonable belief that their disclosure is in the public interest.

Currently, there are already protections against victimisation at work for raising a complaint of sexual harassment under the Equality Act 2010, and sexual harassment disclosures may also qualify for protection under current whistleblowing laws (if for example a criminal offence). However, the fact that this is included explicitly may raise awareness of this.

The change also explicitly means that NDAs will not be able to prevent such protected disclosures from being made, something which has been a hot topic in the press for some time. Note that this is separate from and in addition to the measures introduced under the Victims and Prisoners Act 2024 from 1 October 2025 (see our article here).

Timing and developments

Included in the ERA 2025.

The Government’s updated timeline indicates that whistleblowing measures will take effect on 6 April 2026.

NDA restrictions

The ERA 2025 will make any provision in an agreement between an employer and a worker void in so far as it purports to prevent the worker from making an allegation or a disclosure of information relating to relevant harassment or discrimination. The Government impact assessment, published on 17 July 2025, emphasised that this would only void the part of a contractual provision that seeks to prevent such allegations or disclosure related to harassment or discrimination; the rest of a provision would stand.

Key points are:

These provisions apply in respect of confidentiality clauses which purport to prevent an employee making an allegation or disclosure of information relating to (i) relevant harassment or discrimination by a worker or (ii) an employer’s response to either the relevant harassment/ discrimination itself or to the making of an allegation/ disclosure of information relating to the relevant harassment/ discrimination.
‘Harassment or discrimination’ for these purposes is limited to harassment and discrimination under the Equality Act 2010. It will be “relevant harassment or discrimination” if (i) it consists (or is alleged to consist) of conduct by the worker’s employer or another worker of that employer; or (ii) the person alleged to be the victim of the harassment or discrimination is a worker of the employer. This may potentially cover third-party harassment claims and victimisation claims.
The prohibition applies to any agreement between an employer and a worker of the employer, and so would, as currently drafted, include both employment contracts and settlement agreements.
Certain powers are reserved to the Government to make regulations to:
- Except certain agreements so that the ban would not apply – the Government impact assessment, published on 17 July 2025, indicates that regulations “are expected to set strict conditions for NDAs to be validly made (eg. if a worker requests one);” and
- Extend the remit of the prohibition to cover others who are not workers, such as those in work-experience or training or contractors.

This is a significant change, that will likely have an effect on how settlement agreements are used in respect of claims of discrimination or harassment. Employers will be waiting to see what exceptions will be carved out by regulations. See our article here for further thoughts on this topic.

Timing and developments

Included in the ERA 2025.

The NDA measures introduced on 7 July 2025 were announced after the Government’s original roadmap was published and are still not included in the Government’s updated timeline. Timing for implementation is therefore still unknown. However, comments during debates by Peter Kyle MP indicate that the Government would be “moving as fast as possible to consult on the related secondary legislation and commence the measure.” The Government Factsheet confirms a Government consultation is anticipated and a commencement date will be announced in due course.

Third party harassment

The ERA 2025 (re)-introduces employer liability for third party harassment relating to all the protected characteristics covered by harassment under the Equality Act 2010 (i.e. age, disability, gender reassignment, race, religion or belief, sex and sexual orientation) as well as sexual harassment and less favourable treatment because the individual has either submitted to or rejected sexual harassment or harassment related to sex or gender reassignment. Employers will be liable if a third party harasses an ’employee’ (a broader definition under the Equality Act 2010 including employees, workers and apprentices) in the course of their employment and the employer failed to take all reasonable steps to prevent the third party from doing so.

Under these provisions, liability can arise for a single act of third party harassment – unlike the previous third party harassment provisions in the Equality Act 2010 that were repealed in 2013, which provided that employers were not liable for third party harassment unless there had been at least two other incidents of harassment by a third party.

Notably, provisions seeking to introduce third party harassment were previously dropped during the passing of the Worker Protection (Amendment of Equality Act 2010) 2023 (the ‘Worker Protection Act’) under the previous Conservative Government given some of the practical difficulties that this could have for employers.

This is a significant change. This will likely have a greater impact on employers operating in sectors where workers frequently come into contact with third parties where there is often no relationship with such third parties (such as customers in a shop). However, most workplaces will involve some interaction with third parties and will be impacted. Employers should consider undertaking risk assessments to identify areas of risk of third party harassment to identify what steps can be taken to prevent those risks.

Timing and developments

Included in the ERA 2025.

The Government’s updated timeline indicates that third party harassment measures will take effect in October 2026.

Sexual harassment

The Worker Protection Act, which came into force on 26 October 2024, introduced a legal duty on employers to take reasonable steps to prevent sexual harassment of employees (under the broader Equality Act 2010 definition) in the course of their employment. The ERA 2025 will increase this new obligation so that employers must take “all reasonable steps” to prevent sexual harassment.

What will entail “all reasonable steps” awaits to be seen. The Government’s Factsheet explains that the Government considers it states that they believe it is important that the threshold in the preventative duty is consistent with the existing “all reasonable steps defence” for employers to avoid vicarious liability. This is a high hurdle, as an employer will not be considered to have taken all reasonable steps if there are any further steps that they could reasonably have taken.

However, the ERA 2025 includes new powers for regulations to be made to specify what steps are to be regarded as “reasonable” (although currently it appears that these may come into effect after the new enhanced duty will). A call for evidence launched on 7 April 2025 (now closed), asked for evidence of effective steps employers can take to reduce and/or prevent sexual harassment to feed into these regulations. Central regulations on steps may help employers have a better understanding of what will be required to satisfy this higher duty, although the Government’s Factsheet does emphasise that employers will be required to take the relevant steps set out in the regulations, as well as other preventative steps that it is reasonable for them to take in the particular circumstances.

In addition, the call for evidence looked at extending legal protection from sexual harassment to volunteers, which are not currently covered by such protections in the Equality Act 2010.

This extends the current preventative duty even further and so will likely be harder for employers to demonstrate that all reasonable steps have been taken to prevent sexual harassment. Risk assessments and steps plans should be revised for this enhanced right.

Timing and developments

Included in the ERA 2025.

The Government’s updated timeline indicates that the requirement for employers to take “all reasonable steps” to prevent sexual harassment will come into effect in October 2026, along with a power to enable regulations to specify steps that are to be regarded as “reasonable”. However, the updated timeline also says that the specific steps that are to be regarded as “reasonable”, to determine whether an employer has taken all reasonable steps to prevent sexual harassment, will not come into effect until 2027 (which is after the enhanced duty is anticipated to come into force). The Government’s Factsheet had also previously indicated that expected commencement for the regulations defining “reasonable steps” would be 2027/2028 (after consultation), so the timing is not entirely clear.

Public sector socio-economic duty and dual discrimination

The Government has said previously it would bring into force certain provisions in the Equality Act 2010. A call for evidence launched (now closed) confirms that the Government is committed to bringing into force the following:

Protections against dual discrimination, i.e. where discrimination is because of a combination of two relevant protected characteristics, in section 14 of the Equality Act 2010 (which has never been brought into force since the Equality Act 2010 became law).

Public sector socio-economic duty in section 1 of the Equality Act 2010 in England (it is currently in effect in Scotland and Wales and some councils in England have voluntarily adopted it). This requires specified public authorities when making decisions of a strategic nature about how to exercise its functions, to have due regard to the desirability of exercising them in a way that is designed to reduce the inequalities of outcome which result from socio-economic disadvantage.

The protections against dual discrimination, if introduced, may make existing discrimination laws more complex for employers to navigate. The public sector socio-economic duty will affect specified public authorities.

Timing and developments

Not in the ERA 2025.

The public sector socio-economic duty and dual discrimination measures are subject to a call for evidence (now closed) and a response is awaited. As these are essentially lying dormant on existing statute books, these could be enacted easily. Timings are currently unknown.

Sources

Call for evidence 7 April 2025, 7 July 2025 amendments, Government Factsheet on NDAs, Government Factsheet on preventing workplace sexual harassment, Government factsheet on strengthening protections for whistleblowers, Government Guidance for Businesses on Whistleblowing Protections for Sexual Harassment , Timeline for Implementing the Plan to Make Work Pay.

Enforcement

Single Enforcement Body and Enforcement Powers

Currently, most employment rights are enforced by the individual through an employment tribunal and only a limited number of (mainly pay-related) rights are enforced by the state on behalf of workers.

The Government promised to establish a new single enforcement body (or ‘Fair Work Agency’) intended to improve and expand the system of enforcement of employment rights.

The ERA 2025 does this by giving the Secretary of State certain new powers to enforce employment rights and the ability to delegate most of those powers to a public authority and to appoint enforcement officers. This will called be the new Fair Work Agency which will be established as an executive agency of the Department for Business and Trade.

The Fair Work Agency will combine and take over existing enforcement functions such as the Gangmasters and Labour Abuse Authority and the Director of Labour Market Enforcement (which will both be abolished) and other certain enforcement functions including those of HMRC (who currently enforce National Minimum Wage). Significantly, the ERA 2025 also introduces new enforcement powers and functions, which are explained in more detail below.

What laws will the Fair Work Agency enforce?

The ERA 2025 sets out that the Fair Work Agency will enforce certain ‘relevant labour market legislation’ listed in a Schedule to the ERA 2025. Notably for employers this includes:

Current enforcement areas carried out by different agencies, including National Minimum Wage and statutory sick pay; employment agencies and employment businesses; the unpaid employment tribunal award penalty scheme; labour exploitation (gang masters) and modern slavery; and
New areas of enforcement including the enforcement of holiday pay and annual leave, the new obligation to keep records for annual leave (see the Annual Leave Records section) and certain offences of fraud under the Fraud Act 2006 when committed in relation to a worker or work-seeker.

The ERA 2025 also gives powers for the current scheduled list of relevant labour market legislation to be expanded in the future and the Government fact sheet indicates that the Fair Work Agency will take on enforcement of a wider range of rights over time.

What powers will the Fair Work Agency have?

