FAQs on the Employment Rights Act and other employment policy changes

To support employers with their preparations, we have answered some frequently asked questions that we have received, grouped by topic area below.

Quick links by topic

Flexible working

An additional requirement that it must be “reasonable” to refuse the request on one of the eight existing statutory grounds.

Will the statutory reasons for refusing a flexible working request remain the same?

Yes, the current eight statutory business reasons for refusal remain unchanged.

Our business requires attendance in the office and we no longer permit home working. How do the flexible working changes impact us managing this?

The existing statutory reasons for refusing flexible working won't change, but the reasonableness of the refusal is new. This is something for your business to consider in relation to this policy and why it says it is “reasonable” to apply any statutory business reason(s) for refusing home working. However, it is important to note that the penalties (currently eight weeks’ pay) will not change. Employers should also assess the impact of any policy on any protected groups and be mindful that discrimination claims are often brought alongside claims under the flexible work regime (for which compensation is potentially uncapped).

The government had stated that flexible working would become the “default position”? Is that what the new provisions achieve?

No. Although the government pledged to make flexible working ‘the default’, the right to request flexible working will remain a ‘right to request’ and not an absolute right to receive it.

What if an employer reaches a critical mass and cannot support more flexible working - will that amount to a “reasonable” refusal?

In terms of the new “reasonableness” test for an employer’s refusal on one of the statutory grounds, it’s not currently clear how this would be assessed by an employment tribunal i.e. could the test be similar to that for unfair dismissal (a band of reasonable responses)? Would a reasonable refusal take into account the employer’s needs only, or those of the employee too? Notwithstanding this current lack of detail, you would need to be thinking about (and evidencing) the statutory business reason as to why you cannot accommodate further requests and why you say this is reasonable. We should know more when the consultation is published (expected winter/early 2026). The current Acas guidance (which accompanies the Acas code of practice on flexible working and might be subject to updates) deals with the issue of receiving multiple requests for a similar change. It suggests considering each request in the order your receive it and acknowledges you might not be able to accept everyone’s request, encouraging employers to talk to employees about alternatives and try and find a compromise. It is not for the employer to make a value judgement in such circumstances as to whose request is more important/pressing.

Pregnancy, maternity and other leave

New dismissal protections.

Will there be an outright ban on dismissing pregnant employees and those on maternity and other types of leave / on return from those types of leave?

We don’t have this detail as yet – this will be set out in further regulations. However, an outright ban appears unlikely, reflecting a recent government consultation which seeks views on narrowing or removing some of the current fair dismissal reasons (such as limiting conduct dismissals to gross misconduct only), or introducing a stricter dismissal test.

Paternity and unpaid parental leave

Making these a day-one right.

In relation to parental leave from day one, is that parental leave only or does this apply to all statutory family leave as well as statutory pay from day one?

The new legislation makes statutory paternity leave and unpaid parental leave a day one right only. A minimum service requirement for statutory paternity pay still applies (26 weeks’ service at the “qualifying week”, which is the 15th week before the baby is due), as well as other eligibility requirements. Parental leave is unpaid and this remains the case under the new rules. The government is conducting a wider review of the family leave and pay system, which is due to conclude late 2026, so further reform is possible.

Do day one rights to paternity leave mean that employees must be given access to occupational paternity payments from day one or is the discretion still with the employer to have a minimum service time to qualify for these?

The statutory entitlement to paternity leave becomes a day one right only. Statutory paternity pay has a minimum service requirement (26 weeks’ service, as above) and employers can provide enhanced paternity pay at their own discretion.

Bereavement leave

A new right to unpaid bereavement leave.

Will there be an entitlement to bereavement leave for pre-24 week pregnancy loss?

Yes. The right to unpaid bereavement leave is being extended to employees who have suffered “pregnancy loss”, defined as pre-24 week pregnancy loss, or the failure of an embryo to become implanted following a transfer. A government consultation considers issues such as eligibility, notice, duration and more.

Unfair dismissal

Reduce the qualifying period from two years to six months and abolish the compensation cap

Will the qualifying service change impact only new, or also existing, employees?

