The Employment Rights Bill (ERB) received Royal Assent in December 2025 and is now the Employment Rights Act (ERA). It will introduce the most extensive set of changes to employment law in England, Scotland and Wales in a generation.

The ERA is one of the central pillars of the Labour government’s 2024 election manifesto. It makes significant changes to laws governing pay, flexible working and employee rights, including rights to sick pay and protection against unfair dismissal. Other reforms will impact how employers manage industrial relations, address the gender pay gap, support employees through the menopause, and protect against the risk of sexual harassment.

The government has published its official roadmap, Implementing the Employment Rights Bill, which outlines exactly when these measures will take effect. You can find a link to the government roadmap at the end of this fact sheet.
This detailed fact sheet outlines the confirmed and anticipated changes across 2026 and 2027.

2026

Quarter 1: Industrial Relations & Trade Unions

2026 begins with the expected confirmation of significant changes to trade union legislation, which will remove barriers to industrial action.

• Industrial Action Protections: Dismissal for participating in industrial action will become automatically unfair, with the previous 12-week qualifying limit removed.
• Strike Mandates & Ballots:
• It’s expected that minimum service level rules for strikes will be removed.
• Industrial action mandates (the validity period of a ballot) will be extended from 6 months to 12 months.
• Ballots will only require a simple majority to pass.
• The notice period for industrial action will be reduced from 14 days to 10 days.
• Picket Supervisors: The legal requirement to appoint picket supervisors will be removed.

Quarter 2: The Compliance & Financial Shift

Q2, 2026, is the most critical period for payroll and compliance, as it introduces new enforcement powers. Certain "Day One" rights are also expected to take effect.

1. Statutory Sick Pay (SSP) Reform

Significant changes will affect eligibility, impacting margins for lower-paid temporary roles:

• Day One Right: The three-day waiting period is removed; SSP is payable from the first day of illness.
• Lower Earnings Limit Removed: The earnings threshold (currently £125/week) is removed. Workers earning below this may receive 80% of their weekly earnings or the standard SSP rate (whichever is lower).

2. "Day One" Family Leave Rights

Contracts and documentation will need to be reviewed and updated to reflect family leave changes:

• Paternity Leave: Will become a "day one" right, removing the 26-week qualifying period.
• Unpaid Parental Leave: Also becomes a "day one" right, removing the one-year service requirement.
• Shared Parental Leave: Restrictions on taking paternity leave after shared parental leave are likely to be removed.

3. The Fair Work Agency (FWA)

A new enforcement body is expected to launch, with robust powers to target non-compliance in holiday pay, SSP, and minimum wage.

• Look-back Period: The FWA can issue notices for underpayments going back six years.
• Penalties: Fines can be 200% of the underpayment, with a minimum of £100 and a maximum of £20,000 per underpaid worker.
• Proactive Powers: The agency can inspect workplaces and bring civil proceedings.

4. Additional Q2 Protections

• Whistleblowing: Sexual harassment will become a "qualifying disclosure," protecting whistleblowers from dismissal or detriment.
• Collective Redundancies: The maximum "protective award" for failure to consult increases from 90 days’ pay to 180 days’ pay.
• Gender Pay & Menopause: Voluntary action plans to address gender pay gaps and menopause support are expected to be introduced.

Quarter 4: Enhanced Liability & Tribunal Changes

Continuing on the theme of protecting worker rights, further changes are expected to take effect in October 2026

• "Fire and Rehire" Ban: Dismissing employees to rehire them on worse terms will become automatically unfair in most cases.
• Third-Party Harassment: Employers will be liable for harassment of their staff by third parties (e.g., customers, clients) unless they take "all reasonable steps" to prevent it.
• Tribunal Time Limits: The window for bringing most employment tribunal claims will extend from three months to six months.
• Trade Union Access: New duties will require employers to inform workers of their right to join a union and provide reasonable facilities for union reps.

2027

Reforms are expected to continue to be introduced throughout 2027 and beyond. However, many of these are still at the consultation stage and may change. Champion will issue regular updates as changes are confirmed, but we recommend that agencies and end hirers stay informed.

1. Unfair Dismissal Reform (expected January 2027)

• Reduced Qualifying Period: The eligibility for unfair dismissal protection reduces from two years to six months.
• Cap Removal: The statutory cap on compensatory awards is expected to be removed entirely, aligning with discrimination claims.

2. Zero-Hours & Shift Work

• Guaranteed Hours: Workers on zero-hours contracts will have the right to guaranteed hours if they choose, based on a reference period.
• Shift Cancellation: Workers must be compensated if a shift is cancelled, moved, or cut short at short notice.

3.  Flexible Working & Redundancies

• Flexible Working Refusals: Employers refusing requests must state their reasons and explain why the refusal is reasonable.
• Collective Redundancy Calculation: Employers must count redundancies across their entire organisation, not just individual sites, when determining if consultation rules apply.

4. Prevention & Response to Sexual Harassment

• Clarification of Reasonable Steps: It is anticipated that employers will receive clarification on what ‘reasonable steps’ mean for preventing sexual harassment.

5. Menopause & Gender Pay Gaps

• Mandatory Action Plans: Action plans for menopause and gender pay gaps will likely be made mandatory, following their voluntary introduction in April 2026.

6. Collective Redundancy

• Redundancies across the entire organisation: Employers will likely need to consider redundancy numbers across the organisation as a whole, rather than at individual workplaces.

7. Further Trade Union Changes

• Discrimination Against Trade Union Members: Laws are likely to be extended to protect trade union members.
• Modernisation of the Industrial Relations Framework: Introduction of a new and modernised IR framework to underpin trade unions.

8. Umbrella Company Regulation

• Expanded Definition: The legal definition of "employment agency" is expected to expand to include Umbrella Companies. This expanded definition will bring umbrella companies under the direct scope of enforcement bodies, ensuring greater compliance and standardisation across the supply chain.

The Champion Difference

At Champion, we have built an enviable reputation as a safe and trusted partner for recruiters and contractors, and we are ready to assist our workers and our agency partners through this transitional period.

As an FCSA-accredited and SafeRec-certified provider, we offer a service that complies with all UK employment legislation and provides a level of transparency that neutralises the risks posed by joint and several liability.

Look out for further updates. Alternatively, if you have any questions or need further guidance, please contact us on 0161 703 2549 or email info@championcontractors.co.uk.

Reference: Government ERB implementation plan: gov.uk/makeworkpay