The ERA 2025 includes detailed provisions setting out the enforcement powers, including:

General Powers: The Fair Work Agency will be able to require any individual to attend meetings and answer questions or provide documents or information if it believes that the person is able to provide information necessary for any enforcement purpose. Enforcement officers will have the power to enter premises (including dwellings subject to a warrant) to exercise certain powers including to inspect documents, and to access computers.
Issue enforcement undertakings and apply for orders: The Fair Work Agency will have the power to request labour market enforcement (‘LME‘) undertakings and further to apply to the court for LME orders to ensure compliance with prohibitions, restrictions and requirements. Non-compliance with an LME order, or providing false information or obstructions, is a criminal offence (which can on lead to imprisonment, a fine or both).
Issue notices of underpayment: The Fair Work Agency will have the power to issue notices of underpayment (in a similar way to the existing enforcement regime for the National Minimum Wage). The Fair Work Agency will be able to issue an underpayment notice to remedy a failure to pay certain payments under relevant labour market enforcement legislation (which we explain above) which includes National Minimum Wage, Statutory Sick Pay and, most notably, holiday pay). The notice will specify the amount that will be payable by the liable party to the individual(s) within 28 days of the notice. In addition to the sums due, the notice of underpayment must also impose a penalty, to go into the Government’s Consolidated Fund, of 200% of the sum payable in the notice (up to a maximum of £20,000 per individual). This new power could have potentially significant implications for employers who have miscalculated holiday pay or have misclassified workers/employees as self-employed contractors and so have failed to pay holiday pay correctly or at all.
Bring proceedings in the employment tribunal on a worker’s behalf: Where a worker has the right to bring employment tribunal proceedings in England and Wales, or Scotland, and it appears to the Fair Work Agency that a worker is not going to bring those proceedings then the Fair Work Agency may bring proceedings in place of the worker. Notably, it seems that this power extends to any employment tribunal proceedings and not just proceedings in respect of the more limited relevant labour market legislation set out above.
Provide or arrange for legal advice, legal representation, or assistance: Although, the ERA 2025 indicates that this will not be an enforcement function to be given or delegated to the Fair Work Agency, the ERA 2025 also introduces powers for the Secretary of State to provide or arrange for legal advice, legal representation, or other form of assistance to someone party to any civil proceedings that are related to “employment or trade union law or the law of labour relations.”
Recover the costs incurred by the Fair Work Agency: New provisions (subject to details in regulations) will require a person to pay a charge as a means of recovering enforcement costs incurred in connection with the exercise of any enforcement function.
Enforce a new requirement for employers to keep records: This will be to demonstrate their compliance with rules on annual leave and pay (see the Annual Leave Records section).

The Next Steps document suggests that the Fair Work Agency will also be a ‘one stop shop’ for help and resource for employers to help provide clarity on employment rights.

The ERA 2025 sets some of the framework of this new enforcement agency and requires the set-up of an Advisory Board to provide enforcement function advice, with membership made up of persons representing trade unions, employers and independent experts. The Secretary of State will be required to consult the Advisory Board in its preparation and publication of its three-yearly labour market enforcement strategy and its annual reporting requirements.

The creation of significant new state powers to be carried out by a single enforcement body may move the dial from an emphasis on the enforcement of individual workers’ rights to proactive state enforcement of certain fundamental rights on behalf of workers. For example, existing non-compliance risks in respect of holiday pay are likely to be magnified as the new agency could proactively investigate and enforce (for example using its powers to issue notices of underpayment or by bringing proceedings) such rights to holiday pay without the need for an individual worker to bring a claim.

On the flip side, having a ‘one stop shop’ for employment guidance and support could help an already fragmented and complicated system where employers must go to multiple agencies for assistance.

Regardless, the effectiveness of the Fair Work Agency will largely depend on how it is resourced – although the recent additions enabling the recouping of enforcement costs from liable parties may help with its ongoing funding. It has been announced that Matthew Taylor has been appointed as chair.

Timing and developments

Included in the ERA 2025.

The Government’s updated timeline indicates that the Fair Work Agency will be established on 7 April 2026 and the Government Factsheet states that implementation will follow in phases, with further details expected to be published in due course.

In respect of holiday pay, the Government’s Guidance for Businesses currently states that the Fair Work Agency will take on enforcement of additional rights such as holiday pay “over time”, so it is currently unclear when these enforcement powers will come into force.

Commencement regulations have been made to bring into force on 6 January 2026 the Government powers to make regulations or directions related to labour market enforcement and to bring into force provisions dealing with some of aspects to help establish the Fair Work Agency.

Regulatory Enforcement Unit for Equal Pay

The Next Steps document indicates that the Government will implement an Equal Pay Regulatory and Enforcement Unit, which will be detailed in the Equality (Race and Disability) Bill. A call for evidence launched on 7 April 2025, states that the Government is considering carefully how enforcement of the equal pay scheme could be improved, including through the establishment of the Equal Pay Regulatory and Enforcement Unit with the involvement of trade unions. It is considering the best ‘home’ for the unit, as well as its functions. We wait to see the outcome of the call for evidence.

The impact of this will depend on whether the Government decides to set up such unit and, if so, what will be the extent and remit of such unit (including how this will interact with the Fair Work Agency).

Timing and developments

Not included in the ERA 2025 and will instead likely be included in the Equality (Race and Disability) Bill following closure of the call for evidence. Timing for implementation is currently unknown.

Employment Tribunal

Tribunal reform:

The Employment Tribunal remains the primary way for individuals to enforce individual employment rights for complex cases or contract disputes. The Plan to Make Work Pay suggested that the Government will work further to digitise the employment tribunal process but it has not suggested that it will increase investment in the tribunal system, which gives rise to a concern that the expansion of employment rights will slow down the tribunal process significantly and add to the backlogs, causing more delays in dealing with claims. Indeed, concerns have been raised throughout the bill’s passage about delays and under-resourcing of the tribunal system and whether reforms under the ERA 2025 will simply magnify this.

Reforms here are not set out in the ERA 2025 but have been discussed throughout the passage of the ERA 2025 and the Government indicated that it is intending to look at making improvements to Employment Tribunals and to Acas during the final debates on the bill. How the Government plans to make improvement to tribunals and Acas await to be seen.

Time limits:

Currently, the time limits for filing most Employment Tribunal claims are three months, save for some claims such as equal pay, which have a six-month period to bring a claim. The ERA 2025, amends the time limit for all types of employment tribunal claims in Great Britain from three to six months – which is not an insignificant change for employers (and employees) alike. Whether or not this will lead to an increase in the number of claims being brought as employees who were previously timed-out will have longer to bring a claim, or a decrease as it gives employers and employees longer to settle any issues, waits to be seen.

Fair Work Agency:

In addition, there is now a new power for the Fair Work Agency to step into the shoes of a worker and bring proceedings on the worker’s behalf (see the ‘Single Enforcement Body’ subsection above).

Timing and developments

Changes to time-limits are in the ERA 2025.

The Government’s updated timeline indicates that this measure will take effect no earlier than October 2026.

Details of reforms to the tribunal system and timings for implementation are unknown.

Collective Grievances and Compensation Caps

The Government has previously proposed to make it easier for workers to raise workplace grievances by enabling employees to “collectively raise grievances” about conduct in their place of work to Acas. This reform is now part of the Government’s longer-term plans to consult with Acas on enabling employees to collectively raise grievances about conduct in their place of work.

Depending on the nature of any change, this could be significant as grievances currently are managed on an individual basis between employer and employee.

In the original New Deal (the iteration before the Plan to Make Work Pay), Labour mentioned removing the caps on compensation that workers receive. The ERA 2025 and recent publications had been silent on this. Despite this the Government made a last minute change to the ERA 2025 which will remove the cap on compensation for unfair dismissal (see Unfair Dismissal for more information).

In addition, the maximum protective award for failure to collectively consult will be doubled to 180 days (see sections on Fire and Rehire and Redundancy Collective Consultation).

Timing and developments

Collective grievances

Not included in ERA 2025.

This reform will be part of the Government’s longer-term plan – as the Government recognises that it will take longer to consider how to make changes and implement them. The Government has committed to consulting with Acas.

Await developments.

Compensation caps

The removal of the compensation cap for unfair dismissal is in the ERA 2025. The Government Factsheet and the updated timeline indicated this measure will take effect on 1 January 2027.

The increase to the maximum protective award if an employer is found to not have properly followed the collective redundancy process is also in the ERA 2025. This change will take effect on 6 April 2026 (see Fire and Rehire and Redundancy Collective Consultation).

Sources

Consultation on 21 October 2024, Response to this consultation on 4 March 2025, Fact sheet on the Fair Work Agency, Call for evidence 7 April 2025, Government Guidance for Businesses on the Fair Work Agency , Timeline for Implementing the Plan to Make Work Pay.

Statutory Sick Pay

In respect of Statutory Sick Pay (‘SSP‘), the ERA 2025 will:

Makes SSP available from day one of absence, removing the three “waiting days” before it becomes payable (as is currently the case);
Removes the lower earnings limit on eligibility (currently average pre-tax earnings of £125 per week); and
Set the rate of SSP payable to employees at the lower of: (i) 80% of the average weekly earnings; and (ii) the current weekly rate of SSP (currently £118.75, but reviewed annually).

These changes will mean that low earners will become entitled to receive 80% of average weekly pay, where under the current law they are not entitled to SSP, and that SSP will be available for all employees from day one of sickness absence.

Timing and developments

Included in the ERA 2025.

The Government’s updated timeline indicates that this measure will take effect on 6 April 2026.

Sources

SSP Consultation on 21 October 2024, Response to SSP consultation 4 March 2025, Government Factsheet on SSP, Timeline for Implementing the Plan to Make Work Pay , Government Guidance for Businesses on Statutory Sick Pay Changes.

Zero-hour Contracts

The ERA 2025 does not ban zero-hour contracts outright but includes several measures which will significantly inhibit their use. The ERA 2025 contains detailed and very complex provisions on these rights, which are summarised below.

Guaranteed hours offers

The ERA 2025 will require employers to make a ‘guaranteed hours offer’ that reflects the hours ‘qualifying workers’ regularly work over a ‘reference period’. Individuals can reject an offer of guaranteed hours if they wish.

For now, much of the detail of how this will operate is left to further regulations, but what we know so far is:

To whom it will apply: A ‘qualifying worker’ includes zero-hour workers and certain ‘low hours’ workers who have a low number of guaranteed hours. What is considered ‘low hours’ will be set in regulations. Where this threshold falls will have a big impact on how significant this new right will be.
When to make a guaranteed hours offer: An employer must make a guaranteed hours offer to a worker if in relation to an ‘initial reference period’ the hours worked during such period satisfy certain conditions (such as to their number or regularity) and for low hours workers, the hours worked exceed the minimum number of hours under the contract. The detail will be set in regulations including
- The length of the initial reference period, although the Government indicates this will be 12 weeks;
- The conditions that would trigger the obligation to make an offer (such as the number or regularity of hours to be worked over the reference period or such further conditions);
- Any workers that will be ‘excluded workers’

A guaranteed hours offer will be an offer to a qualifying worker to either vary their terms and conditions or enter into a new contract, although what the details may be set out in regulations.

This is not a one-time only duty, instead employers will have to repeat the assessment of whether a new guaranteed hours offer needs to be made until the qualifying worker no longer meets the criteria. After the initial reference period, the employer must monitor the worker’s working time over subsequent reference periods (the length of which is unknown – again this will be set in regulations) and offer further contracts for guaranteed hours if the conditions to make an offer are met at the end of those periods. The Government has agreed to a statutory duty to consult on the length of the initial and subsequent reference periods.

As the law essentially permits a worker the flexibility to choose to accept or reject a guaranteed hours offer, there are a raft of complicated rules as to what will constitute such an offer, with certain crucial details left to regulations.