The government has stated that it will apply to all employees with the requisite service upon implementation, and to others, new starters and existing, as soon as they reach six months. The wording of the implementation order should be checked to confirm this approach.

Despite the abandonment of day one unfair dismissal rights, will this change still require employers to re-assess their probationary arrangements?

Yes. Probationary terms, and disciplinary/performance management processes, should be reviewed to reduce the risk of unfair dismissals, given the significantly reduced qualifying period for unfair dismissal and the removal of the compensation cap.

Will more employees qualify for statutory redundancy pay as a result of these changes?

No. The two year qualification for statutory redundancy pay is unaffected

“Fire and rehire/replace”

Automatic unfair dismissal protection and risks of increased compensation.

Could small modifications to an employment contract be viewed as an automatically unfair fire and rehire situation (e.g. if there are minor changes to the contract and pay is not impacted)?

Unless the employee fails to agree to a “restricted” variation and the employer responds by terminating the contract, this situation is unlikely to trigger the automatically unfair dismissal protections. This is because, in broad terms, the new fire and rehire rights cover dismissals for failing to agree to a “restricted” contract variation, or to enable the employee to be re-engaged or replaced by another under a varied contract which includes a restricted variation (subject to a narrow justification). A restricted variation includes pay or time off reductions and changes to hours/shifts.

The automatically unfair dismissal protection may not apply if an employer can show serious financial difficulties and more. Does this require the whole business to be facing financial difficulties, or can it apply in a more siloed way, such as a where a division is subject to viability challenges?

The wording of the legislation is not sufficiently clear on this point and it may only be clarified in case law. The government’s factsheet appears to assume financial difficulties affecting the whole employer, not merely a division of that employer, but the updated Code of Practice (to follow) may provide guidance on this point. Note that public sector/local authority employers have a different definition for financial difficulties. An anticipated consultation may also provide further insight.

Can fire and re-hire rights apply to constructive dismissals?

In principle, yes - a constructive dismissal can be a qualifying dismissal (and if the other conditions for an automatically unfair dismissal are met in a fire and rehire situation).

Might these fire and rehire changes potentially result in differing terms and conditions across workforces? Such as where an employer agrees changes with some employees, not others - and decides to take no further action against those refusing – and recent recruits start on the new terms?

Depending on the circumstances and in the absence of employee agreement to a contractual change, this is a possible outcome. However, it raises other risks (equality, fairness, employee relations etc) and may not be a practical option.

Are flexibility clauses one way of reducing the risk of the fire and rehire changes?

In principal, yes, but the Employment Rights Act contains an anti-avoidance provision. This is because, if a change is already permitted by the contract (by a lawfully drafted flexibility clause), additional employee consent is not required - potentially placing the employer’s changes outside of the fire and rehire changes. However, the Act addresses this by making the introduction of flexibility clauses on the topic of a restricted variation, itself a restricted variation. However, this does not appear to deal with flexibility clauses which pre-date the Act.

Collective redundancy consultation threshold

The duty to collectively consult on redundancies is widened with a new trigger threshold.

Is the trigger for collective consultation limited to a single employing legal entity, as was the situation before the Employment Rights Act’s changes?

Yes, it is limited to an employer entity – not, for example, aggregated across a group.

Will these changes result in more employer collective redundancy consultation?

Currently, small-scale redundancy proposals across multiple locations do not, typically, trigger collective consultation. Such proposals in aggregate may meet the new threshold to consult. However, it does depend on how the threshold is defined and we await draft regulations for clarity.

Collective redundancy protective award

The maximum award for non-compliance doubles.

Has the protective award for a failure to collectively inform and consult under TUPE remained the same, despite the maximum redundancy protective award rising from 90 days’ to 180 days’ pay?

The Employment Rights Act does not change the TUPE protective award. However, the government has committed to reviewing TUPE as well in due course, which may result in this changing.

Harassment

Sexual harassment: employers to take “all” reasonable preventative steps; all protected characteristics: liability for third-party harassment introduced.

Who is classed as a “third party”?

The Employment Rights Act defines this very widely as a person other than the employer or one of its employees. This will include, for example, customers, clients, contractors, suppliers or agency workers.

How are employers supposed to police third parties, particularly in sectors where the workforce frequently interacts with the public?

