At a Glance
Last week the Government published updates to the implementation timetable for the Employment Rights Act 2025 (‘ERA 2025’), alongside five new consultations on some of the workplace reforms in the ERA 2025. These developments provide further clarity on when businesses can expect the reforms to take effect and provide some insight as to how the Government plans to move forward on some of the currently uncertain areas. We summarise the developments below.
Updated Implementation Timeline for ERA 2025 Reforms
Back in July 2025, the Government published a roadmap to implementation of the ERA 2025. Last week, the Government published a revised timeline. You can see the timeline for the ERA 2025 reforms on our Reform Hub, but we set out the key developments from the latest published timeline below:
- Six key reforms, previously anticipated for April, are now expressly scheduled to take effect on 6 April 2026. These include:
- Doubling of the collective redundancy protective award
- Whistleblowing reforms for sexual harassment
- Statutory Sick Pay (‘SSP‘) reforms
- Voluntary gender equality action plans
- Menopause guidance (this is a new addition to the timeline, but is something that had been promised as part of the Government’s Plan to Make Work Pay)
- Simplified trade union recognition procedures
- On 7 April 2026, the new Fair Work Agency will be formally established. We are expecting the implementation will follow in phases, with further details expected to be published in due course
- The introduction of electronic and workplace balloting has been delayed and is now being brought in in phases, with electronic and workplace balloting for statutory trade union ballots now expected in August 2026 and for union recognition and derecognition ballots in 2027
- The enabling power allowing regulations to specify what constitutes “reasonable steps” to prevent sexual harassment has been brought forward to October 2026, earlier than the previously anticipated 2027 date. However, the updated timeline indicates that specific steps that are to be regarded as “reasonable” to determine whether an employer has taken all reasonable steps to prevent sexual harassment will take effect in 2027 (which is after when the preventative duty to prevent sexual harassment increases to “all reasonable steps” in October 2026)
- Protections relating to fire and rehire practices have been pushed back from October 2026 to January 2027
New Government Consultations Launched This Week
Alongside the timeline updates, the Government has issued five new consultations. These consultations provide insight into likely future reforms and highlight areas where employers may wish to submit views. We cover these off briefly below.
1. Fire and Rehire – Restricted Variations (published 4 February 2026)
The ERA 2025 is introducing new provisions aimed at limiting the practice of fire and rehire as a way of changing terms and conditions of employment where employees do not agree to changes. One of the changes to be implemented under the ERA 2025 is that a dismissal will become automatically unfair if the reason or principal reason for the dismissal is that the employer sought to make a “restricted variation” (unless the employer can meet the significant financial difficulty exemption). We write about this in more detail in our Reform Hub.
Under the ERA 2025 the scope of restricted variations can be narrowed through regulations in some parts. One such category of restricted variation under the ERA 2025 is changes to pay, which is drafted widely to encompass “any sum payable to an employee in connection with the employment”. However, the legislation specifically provides that the Secretary of State may exclude certain payments from this category, including expenses, payments or benefits in kind.
The recent consultation explores whether changes to expenses, benefits or payments in kind and shift patterns should qualify as “restricted variations” within the new fire and rehire protections. The Government has put forward two options for each category, but has indicated a preferred way forward, which seeks to make sure these protections are “proportionate”, as follows:
- Expenses and benefits: The Government’s preferred position is narrow, and it proposes that all expenses, benefits, and payments in kind should be excluded from the definition of “restricted variation” in relation to sums payable to an employee in connection with the employment. This would allow such expenses and benefits to be reduced or removed by employers via fire and rehire without triggering automatic unfair dismissal (although ordinary unfair dismissal may still be claimed with the new enhancements inserted into the ERA 2025 which take account of statutory factors when a tribunal is assessing the fairness of a dismissal)
- Shift patterns: The Government’s preferred option is again fairly narrow, and would treat changes from day to night working (and vice versa), as well as weekday to weekend working, as “restricted variations”. They have clarified that it would not be a restricted variation if shifts are changed so that an employee works more hours at night or on the weekend when they already have this type of working pattern
The consultation is open until 1 April 2026, and responses can be submitted online here.