Information rights: Employers will need to take reasonable steps to give and provide continued access to specified information to certain workers regarding their rights to a guaranteed hours offer within an ‘initial information period’ and continuing thereafter.
Exceptions and withdrawals: There are some exceptions where an employer will not be required to make a guaranteed hours offer, or such an offer will be treated as withdrawn, where there is a ‘relevant termination’ (such as resignations other than constructive dismissal scenario, worker terminations that are akin to fair dismissals, or expiry of a limited term contract where it was reasonable to be a limited term contract) during the reference, offer or response periods. Employers will be required to give workers a notice where they consider an exception to the duty to make a guaranteed hours offer or where a guaranteed hours offer has been withdrawn.
Limited term contracts: A guaranteed hours offer can only be on a limited-term basis if it is “reasonable” (and the ERA 2025 sets out some circumstances in which it is reasonable). There is essentially a rebuttable presumption that is it “not reasonable” for the workers contract to be limited-term unless the contrary can be shown. The Government in its consultation response on the matter confirmed that employers will be able to offer temporary contracts where there is a genuine temporary work need. The Government has agreed that, before regulations are made on what counts as a temporary need it must consult stakeholders including seasonal workers, employers of seasonal workers and others.
Anti-avoidance: Anti-avoidance provisions are included and introduce additional grounds of action to prevent the manipulation of hours made available to a worker for the sole or main purpose of either making a reduced offer or avoiding the requirement to make a guaranteed hours offer altogether.
Claims: A worker can bring a claim to the employment tribunal for failure by an employer to make an offer or a compliant offer for the purposes of these provisions or breaches the anti-avoidance provisions. A successful claim can lead to an award of compensation (with regulations being needed to set the maximum compensation that could be awarded). There are also additional rights to bring a complaint to the employment tribunal regarding failing to give certain information or notices under the provisions.

As is usual, there are corresponding dismissal and detriment protections:

Contracting out by way of collective agreement: The rights to a guaranteed hours offer can also be contracted out by way of collective agreement for workers. This is subject to the terms of the collective agreement to expressly exclude and replace the duty or right being incorporated into the qualifying worker’s contract and the employer notified the worker in writing of the incorporation and effect of the terms.

These provisions in the ERA 2025 are complicated and unfortunately much of the detail is saved for regulations, so we cannot say yet how this new right will work in practice. There is also a promise to consult later on the implementation of the zero-hour contracts measures more generally.

It will be interesting to see what the threshold will be for being a low hours worker, as some employers may try to bypass these complicated laws and just set minimum contractual hours above that threshold if they aren’t set too high – although such employers may be caught by the new anti-avoidance provisions. Even if not – this might not be workable for all businesses.

Further, as the obligation to monitor working time and make guaranteed hours offers is an ongoing one, this will likely be a compliance headache for smaller businesses and for certain sectors such as retail and hospitality that may rely on zero-hour contracts to fill seasonal resourcing gaps.

Notification of shifts

The ERA 2025 will introduce the following rights and obligations:

It will require an employer to give eligible workers (which includes workers engaged on zero hours or certain workers with no set working patterns) “reasonable notice” of shift. What length of time amounts to “reasonable notice” is not defined and the minimum time will be left to regulations.
Such workers also will have the right to ‘reasonable notice’ of any cancellation of or change to a shift.
If an employer fails to provide sufficient notice of a cancelled, moved or curtailed shift (i.e it does so on ‘short notice’), they must make a payment to the worker (the amount of the payment will be set out in regulations – but it will be proportionate to the cancellation, change or curtailment).
The right to reasonable notice of shifts can also be contracted out by way of collective agreement for workers in a similar way as to the requirements for a guaranteed hours offer.
In addition, again there are potential tribunal claims a worker can bring for failure to comply with giving of reasonable notice or subjecting a worker to a detriment.

The above provisions are aimed at ending one-sided flexibility, although employers will need to be organised with resourcing and have facilities to make payments for short notice changes to shifts – this may be more significant for large employers that employ flexible workers regularly (such as in retail and hospitality).

The ERA 2025 also repeals the Workers (Predictable Terms and Conditions) Act 2023, which would have introduced a new right to request a predictable working pattern.

Application to agency workers

Following a Consultation in October 2024, the ERA 2025 extends these rights to qualifying agency workers in a similar way (although with some key differences to reflect the nature of this different arrangement) as follows:

Guaranteed hours offers

An agency worker (as defined) of a hirer will be a qualifying agency worker if during the particular reference period the agency worker worked for and under the supervision and direction of the hirer for a certain number of hours and with a certain regularity (details of which will be set out in regulations).
It will be the end hirer who is obliged to make a guaranteed hours offer to the qualifying agency worker. The Government Factsheet indicates that although the default will be that the obligation lies with the end hirer, it recognises that there are complex relationships and so the legislation allows “flexibility to place the obligation on agencies or other intermediaries instead, in certain scenarios”. Details on how this will work, including the circumstances in which a work-finding agency or other party is required to make the offer instead, is to be set out in regulations. However, a guaranteed hours offer to a qualifying agency worker must be on terms and conditions relating to pay that comply with one of four conditions A to D making sure that such terms and conditions are, in addition to other additional matters, in essence no less favourable than those the qualifying agency worker had when working for and under the direction of the hirer during the relevant reference period.
If a qualifying agency worker accepts the offer from the hirer, they will become a worker (not an employee) of the hirer and the end-hirer will be the employer from the date the qualifying agency worker accepts a guaranteed hours offer made by the end-hirer. Although clearly worker status will then be dependent on the facts and circumstances of the arrangement.
As for workers, a guaranteed hours offer must not propose a limited-term contract unless it is reasonable to do so, and there are provisions which set out what is ‘reasonable’.
These proposals seemingly do not change the system of transfer fees and extended hire periods which are set out in the Conduct of Employment Agencies and Employment Businesses Regulations 2003 – which the Government has confirmed will continue to apply.

Reasonable notice of shifts and compensation for ‘short notice’:

Agency workers will be entitled to the rights in respect of reasonable notice of shifts, unless the shift is an ‘excluded shift’ (details of which are currently unknown). This responsibility will be placed on both the work-finding agency and the end hirer and liability will be apportioned to reflect the party responsible for providing unreasonable notice in each case.
Qualifying agency workers, as for qualifying workers, are also required to be paid compensation for ‘short-notice’ cancellation, curtailment or movement of shifts (but not in respect of ‘excluded shifts’). It will be the responsibility of the work-finding agency to make the payment for compensation on the basis that the Government considers this is “most efficient option,” as the agency worker will already be on the agency’s payroll. There are transitional provisions which will allow the agency to recover from the hirer the proportion of payments made to agency workers for short notice that reflect the hirer’s responsibility for the insufficient notice. However, this will only apply where the arrangement between the employment agency and the hirer was pre-existing on or before the period of two months after the ERA 2025 passed and it has not been modified since. After this, it will be for the agencies and hirers to negotiate the terms between them in their contracts as to the recovery of such payments.

Contracting out by way of collective agreement:

The rights to a guaranteed hours offer and to reasonable notice of shifts can also be contracted out by way of collective agreement for agency workers in a similar way as for workers.

Employers may be concerned about these measures, and the knock-on impact of using agency workers, including increased complexity and costs, but the impact of this will largely depend on some of the details of the threshold application. The Government has said that it will maintain flexibility to cater for different circumstances by exception and indeed the Factsheet currently states that regulations setting out the details may apply differently for directly engaged and agency workers. However, as with many of the elements of this reform, details of how the measures will work in practice are still to be set out.

Timing and developments

Included in the ERA 2025.

The Government had said it will consult on these measures (the roadmap previously suggested Autumn 2025, but this is delayed). This is likely to include consultation on:

Guaranteed hours offers – the definitions of low and zero-hour contracts and what working hours and patterns will make an agency worker qualify for the rights, length of any reference periods and the requirements of a guaranteed offer etc; and
Shifts – what amounts to short notice or a moved shift and the payment amount.

The Government has also promised that it will develop guidance on understanding the new rights before they come into force.

The Government’s updated timeline indicates that the measures regarding zero-hours contracts will take effect in 2027, although a specific date is not provided.

Sources

Consultation on the application of zero hours contracts measures to agency workers on 21 October 2024, Response to zero hours consultation 5 March 2025, Timeline for Implementing the Plan to Make Work Pay.

Umbrella Companies

The previous Government launched a consultation in 2023 on non-compliance in the umbrella company market (i.e. a business which employs a worker with a view to that worker being supplied to work for, and be under the control of, an end-client). The current Government issued a response and included provisions in the ERA 2025 to expand the definition of ‘employment businesses’ to include umbrella companies, allowing for the regulation of umbrella companies, and for state enforcement (currently by the Employment Agency Standards Inspectorate, but then by the Fair Work Agency once established).

Existing laws that regulate the conduct of employment agencies and businesses include: (i) providing a ‘key information document’ to agency workers; (ii) maintaining accurate records of compliance with regulations; (iii) protections from detriment for the agency worker if they terminate their agreement with the employment business or work elsewhere; and (iv) ensuring transparency regarding pay and deductions. The Government launched a consultation on 6 February 2026 which seeks views on its proposals to amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (the ‘Conduct Regulations‘), including to ensure that they apply effectively to the particular business activities of umbrella companies, as well as seeking views on aspects of the Agency Workers Regulations 2010.

The consultation paper sets out a number of proposed changes to the Conduct Regulations, focusing on three overall objectives of (i) increasing security in the agency worker market (for example, ensuring agency workers are always paid for work done), (ii) increasing transparency for agency workers (for example, in respect of pay), and (iii) allowing for genuine choice within the temporary labour market (for example, extending protections against detriments). The consultation also states that depending on the responses to the consultation, the Government may run a second consultation seeking views on more detailed proposals to streamline and simplify the regulatory framework. The Government has indicated that it seeks to balance the need to ensure clarity for workers without creating undue burden on businesses who operate in this sector. The new regulations will then apply to the expanded definition of employment businesses.

Separately, the Government has decided to introduce legislation to make tax reforms to umbrella company arrangements (essentially introducing joint and several liability provisions within the labour supply chain), with such changes to take effect from April 2026. Details of this are outside the scope of this hub (see Gov.uk for more).

Timing and developments

The employment law changes are included in the ERA 2025.

The consultation on modernising the agency work regulatory framework is open until 1 May 2026.

The Government’s updated timeline indicates that this measure will take effect in 2027, although a specific date is not provided.

Sources

Response to consultation on tackling non-compliance in the umbrella company market 4 March 2025, Timeline for Implementing the Plan to Make Work Pay, Consultation on modernising the Agency Work Regulatory Framework.

Family Friendly Rights

In the Background Briefing to the King’s Speech the Government said it will be “strengthening protections for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work, except in specific circumstances.”

The accompanying explanatory notes explained that the Government will “amend existing powers so that regulations can be made to ban dismissals of women who are pregnant, on maternity leave and during a six-month return-to-work period – except in specific circumstances. It will also expand existing powers in relation to adoption leave, shared parental leave, neonatal care leave and bereaved partners paternity leave to enable regulation of dismissal in the period after a person returns to work after taking one of these forms of leave.”

The ERA 2025 includes those regulatory making powers, which will determine how the protections from dismissal will operate in practice.