An employer is liable if a third party harasses an employee in the course of their employment and the employer failed to take “all reasonable steps” to prevent this from happening. The government has stated that reasonable steps, in respect of the actions of third parties are “clearly more limited than the steps they can take in respect of their employees”. It gives the example of an employer needing to consider the nature of any contact with third parties, including the type of third party, frequency and environment. It has said employers will not be penalised for failing to anticipate the wholly unforeseeable. Thorough risk assessment of where and how these risks might arise, and the steps taken to mitigate those risks, will be essential.

The duty to take reasonable steps to prevent sexual harassment is fairly recent (October 2024) – what does the addition of “all” reasonable steps actually mean in practice for employers and what extra steps will employers need to take to prevent sexual harassment, in addition to what they are doing now?

The Employment Rights Act does currently not currently detail what steps will be reasonable for an employer to take. However, it does provide for future regulations to specify reasonable steps which an employer must take, and matters to which they must have regard, to prevent sexual harassment (expected in 2027). In addition, employers will be required to take all other preventative steps that it is reasonable to take in the particular circumstances – so it will also depend on the type of employer, environment, workforce, and more. It may take further case law to develop specific guidance on particular scenarios. The EHRC’s existing technical guidance, which provides employers with advice on steps they can take, may also be updated.

Whistleblowing

Disclosure of sexual harassment to be explicitly protected.

What steps will employers need to take to comply with this new provision?

Although complaints of sexual harassment may already qualify as protected disclosures under existing law, the new provision confirms this explicitly. Employers should consider if it is necessary to update whistleblowing policies and staff training and ensure that there is a clear process in place for reporting, investigating and responding to complaints of sexual harassment.

Equality action plans

Large employers to publish equality action plans showing steps they are taking in relation to gender pay gaps and menopause; and, publish equality information relating to outsourced workers.

Large employers are those with 250 or more employees: is that only based on UK employees or globally and what if there are different legal entities within a group?

We await the detail here but, assuming the government will translate similar concepts from other provisions, the threshold of 250 or more employees is likely include UK employees only. Each individual company in a group is considered as a separate entity for these purposes.

How regularly will employers need to publish their equality action plans?

This is expected to be an annual reporting duty.

What should an equality plan include?

Employers must include the measures they are taking to address the gender pay gap and to support employees going through the menopause. The government will consult on regulations containing further details for employers. The government has also said it will provide employers with information and guidance about evidence-based effective actions. Employers should therefore await further updates.

The government has promised to introduce mandatory disability and ethnicity pay gap reporting and equal pay rights – are these within the Employment Rights Act?

No, these measures will be set out separately within the Equality (Race and Disability) Bill, which is expected to be published soon. The government has consulted on mandatory ethnicity and disability pay gap reporting and separately launched a call for evidence covering issues such as equal pay rights – the consultation and call for evidence are now closed and the outcome of these will inform the measures to be set out within the upcoming Bill.

How regularly will employers need to publish equality information relating to outsourced workers?

As above, this is also expected to be an annual reporting duty.

What information will employers need to provide?

Employers will need to publish information about the service providers with whom they contract, but the detail of exactly what they need to set out will be confirmed in further regulations. The government’s stated intention is to “hold employers accountable…and motivate them to support efforts to improve gender equality in organisations they are linked to”.

Trade unions: right of access

A right to negotiate workplace access agreements, to allow officials to meet, support, represent, recruit or organise workers or to facilitate collective bargaining.

Does the new right cover only physical access, or access digitally (e.g. via emails/ intranet, etc)?

Access includes physical entry into a workplace and/or communication with workers by any means, including digitally.

Can an employer refuse access (e.g. if there are existing unions already recognised)?

There is a presumption in the Employment Rights Act that a union will be granted access and an employer should only refuse where it is reasonable in all the circumstances to do so. Regulations (to follow) are expected to provide further detail on reasonableness, following a late 2025 consultation. In the consultation, the government proposes that where an employer already recognises an independent trade union to negotiate on behalf of the group of workers in question, the CAC should consider that a reasonable basis on which to refuse access documents (although it is not required to refuse on this ground).

