Employment Rights Act: What employers need to know

Employees will qualify for unfair dismissal protection after six months of service, except in cases of automatically unfair or discriminatory dismissal.

The cap on compensation is expected to be lifted after the government has carried out and published an impact assessment. These changes makes probation, performance management, and consistent documentation essential.

Launching in April 2026, the Fair Work Agency will enforce compliance on:

• Holiday pay
• Minimum wage
• SSP
• Worker exploitation

Organisations must ensure payroll, working time records, and compliance systems are robust.

Some leave entitlements will be available from day one of employment:

• Paternity leave and unpaid parental leave: Employees can take leave from day one, but pay still requires qualifying service.
• Bereavement leave and pregnancy loss leave: Planned for 2027. Employees will be able to take unpaid leave for the death of a relative or pregnancy loss. Regulations are still being finalised, but organisations should prepare policies in advance.
• Protections for employees during pregnancy and family-related leave are also being strengthened, including a protected period after returning to work.

Employees can submit flexible working requests from day one. Employers must:

1. Consult with the employee before refusing
2. Provide clear reasons for any refusal
3. Demonstrate that any refusal is fair and reasonable

This change focuses on consultation and transparency, not automatic entitlement.

By 2027, workers on zero, low, or irregular hours will have a right to a guaranteed hours offer reflecting their recent work patterns. Employers must:

1. Provide reasonable notice for shifts
2. Compensate employees for cancellations or curtailed hours
3. Ensure agency workers receive similar protections

This is a major shift for organisations relying on flexible or just-in-time staffing.

NDAs cannot prevent employees from reporting harassment or discrimination.

Reporting harassment qualifies as a protected whistleblowing disclosure.

Large employers will need to publish annual equality action plans, covering gender equality, menopause support, and menstrual health.

Trade unions gain:

1. Stronger access rights to workplaces
2. Simplified recognition processes
3. Enhanced protections for members

Employers must remind workers of their right to join a union. Organisations should expect increased union engagement, especially in workplaces with pay disputes or high turnover.

The Act restricts dismissals followed by re-engagement on new terms. Automatic unfair dismissal grounds now apply unless the employer can demonstrate severe financial distress. Employers will need evidence, documentation, and thorough consultation before making changes.

• Employment tribunal time limits: Most claims extend to 6 months, wrongful dismissal remains 3 months
• Public sector outsourcing: Ensures parity of treatment and prevents two-tier workforce arrangements
• Tips and gratuities: Employers must consult with staff or unions on policies and publish a summary of feedback