On 23 October 2025, the Government launched a consultation setting out various potential options for how the dismissal protections for pregnant woman and new mothers (i.e. those in a protected period from birth/placement) could be enhanced, including:

Introducing a new test of fairness: Under this option, employers would still be able to rely on any of the existing fair reasons for dismissal but they would also be required to meet a new stricter standard when relying on that reason to dismiss a pregnant woman or new mother. For example employers might also need to show that continuing the employee’s employment would have a significantly detrimental effect on the business, poses a health and safety risk to customers, staff or the public or has a serious negative impact on the wellbeing of others.
Narrowing the scope of and/or removing some of the fair dismissal reasons: This option would involve limiting the five potentially fair reasons for dismissal when applied to pregnant women and new mothers – potentially removing some altogether. Multiple options are put forward. For example narrowing the ground of conduct to gross misconduct or removing capability as a fair ground of dismissal for pregnant women and new mothers.

The consultation also sought views on:

Whether there should be a qualifying period (e.g. 3-9 months) to receive these enhanced protections.
When the protection should start and end (i.e. what the protection period should be and in what circumstances).
Whether other new parents should be covered (e.g. those on adoption leave, shared parental leave or neonatal care leave or bereaved partners paternity leave).

The policy intent behind the proposal, is to reduce discrimination of women who are pregnant, on maternity leave or because they have been on maternity leave and the consultation states that many expectant and new mothers continue to report experiences that suggest unfair treatment persists.

Currently, the law does not grant special protected status from dismissal to pregnant women and new mothers, and a woman can still be fairly dismissed during pregnancy, provided that the reason for the dismissal is not discriminatory . The only exception is in redundancy situations where an employee must be offered a suitable alternative vacancy if one is available. This position is set to change, although the impact of the changes will depend on which option(s) the Government ultimately chooses following consultation. To read more about this see our article here.

Timing and developments:

Included in the ERA 2025.

Further regulations will be required as to the practical detail of the right and a consultation was issued on 23 October 2025 (closed on 15 January 2026), which will shape this detail. The Government’s updated timeline indicates that the measure will take effect in 2027, although a specific date is not provided.

Sources

Impact assessment, Consultation on enhanced dismissal protections for pregnant women and new mothers, Timeline for Implementing the Plan to Make Work Pay.

Day one paternity leave and parental leave and bereaved partner’s paternity leave

The ERA 2025 will remove the requirement for employees to have completed a qualifying period of employment to be entitled to take statutory paternity leave and statutory parental leave, making them available from day one.

This does not amend entitlements to statutory paternity pay, which will remain available only after 26 weeks of employment. Statutory parental leave will remain an unpaid right. In addition, the ERA 2025 will remove the current restriction on taking paternity leave and receiving statutory paternity pay following a period of shared parental leave and shared parental pay.

We also note that the Government is introducing Bereaved Partner’s Paternity Leave. Although this is not in the ERA 2025 or the wider Plan to Make Work Pay this is a new right (introduced in the Paternity Leave (Bereavement) Act 2024 and associated regulations). The changes removed the qualifying period for paternity leave in bereavement cases, and are introducing a new right to Bereaved Partner’s Paternity Leave, which will enable an eligible employee to take up to 52 weeks of paternity leave where the child’s ‘primary carer’ (their mother or adopter) dies in childbirth or within a year of the birth or adoption. There is no statutory pay requirement and this will be a day one right. Read more here.

Timings and developments:

Included in the ERA 2025 (save Bereaved Partner’s Paternity Leave which is not).

Commencement regulations have now been made, with corresponding transitional provisions detailing how this will apply in certain scenarios. In summary:

Paternity leave – Day one paternity leave rights (removal of qualifying period and removal of prohibition on ability to take paternity leave after shared parental leave) will substantially come into effect on 6 April 2026 (although provisions came into effect on 18 February 2026 so that employees that are newly eligible for ‘Day 1’ Paternity Leave and Unpaid Parental Leave can give notice).

Unpaid parental leave – The rights to day one parental leave will substantially come into effect on 6 April 2026.

Bereaved Partner’s Paternity Leave – The removal of the qualifying period for paternity leave where the mother or adopter of a child dies in childbirth or within a year of the birth or adoption came into force on 29 December 2025. The entitlement to Bereaved Partner’s Paternity Leave is due come into effect from 6 April 2026 and will only apply to bereavements that occur on or after that date.

Sources

Government Guidance for Businesses on Paternity Leave and Unpaid Paternity Pay, Timeline for Implementing the Plan to Make Work Pay.

Parental leave system

The Government promised previously to review the parental leave system within the first year of Government. A review of the parental leave system was launched by the Government on 1 July 2025. The scope of the review includes all current and upcoming parental leave and pay entitlements, including: maternity, paternity, adoption, shared parental, parental bereavement, parental leave (unpaid), neonatal, maternity allowance and bereaved partners paternity leave (unpaid – which is not yet in force). The initial call for evidence was open from 1 July 2025 to 26 August 2025. It was broad in scope and sought to test whether the existing parental leave and pay entitlements support four core objectives, which include maternal health, economic growth, the best start in life and childcare.

Timing and developments:

Not included in the ERA 2025.

This reform will be part of the Government’s longer-term plan as it recognises that it will take longer to consider how to make changes and implement them. The review is set to run for 18 months and will then set a roadmap for taking potential reforms forward to implementation. Timing for implementation is unknown.

Sources

Call for evidence.

Paid carer’s leave

The Government promised previously to review the recently introduced Carer’s Leave and potentially expand it to a right to paid leave whilst “being mindful of the impact of any changes on small employers.” On 19 November 2025, the Government published terms of reference for this anticipated review to consider whether there is a need to change the current approach to ensure carers and their dependants have the right support in place.

The review aims to:

Understand how the existing unpaid carer’s leave entitlement is working
Examine options for different models of paid carer’s leave
Consider the options and principles for additional interventions which may help unpaid carers enter, remain, and progress in the workplace
Identify options with low or no cost to business and the exchequer and appropriate routes for implementation

Timing and developments:

Not included in the ERA 2025.

This reform will be part of its longer-term plan. The review will be carried out in three phases and is expected to conclude by the end of 2026. A final report is anticipated Autumn 2026 to Winter 2026 to 2027, with a consultation response, findings and an implementation roadmap. Legal changes are not looking likely until 2027 based on these timings.

Sources

Plan to Make Work Pay, Next Steps to Make Work Pay.

Bereavement leave

Currently, there is no general right to bereavement leave, although:

parents are entitled to two weeks’ parental bereavement leave in relation to a death of a child under the age of 18 or if they have a stillbirth after 24 weeks of pregnancy and are eligible for statutory parental bereavement pay where they fulfil eligibility criteria; and
there is also the right to unpaid reasonable time off for family and dependents in an emergency.

Many employers currently voluntarily offer some form of compassionate leave (which may be paid or unpaid) for staff if they lose a family member.

The ERA 2025 gives the power to introduce a new statutory day one right to unpaid bereavement leave for employees who experience the loss of a loved one, including pregnancy loss. The ERA 2025 sets out the minimum requirements, including a minimum of one week’s leave and a window of at least 56 days for the employee to take leave. However, regulations will set out full details of the entitlement.

A consultation launched on 23 October 2025 seeks views on practical details of the new right, including eligibility criteria (including which relationships between the bereaved employee and the person who has died should qualify and what types of pregnancy loss should be covered), when and how the more general right to bereavement leave can be taken and the notice and evidence requirements. The outcome of the consultation will shape the final details of the new entitlement.

Employees will retain the right to take two weeks of leave in cases of the death of a child, as per the existing right to parental bereavement leave, and the existing entitlements to statutory parental bereavement pay will not be affected by the ERA 2025.

Timing and developments:

Included in the ERA 2025.

Further regulations will be required as to the practical detail of the right and a consultation was issued on 23 October 2025 (closed on 15 January 2026) which will shape this detail. The Government’s updated timeline and Factsheet indicates that the measure will take effect in 2027, although a specific date is not provided.

Sources

7 July 2025 Announcement, 7 July 2025 amendments, Consultation on leave for bereavement including pregnancy loss, Timeline for Implementing the Plan to Make Work Pay.

Time off for public duties

Currently, employees are entitled to a reasonable amount of time off from work to carry out certain specified public duties.

The Government agreed in the ERA 2025 to undertake a review of the right to time off for public duties, following opposition proposals during the bill’s passage. The Government must review the purposes for time off for public duties, including whether to extend it to cover employees who take time off as to carry out duties as a special constable, and publish a report.

Timing and developments:

The ERA 2025 commits the Government to undertaking a review and publishing a report within 12 months of the ERA 2025 passing (so by December 2026). However, whether or not this leads to changes to the right to time off for public duties and, if so, the timing of such change is uncertain.

Pay Gap Reporting

The Government has said it wants to tackle equal pay and sees gender pay gap reporting as a way of achieving this. The ERA 2025 includes some measures in respect of gender pay gap reporting, with the remainder to be included in the Equality (Race and Disability) Bill.

ERA 2025 Changes

The ERA 2025 makes amendments to the Equality Act 2010 (both of which will be subject to regulations) to:

Require large employers (those with 250 or more employees) to develop and publish equality action plans showing the steps they are taking in relation to their employees with regard to prescribed matters related to gender equality, which includes addressing the gender pay gap and supporting employees going through the menopause
Introduce the ability to make regulations on the information about outsourced workers that needs to be included in gender pay gap reporting, including, “among other things,” the identity of the providers of contract workers with whom the employer engages

The Government published guidance on 4 March 2026 on equality action plans, which states that from April 2026, employers on the gender pay gap reporting service will have the option to produce and publish a voluntary action plan alongside their gender pay gap data. It notes that no employers are required to publish an action plan for the 2026 to 2027 reporting year (although are encouraged to do so), but these will become mandatory from Spring 2027 (subject to regulations).

The guidance includes a list of 18 recommended actions that employers may include in their equality action plans, including actions to support women with health conditions and menopause. According to the guidance, as part of developing an action plan, employers must choose at least one action to address their gender pay gap and at least one action that supports employees experiencing menopause, although they are encouraged to include more. Actions are grouped around: recruiting staff, developing and promoting staff, building diversity into an organisation, increasing transparency, and supporting women with health conditions and menopause.

Action plans will be required to be submitted and published on the gender pay gap service and will be publicly available. Employers may also choose to publish them on their own websites.

It is unclear if further menopause guidance will be published, and therefore this may not be the final position. However, the Government has confirmed that additional guidance for employers will be published in April 2026 on creating an action plan.

Further Reforms

Additional reforms to pay gap reporting, anticipated in the Equality (Race and Disability) Bill, include extending pay gap reporting (applicable to large employers with 250 or more employees) to include mandatory ethnicity and disability pay gap reporting. The Government opened a consultation on 18 March 2025, which is now closed, and has said responses to the consultation will shape the legislation. The consultation commits to introduce mandatory ethnicity and disability pay gap reporting for large employers, using a similar framework already in place for gender pay gap reporting but with distinct considerations for ethnicity and disability, particularly in data collection and analysis. The Government is currently proposing:

To apply key aspects of the gender pay gap reporting rules to ethnicity and disability pay gap reporting, including using the same set of pay gap measures, using the same reporting dates, and applying the same enforcement policies.
That data collection for race and disability would be best achieved by voluntary reporting, with employees able to choose ‘prefer not to say’.
That covered employers should also have to report on the overall ethnic breakdown of their workforce, the breakdown of their workforce by disability status and the percentage of employees who did not disclose their personal data on ethnicity and disability.
To introduce certain additional reporting requirements for public bodies, including in relation to recruitment, retention and progression.
To apply a de minimis threshold for reporting on 10 employees in each ethnic group for ethnicity reporting and in each group being compared (e.g. disabled/non-disabled) for disability reporting for data privacy and identification reasons.
Whether employers should report on ethnicity as a minimum, on a binary classification basis using one of three proposed methods, (e.g. comparing White British employees with all other ethnic minority groups combined).
Whether employers should report on disability, using a binary approach reporting on differences in pay between disabled employees and non-disabled employees, rather than requiring reporting on the difference in pay between employees with different impairment types and non-disabled employees.
Whether equality action plans should also be produced by employers about what they are doing to improve workplace equality for ethnic minority employees and for disabled employees.