Trade unions: statutory recognition

Significant changes to the statutory recognition procedure.

How are the criteria that a trade union must meet, when applying for statutory recognition, changing?

In broad terms, the Employment Rights Act reduces these requirements (e.g. no longer requiring that a union is likely to have support from the majority of the bargaining unit, removing the 40% support threshold in a recognition ballot and potentially reducing the 10% membership support condition).

Does the option remain for both parties to agree a voluntary recognition agreement, not involving the statutory recognition rules?

Yes, voluntary agreements continue to be an option.

If an employer already has a voluntary recognition agreement, must it consider applications for statutory recognition from other unions?

In certain circumstances, a non-independent union may no longer “block” an application for recognition from a union that has a certificate of independence (conditions apply). As a result, if the necessary conditions are met, the employer may be required to recognise the independent union.

Industrial action

Reducing the rules regulating industrial action; providing for e-balloting.

Given the number of industrial action changes, what are their cumulative impact on affected employers?

The changes make it easier and cheaper for unions to organise strikes (e.g. repealing the ballot thresholds and doubling, from 6-12 months, the ballot mandate). They will present employers with increased operational challenges, legal risks and will affect contingency planning (e.g. by reducing the requirement on unions to share information, such as in the ballot notice, and strengthening protections for workers taking industrial action).

Trade unions: individual rights and protections

Individual union-related rights and protections are strengthened, including time-off rights.

What is the role of the new trade union equality representatives?

Union equality representatives are part of the government’s aim of “strengthening equality at work for all”. As well as promoting equality, arranging training and analysing equality data, reps may provide members with equality advice and support.

For employers with existing time-off agreements for union officials, does the Employment Rights Act make any practical changes on the ground?

Yes, existing time off arrangements (and how they are implemented locally by managers) should be reviewed for compliance. Employers should raise awareness among those managing time off of changing requirements, including the need to evidence that time off was not reasonable - in the event of a refusal.

Duty to inform workers of their right to join a trade union

Does the duty to inform workers of their right to join a trade union apply to employers that do not currently recognise a trade union?

Yes, it applies to both unionised and non-unionised workplaces (with some small exceptions).

Fair Work Agency

Single enforcement body with enhanced powers.

Are the Fair Work Agency’s (FWA) new enforcement powers much wider than those existing previously, before the Employment Rights Act (such as those exercised by HMRC and the Gangmasters and Labour Abuse Authority)?

The FWA has new enforcement capabilities, e.g.: the scope is widened to include holiday entitlements, sick pay, umbrella companies and zero and low hour rights (to follow); the power to issue underpayment notices is extended; and, new powers will permit it to bring tribunal proceedings in place of a worker across a broad range of rights, to provide legal assistance and to recover enforcement costs in some situations. However, we anticipate the FWA may transition into exercising its new powers as it establishes itself as a new body.

Who will regulate the FWA?

The Secretary of State. They will be assisted by a newly appointed advisory board and must publish a three year proposal setting out how enforcement powers will be exercised.

Will the FWA be adequately resourced?

The government has committed to providing sufficient resources to support effective and strong enforcement by the new agency. However, no details have been given against the backdrop of tight public spending pressures.

Employment tribunal time limits

A doubling of the ET time limit to six months.

This change, and other new rights under the Employment Rights Act, will potentially result in an increase in employment tribunal claims. How has the government said they will manage this, given the existing backlog of cases?

During parliamentary debates this was raised as a concern. The government stated that it is looking at ways to ensure that the tribunal system is able to deal with additional claims. In the meantime, it is recruiting more judges.

Zero hour and low hours contracts

Right to guaranteed hours; reasonable notice of shifts and any shift changes;payment for cancelled, moved or curtailed shifts; rights for agency workers.

Does the employer automatically have to offer a guaranteed hours contract or is it only triggered by employee request ?

The duty is on the employer to make the guaranteed hours offer.

Will a “qualifying worker” include a bank worker?

Potentially - if the bank worker has a zero hours contract, or is working under a zero hours arrangement, or has a “low hours” contract (threshold to be specified) where they work more than their contractual hours during the reference period, then, yes, they would be a “qualifying worker” and entitled to be offered a guaranteed hours contract.