2. Trade Unions – E-Balloting and Unfair Practices (published 4 February 2026)
The ERA 2025 makes several changes to the statutory trade union recognition process, as well as paving the way for electronic balloting for statutory trade union and recognition/derecognition ballots.
As part of these reforms, the Government has updated its draft Code of Practice on Access and Unfair Practices. This consultation covers both the revised Code of Practice and also proposals on unfair practices in electronic ballots, in particular to prevent interference in recognition and derecognition ballots once electronic balloting is permitted.
The consultation is open until 1 April 2026, and responses can be submitted online here.
3. Flexible Working – New Consultation Requirements (published 5 February 2026)
As part of the ERA 2025’s reforms to flexible working, the Government has the power 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 requests before refusing a flexible working request.
This consultation outlines proposals to provide additional structure around the process employers must follow when handling flexible working requests, including:
- Requiring a meeting with the employee within six weeks of the request, with 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 whether the employee wishes the request to be treated as a reasonable adjustment
- A record of the meeting and the final outcome must be provided to the employee in writing
The consultation closes on 30 April 2026, and responses can be submitted online here.
4. Tipping – Strengthening the Law on Tips (published 5 February 2026)
The ERA 2025 will require employers to consult with affected workers 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.
This consultation seeks views on effective approaches to consulting with workers and reviewing tipping policies. It also asks for feedback on the statutory Code of Practice concerning fair and transparent distribution of tips and non-statutory guidance.
The consultation closes on 1 April 2026 and responses can be submitted online here.
5. Umbrella Companies and Agency Framework (published 6 February 2026)
The ERA 2025 includes provisions to expand the definition of ‘employment business’ in the Employment Agencies Act 1973 to include umbrella companies, bringing umbrella companies within the scope of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (‘Conduct Regulations’) and state enforcement.
This consultation proposes amendments to the statutory framework governing the agency work market, including in particular the Conduct Regulations, as well as seeking views on aspects of the Agency Workers Regulations 2010. The Government has indicated that the current regulatory framework does not accurately regulate the activities of umbrella companies or reflect the realities of the modern labour market.
The consultation therefore seeks views on a number of proposed changes, focusing on three overall objectives of (i) increasing security in the agency worker market (ii) increasing transparency for agency workers, and (iii) allowing for genuine choice within the temporary labour market. It also seeks views on further opportunities for modernisation.
By way of example:
- To increase security for agency workers, one of the changes proposed seeks to ensure that agency workers are always paid for work completed, including in circumstances where the umbrella company may not have received payment from an employment business. It also asks for views on whether the government should make changes to the 12-week qualifying period after which agency workers are currently entitled to equal basic working and employment conditions (including equal pay) as directly employed workers
- To promote transparency, one of the proposed changes seeks to provide clarity for workers about the hirer they are assigned to and the role, providing them an opportunity to agree a rate of pay with the employment business before accepting an assignment and being informed of any deductions to their pay. The proposed changes would also require a work-seeker to be informed of the type of contract they will be engaged under (i.e. whether they are an ‘employee’ or ‘worker’) and the implications of this for their employment rights and tax status
- To allow agency workers more choice within the market, the changes propose to extend protections against detriment following a work-seeker terminating their contract with an employment business or agency to include those contracted with an umbrella company
The consultation closes on 1 May 2026, and responses can be submitted online here. 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.
Helping Employers Prepare
With the range of changes coming in under the ERA 2025, Littler can help you to:
- Identify and evaluate the specific risks and implications of the ERA 2025 and related reforms for your business
- Address and prioritise any compliance gaps
- Create a tailored, pragmatic action plan and advise your business on implementing any necessary changes
Please contact your usual Littler contact if you would like any support and for any client training queries, please contact Natasha Adom.