Reporting on ethnicity and disability poses inherent challenges. People are often reluctant to disclose that they are disabled or do not accurately report their status because they do not to understand the legal definition of disability. Also, there is a tension between balancing the risk of being able to identify individuals, and reporting meaningful data, particularly where there are smaller data groups.

Timing and developments

Equality action plans for gender equality

Included in the ERA 2025.

Further regulations will be required as to the detail of the action plans (including the form and manner and how frequently they should be produced) and what information is required in relation to outsourced workers.

The Government’s updated timeline and guidance indicates that the measure regarding gender pay gap reporting and menopause action plans will be introduced on a voluntary basis on 6 April 2026 and then will formally take effect in spring 2027, although a specific date is not provided. The guidance suggests that for private companies, the first voluntary deadline for publishing an action plan will be 4 April 2027 (in respect of the 2026-2027 reporting year) and the mandatory deadline for publishing an action plan will be 4 April 2028 (in respect of the 2027-2028 reporting year), however confirmation is awaited in the regulations. The Government has confirmed that additional guidance for employers will be published in April 2026 on creating an action plan.

The Government’s updated timeline also indicates that menopause guidance will be provided on 6 April 2026. As noted above, some menopause guidance was published on 4 March 2026, but it is unclear if further guidance is expected. The guidance does note that from April 2026, organisations will be able to share evidence with the Government about actions taken and the Government will review and develop the actions to ensure they evolve alongside new evidence.

However, implementation of the gender pay gap outsourcing measure will be depending on timelines for the draft Equality (Race & Disability) Bill (further details will follow in due course).

Extending pay gap reporting to ethnicity and disability

Not included in the ERA 2025.

Consultation opened on 18 March 2025 and closed on 10 June 2025. The consultation will inform the provisions to be included in the Equality (Race and Disability) Bill. Timing for implementation is unknown.

Sources

Consultation 18 March 2025, Timeline for Implementing the Plan to Make Work Pay, Guidance on Equality Action Plans, Action plans: list of actions.

Equal Pay

The Government has indicated that it wants to tackle equal pay.

The Next Steps and Plan to Make Work Pay documents set out reforms in respect of equal pay that will be delivered through the Equality (Race and Disability) Bill and so are not included in the ERA 2025. A call for evidence (now closed) sought views on making the right to make equal pay effective for ethnic minority and disabled people and other areas of equality law and will shape the contents of the Equality (Race and Disability) Bill. A response to this is now awaited.

The proposed reforms included:

Extending the ability to bring equal pay claims to race and disability. This is currently limited to sex, although of course individuals currently have recourse by bringing a direct or indirect discrimination claim for these protected characteristics depending on the circumstances. The call for evidence suggests that the Government is considering whether the existing equal pay scheme provides the right model for these expanded equal pay rights, whether these rights should instead be given force by an amended version of the scheme or whether a different approach may be best. As part of this, the Government has said it is giving particular attention to whether the rules of procedure governing how equal pay claims are heard and the use of job evaluation schemes could be simplified or adjusted for these claims.
Changing equal pay law to ensure that outsourcing of services can “no longer be used by employers to avoid paying equal pay.” The detail of this has not been set out for certain, but the call for evidence indicates that the Government is exploring “enabling comparisons between outsourced workers and ‘in house’ employees in equal pay claims.” The Government explains that the term outsourced workers could cover a broad range of scenarios including traditional outsourcing of services through an external service provider, the use of arrangements such as subcontracting, umbrella companies, labour providers or employment agencies. This may involve employees working for a principal company being transferred to an external provider to provide a service and also scenarios where those workers have never been employed by the principal company. The Government also sought views on where liability should lie for equal pay claims made by outsourced workers.
Implement a Regulatory Enforcement Unit for equal pay with involvement from Trade Unions (see the Enforcement section).

The call for evidence also sought views on improving pay transparency to see whether additional pay transparency measures, similar to some of the measures set out in the Pay Transparency Directive in the EU, should be introduced to improve pay equality not only on the basis of sex and also race and disability. It also sought views on the effectiveness of the current regime under the Equality Act 2010 (Equal Pay Audits) Regulations 2014, whereby employers who have been found by an Employment Tribunal to have committed an equal pay breach are required to carry out an equal pay audit in certain circumstances. It is considering whether the requirements to undertake equal pay audits should be expanded to cases where pay discrimination has been found in relation to race and disability, alongside sex and maternity.

Timing and developments

Not included in the ERA 2025.

Call for evidence launched on 7 April 2025 in respect of the provisions to be included in the Equality (Race and Disability) Bill, and closed on 30 June 2025.

Sources

Consultation 18 March 2025, Call for evidence 7 April 2025.

Menopause

The ERA 2025 introduces a new duty for large employers (those with 250 or more employees) to develop and publish equality action plans showing the steps they are taking in relation to their employees with regard to prescribed matters related to gender equality, which includes addressing the gender pay gap and supporting employees going through the menopause. Further regulations will be required as to the detail of the action plans to be published (including the form and manner and how frequently).

In addition, in the Next Steps document, the Government promised also to develop menopause guidance for employers as part of its existing powers and non-legislative reforms.

On 4 March 2026, some guidance was published in respect of supporting women with health conditions and menopause. This takes the form of recommended potential actions that may be included in employers’ equality action plans (see Pay Gap Reporting for further details), and includes steps such as manager training, offering occupational health advice and workplace adjustments, setting up support groups, conducting a menopause risk assessment and reviewing internal policies and processes. It is unclear if further menopause guidance will be published.

Timing and developments

Equality action plans

Included in the ERA 2025.

Further regulations will be required as to the detail of the action plans (including the form and manner and how frequently) and what information is required in relation to outsourced workers (see Pay Gap Reporting). The Government’s updated timeline and guidance indicates that the measure regarding gender pay gap reporting and menopause action plans will be introduced on a voluntary basis on 6 April 2026 and then will formally take effect in Spring 2027. It also states that menopause guidance will take effect on 6 April 2026, but it is unclear whether further guidance will be published in addition to the 4 March 2026 guidance noted above. Implementation of the gender pay gap outsourcing measure will depend on timelines for the draft Equality (Race & Disability) Bill (further details will follow in due course).

Guidance

This can be delivered outside of the legislative process and the Government’s updated timeline indicates that menopause guidance will take effect on 6 April 2026. It is unclear whether further guidance will be published in addition to the 4 March 2026 guidance noted above.

Sources

Plan to Make Work Pay, Next Steps to Make Work Pay, Timeline for Implementing the Plan to Make Work Pay, Guidance on Equality Action Plans, Action plans: list of actions.

Annual Leave Records

Under the ERA 2025, employers will be required to keep records to demonstrate compliance with certain obligations in respect of annual leave and pay under the Working Time Regulations 1998.

Like other requirements in respect of record keeping for working time, employers must keep records that are ‘adequate’ and retain them for six years. The records must be created, maintained and kept by employers in such manner and format as the employer reasonably thinks fit.

If an employer fails to comply with this duty it will be an offence, punishable by a fine. This will also become part of the enforcement remit of the Secretary of State which will be delegated to the new FWA enforcement agency once established.

Timing and developments

Included in the ERA 2025.

Commencement regulations will be required to bring the provision into force. Firm details on timing have not yet been provided in the Government’s roadmap or its updated timeline – but this could be introduced to align with when the Government introduces enforcement rights for holiday pay in due course.

Flexible Working

The Government’s stated policy is to make flexible working the default from day-one on the job, with employers required to accommodate this as far as is reasonable (or except where it is not reasonably feasible).

The current law (amended in 2024 – see our article here) gives employees the right to request flexible working rather than a right to have flexible working, and employers have broad business reasons for which they can refuse an individual’s request.

The ERA 2025 builds on the current legal framework, increasing the obligations on employers, and provides for the following:

An employer may refuse a flexible working request only if:
- The employer considers that the application should be refused on one or more of the eight statutory grounds (which are set to remain the same as the current law); and
- It is reasonable for the employer to refuse the application on that ground (or grounds).
An employer must explain in their notification of refusal why it considers it reasonable to refuse the application on the statutory ground or grounds (unless the provision of information would be contrary to the interests of national security).
A new power for the Government to make regulations setting out what steps employers will have to take to comply with the requirement to consult with the employee about their flexible working application.

Despite these changes, the penalty for non-compliance is currently set to remain a maximum of 8 weeks’ pay (currently capped at £719 from 6 April 2025), together with an order for reconsideration.

A consultation was launched on 5 February 2026 seeking views on the proposed new consultation process for employers dealing with flexible working requests, including the following proposals:

The employer should hold a meeting with the employee before a decision is agreed within six weeks of the request, giving the employee advanced notice. The person holding the meeting should have sufficient decision-making authority
The decision maker must clearly communicate any challenges with the request, why it might not be feasible to accommodate or why it is not reasonable referring to the statutory grounds. This includes consideration of ways to navigate challenges and accommodate the request. If the original request cannot be feasibly accommodated, suitable alternatives must be considered. If the potential impacts are unclear, the parties could choose to trial the arrangement for a fixed period
The decision maker must clarify if the employee wishes their request to be dealt with as a reasonable adjustment
A written record must be taken of the meeting and provided to the employee in addition to providing a written outcome of both the meeting and of the request

It remains to be seen to what extent these steps will become part of the statutory process and whether these changes will greatly change the flexible working landscape for employers. However, at a minimum, the changes will likely increase the burden of justification on employers to consider and demonstrate the reasonableness of any refusal and are likely to add additional compliance steps for employers to demonstrate compliance with the duty to consult the employee about their application. These enhancements could lead to an increase in claims relating to the refusal of flexible working requests and may make the implementation of wholesale office mandates increasingly difficult at a time when more and more employers are pushing for in-person office attendance.

Timing and developments

Included in the ERA 2025.

A consultation on the steps an employer must take to comply with the obligation to consult was launched on 5 February 2026 and closes on 30 April 2026. The consultation indicates that statutory guidance will be produced to help employers regarding the new reasonableness test, and that ACAS will consider reviewing its Code of Practice on flexible working, which will also be subject to further public consultation.

The Government’s updated timeline indicates that measures in respect of flexible working will take effect in 2027, although a specific date is not provided.