Will annualised hours contracts be caught by these provisions?

Yes, potentially. For annualised hours contracts there is a complicated pro rata calculation formula within the Employment Rights Act. The formula takes the worker's guaranteed hours and calculates them pro rata to the length of the reference period, with that number of apportioned hours being used as a notional number of guaranteed hours during the reference period. We’d suggest taking advice if you have annualised hours arrangements.

Do we have any idea what the “low hours” threshold might be?

This will be subject to consultation, expected soon. During parliamentary debate, 16 hrs per week is a figure that has been mentioned by government ministers but is not confirmed/will be consulted upon.

Does the worker have to be employed for 12 weeks before being eligible to receive a guaranteed hours offer?

Although we don’t currently know the length of the reference period (this is subject to further consultation), the government has indicated that 12 weeks is its preference. The duty to offer guaranteed hours arises after the end of an initial reference period, or each subsequent reference period. So, yes if the reference initial/subsequent period is 12 weeks, the worker would need to be employed for that period for the duty to be triggered. It is possible that employers who structure their engagements such that the 12 week period is never reached (which, of course, has practical limitations) may face arguments that they have breached the broadly drafted anti-avoidance provisions in the Act.

Is there any indication of when these reforms will come into force?

Further consultations are expected, followed by regulations to confirm the outstanding details. The measures will not take effect until 2027.

How will we deal with fluctuating demands? What if we have to offer guaranteed hours and then subsequently don’t need them?

An employer may be able to offer a fixed-term contract, or make a fixed-term guaranteed hours offer where it is “reasonable” to use a fixed-term contract. This provides a potential route to manage short-term demand. The ability to offer fixed-term contracts/guaranteed hours offers will not cater for all scenarios, however (such as unpredictable fluctuations). Employers may need to consider other engagement models. If all other options have been exhausted and the employer remains overstaffed as a result of guaranteed hours offers, employers may also need to consider redundancies and seeking to reduce hours for all workers/employees.

We have a high number of zero hours workers and the fluctuating nature of their work means that any guaranteed hours are going to be challenging to commit to. Any suggestions of what we could be doing now to prepare for these changes?

Although employers await further information to fully assess the impact of the changes (e.g. who is a 'low hours' worker), employers may want to review engagement models and take advice on potential alternative models. Ensuring that you have in place a proper mechanism for recording hours worked and when for zero hours workers will also be important.

Is one alternative for employers (to avoid the administrative burden and likely enhanced litigation risks) to use self-employed contractors only?

This would be one potential alternative route (subject to the individual being genuinely self-employed). Employers need to consider these provisions and related reforms in the Act as a ‘package’ and you should also consider the promised reform of employment status, which we expect to progress before the next general election. There is also an option to exclude/modify the rights via collective agreement (with trade unions). In the case of agency workers, the agreement would be with the worker’s ‘employer’ and the union/s. Of course, such an approach needs to carefully considered as part of your industrial relations/worker engagement strategy.

If a fixed-term is shorter in length than the reference period, presumably the rules still apply?

The duty to make a guaranteed hours offer may not apply in certain circumstances and this includes where the contract terminates by virtue of a limiting event/task and it was reasonable for the contract to have been entered into as a fixed-term contract. The anti-avoidance provisions (which are very broadly drafted) should also be noted.

Once there is an idea on what ‘low hours’ is would it be advisable to just offer contracts that exceed that, to reduce the burden?

This would be an option open to employers. The duty wouldn’t apply if the contractual hours offered exceeded the low hours threshold. Of course, you would need to consider the risk of not having the work to occupy the worker during those hours.

As agency staff are engaged by the agency and not the end hirer, does the end hirer have to make the guaranteed hours offer (even though they are not directly employing the agency worker)?

Yes, if the agency worker is a qualifying worker and the duty to make a guaranteed hours offer arises, then that duty falls on the end hirer, rather than the agency. This will result in the end hirer making the agency worker an offer of guaranteed hours and the agency worker becoming directly engaged by the end hirer.

What are the provisions for workers who work for multiple agencies? Is there a threshold on the hours they can work across different agencies, and where does the liability lie?