Sources

Factsheet on Flexible Working, Timeline for Implementing the Plan to Make Work Pay, Consultation on improving access to flexible working.

Right to Switch Off

The ‘right to switch off’ was referenced in the Plan to Make Work Pay but was not one of the legislative changes included in the ERA 2025.

The Next Steps document indicated that the Government would be taking forward the ‘right to switch off’ through other means via a statutory code of practice (mirroring approaches taken in Ireland and Belgium) rather than via a statutory ‘right to disconnect’. Press reports rumoured that the Government was dropping this proposal but given there is no official confirmation that this policy is being dropped, we set out details of what this might look like below.

If introduced, a statutory code of practice, potentially issued by Acas, would likely require employers to agree policies and practices regarding expectations of normal working hours and when staff should expect to be contacted. The Government previously suggested that the purpose of the code of practice will be to prevent employees from being contacted out of hours, except in exceptional circumstances, to allow them the rest and recuperation they need to give 100% during their working hours.

If the code of practice were to operate in a similar way to other Acas codes of practice, such as for disciplinary and grievances, we could see Employment Tribunals being granted the power to increase compensation awards if an employee is successful in another claim for an employer’s failure to adhere to guidance regarding the ‘right to switch off’. For example, as we see in other areas, we may see an Employment Tribunal having the ability to increase compensation awarded by up to 25% for an employer’s failure to follow the code of practice.

Finding a balance between working flexibly and giving clear boundaries for when an employee can ‘switch off’ is no easy task. If the Government proceeds with this reform, then any code of practice will need to find a solution that considers different sectors and roles rather adopting a blanket one-size fits all approach.

Timing and developments

Not included in the ERA 2025.

This was listed as one of the ‘non-legislative’ reforms that the Government will look to develop alongside the ERA 2025’s passage and beyond it becoming law. However, there are rumours that this has been dropped by the Government, although official confirmation has not been provided.

We await confirmation.

Sources

Plan to Make Work Pay, Next Steps to Make Work Pay.

Worker and Employment Status

The Government has said in its Plan to Make Work Pay that it wants to transition towards a two-part framework for employment status that will consist of workers and self-employed only (unlike the three-tier category of employee, worker and self-employed that we currently have). These reforms are not included in the ERA 2025 but are currently intended to be part of the Government’s longer-term reform plan. During debates in the House of Lords, the Government said that it was “committed to consult on tackling the pressing issues with the existing framework for employment status” and has committed to publish its consultation on employment status by the end of 2025 (although this is still awaited).

We await the consultation to have a clearer idea of the Government’s proposals. It is, therefore unclear at this stage if this policy would entitle all those who are currently considered workers to have the same level of employment rights as employees currently do, or whether new boundaries between workers and self-employed will be drawn.

Whichever approach is taken may increase the number of individuals that have the fuller set of employment rights that are currently only available to employees. That could mean individuals who were previously considered self-employed workers will gain the right to minimum notice on termination and to unfair dismissal, for example.

If the Government also looks to align the employment law tests with the tax tests, it could also have the effect that those who are ‘workers’ on the new test would be taxed as employees and so employers would have to pay employer National Insurance contributions – currently, self-employed workers are taxed as self-employed.

Depending on how the lines are drawn, the effect of this reform could be significant for employers in terms of cost and their employment or engagement models.

In addition, the Labour Government also promised to “strengthen rights and protections to help self-employed workers thrive”, including the right to a written contract, action to tackle late payments, and by extending health and safety and blacklisting protections to self-employed workers in addition to potentially extending union rights to the self-employed. Hansard debates from Summer 2025 indicated that consideration of additional measures to strengthen protections for the self-employed will be wrapped up in the wider consultation on employment status.

Timing and developments

Not included in the ERA 2025.

This reform will be part of its longer-term plan – as the Government recognises that it will take longer to consider how to make changes and implement them. It has committed to a full consultation on both worker status and how to implement its manifesto commitments to enhance protections for self-employed workers, which was anticipated by the end of 2025 – but this has been delayed. So, it may be still some time before this is implemented.

Sources

Plan to Make Work Pay, Next Steps to Make Work Pay.

TUPE and Outsourcing

The Plan to Make Work Pay said that the Government wanted to ‘strengthen’ rights and protections for workers subject to TUPE processes. It is unclear what is meant by strengthening TUPE protections at this stage.

The Next Steps document states that this is part of its longer-term reform plan and that the Government will launch a call for evidence to holistically examine a wide variety of issues relating to TUPE regulations and process, including how they are implemented in practice.

In addition, the ERA 2025 introduces reforms in respect of public sector outsourcing. The ERA 2025 contains powers aimed at preventing two tier workforces when public services are outsourced. The Government has said it wishes to reinstate and strengthen the Code of Practice on Workforce Matters in Public Sector Service Contracts (known as the two tier-code) through regulations and a Code of Practice. The provisions will also give the power to make regulations regarding provisions which contracting authorities must take all reasonable steps to ensure are included in relevant outsourcing contracts. Full details are outside the scope of this hub – see the Government’s Factsheet.

Timing and developments

TUPE review

Not included in ERA 2025.

This reform will be part of its longer-term plan as the Government recognises that it will take longer to consider how to make changes and implement them. It has committed to launching a call for evidence.

Public sector outsourcing

Included in the ERA 2025.

The Government’ roadmap’s updated timeline indicates that these measures will take effect in October 2026.

Sources

Plan to Make Work Pay, Next Steps to Make Work Pay, Government Factsheet on Public Sector Outsourcing, Timeline for Implementing the Plan to Make Work Pay.

Non-Competes

There are no provisions in the ERA 2025 that address non-competes, and the Plan to Make Work Pay did not mention them either. The previous Conservative government had intended to limit the duration of non-compete restrictions to three months (see our earlier articles here and here), but this was moved down the agenda and never came to fruition. Despite earlier silence on the issue, the Labour Government confirmed during debates on 21 July 2025 that the Government will consult on this issue in due course.

Following this, a working paper was published on 26 November 2025, which seeks views on different policy options, including:

Introducing statutory limits on the length of non-compete clauses, exploring limits on the length of non-competes or limits that differed according to company size
Banning non-compete clauses in employment contracts
Banning non-compete clauses below a salary threshold
Combining a ban below a salary threshold with a statutory limit of 3 months for those who earn above the threshold

The consultation also asks:

Whether there are any obstacles to bringing claims on restrictive covenants, including non-compete clauses, in the courts
Whether any restrictions should be limited to non-compete clauses only or should also apply to other restrictive covenants (e.g. non-dealing clauses)
Whether any restrictions should be limited to employment contracts or whether they should be applied to wider workplace contracts

Timing and developments

Not included in the ERA 2025.

A working paper was published on 26 November 2025 and responses were to be submitted by 18 February 2026. Timing for implementation is currently unknown. (and this has not been included in the Government’s updated timeline).

Sources

Hansard records – 21 July 2025, Working Paper on options for reform of non-compete clauses in employment contracts.

Data Privacy & AI

AI

The King’s Speech said that it will “seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models” – this is not included in the ERA 2025 but had been originally anticipated in as a separate AI Bill.

The Plan to Make Work Pay, also included some comments about AI in the workplace, saying:

It recognises the importance of new technologies including AI but that it sees that it can also pose risks to jobs and livelihoods;

It wants to ensure rights and protections keep pace with technological change, safeguard against discrimination and put the worker voice at the heart of digital transition;

It would work with workers and unions to safeguard against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision making; and

At a minimum, it will ensure that proposals to introduce surveillance technologies would be subject to consultation and negotiation, with a view to agreement of trade unions or staff representatives (see the Collective Bargaining and Trade Unions section).

The Government may perhaps look to the TUC’s draft AI Bill for inspiration for any domestic rules here on the use of AI systems by employers in relation to workers, employers and jobseekers.

Since the King’s Speech and the Plan to Make Work Pay’s publication, there have been some developments to AI (although not all directly employment-related) which demonstrate the Government’s changing position in respect of AI, but which overall appears to prioritise flexibility, economic growth and a light-touch stance to regulation, over a strict legislative approach. Such broader developments , which may not directly impact employers include:

On 5 September 2024 the Government and the EU announced their signature of an international convention in respect of Artificial Intelligence and Human Rights, Democracy and the Rule of Law. As part of the Government’s announcement on this, it confirmed that it will work closely with regulators, the devolved administrations, and local authorities as the convention is ratified to ensure it can appropriately implement the new requirements.
In December 2024, the Government launched a consultation relating to AI and copyright (now closed), which included consideration on the regulation of deep fakes, transparency of AI systems and labelling of generative AI outputs. The aim of the consultation was to set out the “plan to deliver a copyright and AI framework that rewards human creativity, incentivises innovation and provides the legal certainty required for long-term growth in both sectors” – clearly seeking to balance innovation and regulation. Copyright was a contentious topic during the passing of the Data (Use and Access) Act 2025. In the final text, provisions were included which require the Government to show its progress.
On 13 January 2025, the Government published its AI Opportunities Action Plan, with which it hopes to “position the UK to be an AI maker”. This action plan re-iterates the Government’s “pro-innovation” approach to regulation, which is considers “a source of strength”.
In February 2025 the UK (along with the US) refused to sign a declaration on the international AI statement at the global AI summit in Paris. However, it did sign up to other global initiatives including the Coalition for Sustainable AI.
Press reports from late February 2025, also indicated that the Government’s plans to introduce an AI Bill “to place requirements on those working to develop the most powerful artificial intelligence models”, is on hold (or dropped) in a potential alignment with the US’s stated position at that time.
In October 2025, the Department for Science, Innovation and Technology announced that it plans to establish controlled testing environments, “AI Growth Labs”, to allow key sectors (e.g. healthcare, professional services, transport and manufacturing) to test and develop AI tools under relaxed regulatory rules but with strict supervision to encourage innovation within secure settings. A call for evidence is open until 2 January 2026.
As a final note, new DUA Act relaxes the existing restrictions on automated decision-making from UK GDPR to situations only where a significant decision is based entirely or partly on the processing of special category data. The relevant provisions came into force on 5 February 2026.

Data Privacy

As mentioned above, the DUA Act separately makes reforms in respect of data privacy and AI that, although not necessarily linked to the Plan to Make Work Pay, may be of interest to employers.

Although much of the DUA Act is not employment related, there are some key changes that are of note from an employment perspective, including:

Introducing an exhaustive list of “recognised legitimate interests” on which businesses can rely by default as a lawful ground for processing ordinary personal data, although in practice this is unlikely to make a significant practical difference to employers as the list is quite narrow. It also introduces a non-exhaustive list of examples of types of processing that may be considered necessary processing for the purposes of a legitimate interest to assist businesses, although employers will still need to complete a balancing exercise.
Relaxing the test for data transfers to third countries where the standard of protection is “not materially lower” than that of the UK.
Clarifying the principles relating to DSARs (specifically in respect of timing, extensions and stopping the clock) and codifying in legislation the principle that individuals are only entitled to information that the employer is able to provide based on a “reasonable and proportionate search.”
Introducing a new right to complain so that individuals may make a complaint directly to their employer if they consider there has been a breach of UK data privacy laws in respect of their personal data, and employers must facilitate these complaints by the provision of a complaints form, whether electronically or otherwise.
Replacing the ICO with the Information Commission and clarifying its extended powers.
As mentioned above, relaxing the restrictions on automated decision-making, which are currently based on a general prohibition with limited exceptions. The DUA Act narrows the restriction on automated decision making to only significant decisions based entirely or partly on processing of special category data (such as health or racial/ethnic origin). This opens up the possibility for UK employers to be able to lawfully rely on automated decision-making in a broader set of circumstances. Unless one of the specified conditions for authorisation are met. The DUA Act also provides for additional safeguards which employers are required to put in place.

To understand more about the changes, please read out article here.

Note that the EU-UK adequacy decision on data transfers (allowing for the transfer of data between the EU and the UK) has been renewed for six years to 27 December 2031.

Timing and developments

AI

Partly mentioned in King’s Speech. To be considered further in the new consultation and AI Opportunities Action Plan. Small changes to automated decision-making in the DUA Act. AI Bill reported to largely be on hold.

Data privacy

The DUA Act passed on 19 June 2025. The provisions have been coming into force on a phased basis, for example that DSARs need only be based on a reasonable and proportionate search is treated as coming into force on 1 January 2024 and additional provisions came or are coming into force from 17 November 2025, 5 February 2026 and 19 June 2026. The provisions which came into force on 5 February 2026 include the introduction of “recognised legitimate interest” as a new lawful basis, a new data protection test for transferring personal data to third countries and international organisations, and enhanced powers of the Information Commissioner’s Office. The new right to complain is due to take effect on 19 June 2026.

Sources

Announcement on 5 September 2024, AI Opportunities Action Plan, Copyright and Artificial Intelligence consultation, Data (Use and Access) Act 2025, Data Use and Access Act 2025: plans for commencement.

Immigration

The Labour Party Manifesto promised to reduce net migration by reforming the points-based immigration system “with appropriate restrictions on visas and by linking immigration and skills policy.” On 12 May 2025, the Government published a White Paper, ‘Restoring Control over the Immigration System’, which included broad changes for immigration policy across work, study, settlement, citizenship and human rights to be implemented in the current Parliament 9by mid-2029). The following proposals have accompanied the White Paper and have been implemented since, or are expected in the near future:

Minimum skill level – The Government raised the minimum skill level for Skilled Workers from RQF level 3 (high-school leaver or above) to RQF level 6 (degree-level or above) with effect from 22 July 2025. This does not affect those already on the Skilled Worker route in roles with skills levels below RQF level 6, who are free to extend, change employers in the same role, and qualify for settlement.
Temporary shortage list – for some roles on the Skilled Worker route after 22 July 2025 with jobs that are between RQF 3 and 5 where there are critical shortages, a Temporary Shortage List (‘TSL‘) has been created to allow sponsorship, though anyone sponsored on this list cannot bring family dependants. The old Immigration Salary List with its 20% discount on the general minimum salary threshold for sponsoring skilled workers will be phased out, but for now it has more roles added to it, also allowing a temporary reprieve for employers. Occupations are currently on these lists until 31 December 2026, by which time a review will be carried out. Sectoral bodies are invited to contribute to a call for evidence by 2 February. The Migration Advisory Committee (‘MAC‘) is due to report on its review by July 2026 on which jobs should stay on the TSL, which is designed to temporarily fill skills gaps while sectors endeavour to put skills and training strategies in place to curb reliance on sponsoring from abroad. (Easier said than done as the construction sector with its CITB levy is aware).

Care workers – It is no longer possible to sponsor new care workers from overseas under the Skilled Worker route since 22 July 2025. Visa extensions and in-country switching under this route will be permitted for a transition period until July 2028 9to be kept under review).

The Immigration Skills Charge – Paid by employers who sponsor workers under the Skilled Worker route and the Global Business Mobility – Senior or Specialist Worker route, increased by 32% on 16 December 2025. The increase means the Skills Change will be £480 per year per sponsored worker for a small sponsor or £1,320 per year for a large sponsor.

English language – The minimum standard of English required to qualify for a new Skilled Worker, High Potential Individual and Scale-up visa application rises from CEFR level B1 to B2 from 8 January 2026. These are broadly equivalent to a foreign language GCSE level and A-level respectively. Those who have already obtained permission where they were required to show a B1 level, will continue to be subject to a B1 level requirement where they are seeking an extension on the same route. Nationals of majority English speaking countries can meet the requirement automatically or it can be met through a degree that was taught in English or by passing an approved Secure English Language Test.

Settlement – The Government proposes to overhaul the current simple system of five years in the UK to qualify for settlement, also known as indefinite leave to remain (‘ILR‘). ILR allows someone to live and work in the UK without requirements such as sponsorship by an employer or a relationship with a settled or British person. Proposals include doubling the five-year base period to 10 years (15 years for workers skilled below RQF6). It is suggested that years will be taken off a new standard 10 years for higher tax rate payers, higher-skilled public servants, voluntary work, those on the Global Talent or Innovator Founder routes. Decades may be added on for immigration rule breaches and it is suggested that only those with “a clean criminal record” may apply to settle. New requirements for settlement such as B2 English level are also proposed. A consultation on the “earned settlement” proposals runs until 23:59 on 12 February 2026. Any business or person who wishes to contribute to this consultation can respond by following this link. You can read our fuller summary of the proposals below. Changes are planned from April 2026 onwards.

Graduates – Graduate visas to work in the UK after completing studies at UK universities will be shortened from 24 months to 18 months to applications submitted on or after 1 January 2027, with PhD graduates continuing to receive three years of leave.

Non-sponsored routes – There were minor amendments to evidencing applications for a Global Talent visa. The Immigration White Paper promised to expand this route for “top scientific and design talent”. The changes to settlement rules proposed may mean that at some stage those on a Global Talent visa will have had to have earned a taxable income of at least £12,570 per year for three years in the UK to settle here, though the five-year route to settlement may be abridged to three years. The Student route now permits those switching into the Innovator Founder route to be self-employed/establish a business once endorsed. The number of overseas education institutions whose graduates are eligible for the High Potential Individual route has now doubled from 50 to 100. The list of universities changes every year but the past five years’ lists have now doubled the number of universities that qualify graduates for this unsponsored work visa. The Tier 1 (Investor) category was closed with immediate effect on 17 February 2022. In line with this, those with permission under the category are able to apply for an extension of their permission up to 17 February 2026. No extension applications will be granted after this date.

Sponsor licence compliance – The White Paper raising minimum compliance metrics for Student sponsors and introduces a levy on tuition fees. Alongside this, the Government has doubled down on promises of stricter enforcement against employers who abuse the visa system, rules around illegal working and employment law. In 2024, UK Visas & Immigration revoked 1,620 licences to sponsor workers and temporary workers compared with 347 in 2023 (an increase of 367%). Suspensions of licences for workers and temporary workers also increased 215%.

Youth Mobility Scheme – The Government has not confirmed any proposals, but media reports suggest that a short-term Youth Mobility option for EU citizens is being discussed. According to UK newspaper reports, there would likely be a cap in the “tens of thousands” for the proposed two-year visa and it is likely to be launched in the current parliament, so in the next couple of years.

Illegal working – An amendment to the Border Security, Asylum and Immigration Act expanded the right to work check regime to certain non-employees, including gig economy and zero-hours workers. The government is expected to publish new guidance this year. In the long-term, the Prime Minister has hinted that right to work checks may eventually become mandatory. A new digital ID scheme will add an optional method to prove right to work.

Family visas – The current Minimum Income Requirement (‘MIR‘) to sponsor a partner on a family visa is likely to stay at £29,000 despite the MAC review, published in July 2025, suggesting a lower MIR threshold between £23,000–£25,000 as more reasonable. The Home Secretary is still considering how to respond to the Committee recommendations. Family members of British citizens are expected to avoid the increase to the settlement qualifying period and to still be able to qualify after five years.
The Electronic Travel Authorisation (‘ETA’) – As part of the digitalisation of the UK’s immigration system, those who do not need a visit to enter the UK as a visitor (such as US, Australian, Canadian and EU nationals) must apply for an online ETA before travel to the UK. This works much like the US ESTA or the EU’s ETIAS. From 25 February 2026, the ETA will be fully enforced for visa‑exempt visitors and those requiring landside transit, with carriers expected to deny boarding without an ETA or the new digital evidence of immigration status – the eVisa.

Consultation regarding new settlement framework

On 20 November 2025, the Home Office announced an intention to make substantial changes to the settlement system, whereby most applicants would have a 10-year settlement period, but which can be both reduced by favourable factors, as well as increased by adverse factors. Some applicants may have a 15 or a 20-year baseline qualifying period.

Starting baseline of 10 years for settlement – With the exception of anyone covered by the Withdrawal Agreement, the starting baseline for settlement will be 10 years for all applicants other than refugees, who will have a baseline qualifying period of 20 years (unless they came to the UK on a resettlement scheme, in which case it will be 10 years).

Minimum requirements for settlement – The framework introduces minimum requirements that someone applying for settlement will need to meet. Suitability: Must meet the general grounds of refusal found in the new Part Suitability section of the Immigration Rules. Must not have any current litigation, NHS, tax or other government debt. Integration: Must meet the English requirement at level B2 and pass the Life in the UK test. Contribution: Must have made National Insurance contributions by way of an annual salary or income of over £12,570, held for three to five years (this is currently subject to consultation).
Criminality – It is proposed that the current criminality requirement of not having a custodial sentence of over 12 months will change to “a clean criminal record” subject to a review of criminality thresholds across all immigration routes. The Home Secretary warns: “Our expectation is that you should not be able to settle with a criminal record. Revised thresholds will be set out in due course.”

Factors that reduce the baseline qualifying period for settlement and by how much

English language at level C1	Minus 1 year
Earned a taxable income of £125,140 per year for three years	Minus 7 years
Earned a taxable income of £50,270 per year for three years	Minus 5 years
Has been employed in a specified public service occupation	Minus 5 years
Has volunteered in the community	Minus 3-5 years
Applicants with permission as the parent/partner/child of a British citizen and meets “core family requirements”	Minus 5 years (not subject to consultation)
Applicants in the BN(O) route	Minus 5 years (not subject to consultation)
Completed three years in the Global Talent or Innovator Founder route as a main applicant	Minus 7 years
Specific vulnerable groups who should get reduction	Subject to consultation

Factors that the baseline qualifying period for settlement and by how much

Applicant has received public funds for less than 12 months during route to settlement	Plus 5 years
Applicant has received public funds for more than 12 months during route to settlement	Plus 10 years
Applicant arrived in the UK illegally, e.g. small boat/clandestine entry	Plus up to 20 years
Applicant arrived on visit visa	Plus up to 20 years
Applicant has previously overstayed their permission for six months or more	Plus up to 20 years

Balancing positive and negative factors – Where there is a positive factor that reduces the qualifying period and a negative factor that increases it, they will be balanced against each other. For example, where someone qualifies for a five-year reduction in their qualifying period because they are in the UK as a spouse of a British person, but they qualify for an increase of 10 years for previously being in receipt of public funds for more than 12 months, this means an overall increase of five years to their qualifying period, meaning they will qualify after 15 years.