There are no specific provisions addressing workers working for multiple agencies.

In terms of who is a qualifying agency worker, there will also be a “low hours” threshold which applies to them. However, this threshold will apply in terms of the hours worked by the agency worker for the end hirer during the reference period and it will be the end hirer who has responsibility for making the guaranteed hours offer. It is very likely that all hours worked for the hirer (through multiple agencies) will count towards the hirer’s obligation.

In a similar way, the worker working for different hirers could acquire rights to guarantee hours offers from multiple hirers. The worker does not have to accept any/all of any offers.

Is the reasonable notice of shift/cancellation just for zero and low hour workers or is it for all workers?

These rights will apply to zero-hours workers, zero-hours arrangements, and a further category of low hours or low paid workers to be determined in further regulations which may set a threshold in terms of both low hours and low pay. It is not known if the low hours threshold will be the same as that for guaranteed hours, but this seems logical. The rights will apply to those low hours/low paid workers (as to be defined) with no contractually agreed work times/patterns, as well as those with contractually agreed times/patterns who are offered shifts outside of those times/patterns.

If the worker is given less than "reasonable notice" can the worker still take the shift if they agree to it?

Yes. They can still bring a claim but the employer may be able to set off money paid for the shift against the compensation due (which in any case won't exceed the pay they would have received for the shift).

Are there any thoughts around how payments for cancelling of shifts might be expected to work in sectors where short notice requirements are commonplace?

An employer will be required to make a payment to a worker where there shift is cancelled, moved or curtailed at “short notice”. What constitutes short notice is yet to be defined. A payment will not be due in “specified circumstances” (also to be defined) and so there might be some exemptions here for employers to reply upon once we get the further detail in regulations.

Do you anticipate that the right to reasonable notice of shift cancellations might apply to agency workers where assignments are terminated without notice?

If the termination of the assignment also results in the cancellation of shifts, then the employer will also need to consider the right to reasonable notice of cancellation of shifts.

Are all agencies included? E.g. An agency that has a platform and app that acts as a flexible service connecting individuals with businesses. The agency employs the individual and pays them directly. Do the zero hour proposals apply to these individuals and shift notice/cancellations etc?

“Work-finding agency” is broadly drafted and means a person carrying on the business (whether or not with a view to profit and whether or not in conjunction with any other business) of finding, or seeking to find, work for individuals to do for and under the supervision and direction of other persons (but not in the employment of those other persons). In the EU, this arrangement may well be caught by the Platform Workers Directive.

Statutory sick pay

Extending entitlement to SSP.

How is statutory sick pay (SSP) changing?

The Employment Rights Act makes SSP available from the first day of illness and removes the lower earnings limit. The rate of SSP is set at either the flat rate in force from time to time or 80% of the employee’s average weekly earnings, whichever is lower. Whilst a simple change from a legal perspective, this may well have a significant financial impact on employers.

Timings and jurisdictional scope

Implementation In relation to the Employment Rights Act, will the provisions come into force as and when, or is it likely to follow the common commencement dates (April and October)?

The government has confirmed that the Act’s measures will take effect in phases, with the common commencement dates used to commence the majority of the changes (6 April and 1 October). In its implementation roadmap, it anticipates many taking effect in April/October 2026, with some important changes delayed until 2027. An exception is unfair dismissal which is anticipated to take effect on 1.1.27. Also, some industrial action changes are implemented immediately on Royal Assent or after two months.

Next steps What should employers expect next to prepare for the progressive implementation of the Employment Rights Act?

Further consultations and regulations are promised before many of the Act’s changes can be implemented. In addition, some will require Codes of Practice and other guidance to be written or updated. This process will last for months, as reflected in the above roadmap. In addition, employers should be aware that the government has promised changes beyond the Act, including a review of TUPE, a consultation on workplace AI and on worker status.

Are there any differences in how the Employment Rights Act is applied in Scotland, Northern Ireland and Wales?

Many of the changes in the Act apply to England, Scotland and Wales but some elements do not, reflecting devolved powers particularly in Northern Ireland. For example, the School Support Staff Negotiating Body provisions apply to England. However, the Act does contain specific measures to apply the SSP changes to Northern Ireland.

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