Scrapping of the 10 year long residence settlement route – The 10-year long residence route to settlement is being eliminated as it is considered “obsolete” in light of the proposed changes. However, the policy says that those applying for settlement will need to have completed the required qualifying period in “route or routes” that lead to settlement. Presumably, this means that applicants will no longer be able to use their time spent in routes that do not lead to settlement, such as the Student route, towards their qualifying period.

Public fund eligibility – The Government is also considering whether to change primary legislation to permit indefinite leave to remain (‘ILR‘), also known as settlement, to be granted subject to “no recourse to public funds” (so that a right to access benefits only arises upon citizenship). At present, it is not possible to attach conditions to indefinite leave to remain.

Changes to dependent partners and children – Adult dependants of “economic migrants” are expected to be considered in their own right and will need to qualify on the basis of their own attributes. It is expected that child dependants will still be able to settle when they turn 18 but an age cut-off may be introduced after which point they will need to qualify in their own right. In those circumstances, there may be provisions that waive some of the mandatory minimum requirements e.g. the waiving of National Insurance Contributions.

Exemptions – As part of the consultation, the government will look at how to “tailor” the framework to the following categories: Adult Dependent Relatives, victims of domestic violence, bereaved partners, refugees who arrived in the UK on a resettlement scheme. Anyone applying under Appendix Armed Forces is expected to be exempt from the changes.

Transitional provisions – The policy states that it will apply to all immigrants, including people already in a route to settlement, but it also states that the consultation will look at whether to introduce transitional provisions for people already in a route to settlement and if so, what they should look like.

Changes to naturalisation requirements – The Government is planning to make changes to the citizenship requirements in line with the changes to settlement so that there is some alignment between the two. However, this is not expected to take place until after the consultation regarding the framework for settlement.

Timing and developments

Consultation regarding new settlement framework

Many of the changes proposed are still subject to consultation, though we expect most of the above provisions to be adopted into law.

We expect to see a new Statement of Changes to the Immigration Rules around March 2026, with some or most of the changes taking effect around April 2026. This includes major changes to qualifying for settlement. Any changes to citizenship will require an Act of Parliament so are not expected to take effect earlier than the end of 2026. Any changes to restrict the right of settled migrants to access public funds would also require an Act of Parliament and as yet, there is no timeframe for this proposal.

Sources

Labour Party Manifesto, King’s Speech, Statement 30 July 2024, Restoring control over the immigration system: white paper, Department for Education, Sponsorship transparency data, New rules to prioritise recruiting care workers in England and Wales, 12 March 2025, Statement of changes to the Immigration Rules 2025, Migration Advisory Committee, A Fairer Pathway to Settlement: statement and accompany consultation on earned settlement, 20 November 2025.

Pay

Strengthen Statutory Sick Pay

See Statutory Sick Pay for more details.

National Minimum Wage

Outside of the ERA 2025, the Government has promised to deliver a genuine living wage that accounts for the cost of living. It has changed the Low Pay Commission’s remit to factor in the cost of living when recommending minimum wage rates. It has also instructed the Low Pay Commission to narrow the gap between the minimum wage rate for 18-20 year-olds and the National Living Wage as a first step towards achieving a single adult rate.

As a result, the following changes to hourly rates were applicable from 1 April 2025:

National Living Wage (21 and older): increased from £11.44 to £12.21
National Minimum Wage (18 to 20-year-olds): increased from £8.60 to £10.00
National Minimum Wage (16-17 year olds and apprentices): increased from £6.40 to £7.55
Daily accommodation offset increased from £9.99 to £10.66.

The Government has announced that the National Minimum Wage hourly rates will increase again from 1 April 2026 as follows:

National Living Wage (21 and older): from £12.21 to £12.71
National Minimum Wage (18 to 20 year olds): from £10.00 to £10.85
National Minimum Wage (16-17 year olds and apprentices): from £7.55 to £8.00

Tax and National Insurance Contributions (‘NICs’)

Key changes in the 2024 Autumn Budget (on 30 October 2024) included:

Income Tax and NIC personal allowance thresholds frozen until the 2028 deadline set by the Conservative Government.
From April 2025, the rate of employer NICs was increased by 1.2 percentage points, from 13.8% to 15%.
The Secondary Threshold – the per-employee threshold at which employers become liable to pay NICs on each employee’s salary was reduced from £9,100 per year to £5,000 per year from April 2025 until April 2028 and then will increase by CPI thereafter.
The Employment Allowance also increased from £5,000 in April 2025 to £10,500 and is extended to all eligible employers by removing the £100,000 threshold for eligibility. Meaning that 865,000 employers will pay no NICs from this year.

The Autumn Budget on 26 November 2025 did not increase headline rates of taxes to income tax, NICs or Value Added Tax. However, some headline changes include that:

The Government will maintain the freeze to income tax thresholds and the equivalent NICs thresholds for employees and self-employed individuals at their current levels for a further three years from April 2028 to April 2031.
The Government will also maintain the current NICs secondary threshold for employer contributions from April 2028 to April 2031.
From April 2029, only the first £2,000 of pension contributions made by an employee each year through a salary sacrifice scheme will be exempt from NICs, where currently there is not a cap. Employer and employee NICs (but not income tax) will be charged in the usual way on salary sacrificed pension contributions above the £2,000 annual cap.

Internships and Apprenticeships

The Government has indicated it wants to ban unpaid internships, except when they are part of an education or training course. The Government launched a call for evidence on 17 July 2025, which considers unpaid internships and internships paid below the National Minimum Wage, unpaid work trials, voluntary work, volunteers and work shadowing. A response to this consultation was published on 27 February 2026, which summarises the findings which will help inform the Government’s next steps. In respect of unpaid internships, the Government has said it will 1) review and expand Government guidance; 2) use existing enforcement channels and the new Fair Work Agency to enforce non-compliance; and 3) bolster existing communications campaigns to help young people understand their rights.

The Government has announced it wants to make changes to the funding of apprenticeships in England. As part of the Autumn Budget 2025, The Government announced that it will provide a £1.5 billion investment over the next three years in employment and skills support. This includes providing £820 million worth of investment to fund a new Youth Guarantee (read our article here for more) and £725 million for the Growth and Skills Levy to help support apprenticeships for young people, including a change to fully fund SME apprenticeships for eligible people under 25.

In a written statement in December 2025, the Government outlined what the Youth Guarantee would comprise, including:

A new Youth Guarantee Gateway to be introduced for young people on Universal Credit who are looking for work. Eligible individuals would be offered a dedicated session followed by four weeks of additional intensive support with a Work Coach
New Youth Hubs to be established in over 360 locations to help young people access opportunities
Creation of up to 150,000 additional work experience placements and up to 145,000 additional bespoke training opportunities designed in partnership with employers (‘Sector-based Work Academy Programmes’) with guaranteed job interviews
Fully funded apprenticeship training costs to eligible 16-24 year olds by removing the need for non-levy paying employers to co-fund
Expansion of foundation apprenticeships into sectors such as hospitality and retail
A Jobs Guarantee scheme to provide six months of paid employment for long-term unemployed 18-21 year olds on Universal Credit

Tipping

New laws on tipping were introduced in October 2024, which regulate how employers allocate tips, gratuities and service charges among workers and eligible agency workers (see here for an article we wrote at the time). As part of this, employers are required to introduce a written tips policy where qualifying tips, gratuities, and service charges are paid on more than an occasional and exceptional basis.

The ERA 2025 strengthens this by requiring employers to consult with either recognised trade union representatives or workers’ representatives or (where there are no representatives) workers directly affected by the policy before preparing a first draft tipping policy and when reviewing such policy. Any tips policy must also be reviewed every three years from first implementation. Employers will also be required to make an anonymised summary of the views expressed in the consultation available to all workers of the employer at the place of business where the tips policy applies.

A consultation was launched on 5 February 2026 seeking views on the new consultation requirements and review of tipping policies, including the steps that should be taken when consulting and any potential challenges that employers will face in consulting with workers. The consultation also requests feedback on the statutory Code of Practice on fair and transparent distribution of tips.

Timing and developments

Statutory sick pay

The Government has said that this measure will take effect in April 2026.

Minimum wage

Rates increased on 1 April 2025 and will increase again on 1 April 2026.

Tax and NICs

Timings vary see above.

Unpaid internships and apprenticeships

Call for evidence launched on 17 July 2025 and closed on 9 October 2025 and its response was published on 27 February 2026.

Tipping

Included in the ERA 2025. A consultation was launched on 5 February 2026, which will be open until 1 April 2026. The Government’s updated timeline indicates that measures in respect of tipping will take effect in October 2026.

Sources

Announcement on 30 July 2024 and call for evidence, Skills England Report, SSP Consultation on 21 October 2024, Response to SSP consultation 4 March 2025, Autumn Budget 2025, Government Factsheet: Tips and gratuities, Government Business Guidance on National Minimum Wage, Consultation on strengthening the law of tipping, Making Work Pay: call for evidence on unpaid internships government response.

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Reform Hub

Government Policy Reform

Significant employment law changes are coming through the Employment Rights Bill and beyond.

Explore our Reform Hub to stay ahead of the curve.

Key Developments

Navigating the hub

Reform Hub

Key Developments

ERA 2025

Other employment reforms beyond the ERA 2025

Timings

ERA 2025

Reforms using existing powers or other means

Equality (Race and Disability) Bill

Other longer-term reforms

Unfair Dismissal

Timing and developments

Fire & Rehire

Restricted variations

Non-restricted variations

Replacing employees with non-employees

Timing and developments

Redundancy Collective Consultation

Trigger for collective redundancy consultation obligations

Penalties

Timing and developments

Collective Bargaining & Trade Unions

Employers will have a legal duty to give workers a written statement that informs the worker they have the right to join a trade union.

Timing and developments

Independent trade unions have new broad rights to request access

Timing and developments

Reforms to statutory recognition processes

Timing and developments

Changes to industrial action ballots and other reforms

Timing and developments

New trade union rights and protections

Timing and developments

Other changes

NDAs, Whistleblowing, Discrimination & Harassment

Whistleblowing

Timing and developments

NDA restrictions

Timing and developments

Third party harassment

Timing and developments

Sexual harassment

Timing and developments

Public sector socio-economic duty and dual discrimination

Timing and developments

Enforcement

Single Enforcement Body and Enforcement Powers

Timing and developments

Regulatory Enforcement Unit for Equal Pay

Timing and developments

Employment Tribunal

Timing and developments

Collective Grievances and Compensation Caps

Timing and developments

Statutory Sick Pay

Timing and developments

Zero-hour Contracts

Guaranteed hours offers

Notification of shifts

Application to agency workers

Timing and developments

Umbrella Companies

Timing and developments

Family Friendly Rights

Pregnancy/ maternity related dismissals

Timing and developments:

Day one paternity leave and parental leave and bereaved partner’s paternity leave

Timings and developments:

Parental leave system

Timing and developments:

Paid carer’s leave

Timing and developments:

Bereavement leave

Timing and developments:

Time off for public duties

Timing and developments: