The Employment Rights Act: What Your Business Needs to Do Next

While the first wave of changes from the Employment Rights Act is already active, the changes we’ve seen so far are just the warm-up act. The most disruptive, fundamentally challenging updates are scheduled to roll out over the tail end of 2026 and into 2027.

These upcoming reforms will completely reshape how UK businesses hire, manage, and dismiss staff. Sitting back and waiting for them to arrive is a massive potential compliance risk.

If you want to avoid unwelcome employment tribunal claims, higher costs, and operational headaches, here is what is coming down the track—and what you need to do next.

The Next Wave: The Big Reforms on the Horizon

The upcoming changes hit the very foundations of standard employment law. Here is the timeline you need to carve into your calendar:

October 2026: Prevention, Tribunals, and Trade Unions

• A Hard Line on Harassment: The legal duty shifts from reacting to complaints to actively preventing them. You will be legally required to prove you took "all reasonable steps" to prevent sexual harassment, including protection from third parties like clients or customers.

• The Six-Month Tribunal Window: Employees will have six months to submit an employment tribunal claim instead of the current three-month limit, significantly prolonging your legal exposure.

• Pro-Union Workplace Shifts: Expect a new duty to inform workers of their right to join a trade union (likely in their employment contract), alongside vastly expanded access rights for union reps.

1 January 2027: The Big One (Unfair Dismissal & Fire and Rehire)

• Unfair Dismissal Criteria Overhauled: The standard qualifying period for unfair dismissal is dropping from two years down to just six months. Compounding this risk, the current cap on compensatory awards (previously capped at 12 months' gross pay) is being entirely removed.

• The Death of "Fire and Rehire": It will become automatically unfair to dismiss an employee and rehire them on less favourable terms. If you need to restructure or harmonise contracts, you will have to rely on genuine consultation and agreement, rather than imposing structural changes by force.

Expected Early 2027: Flexible Working & Zero-Hours Changes

• Flexible Working as the Default: Refusing a flexible working request will soon require rigorous, evidence-based business justifications. "Because we’ve always done it this way" will no longer hold up.

• Zero-Hours Shift Protections: Workers on variable contracts will gain the right to request predictable working patterns and, crucially, the right to compensation if a shift is cancelled, moved, or cut short without reasonable notice.

Your Strategic Action Plan: What to Do Now

This next phase isn't about mere awareness—it requires tactical operational changes. To get ahead of the curve, your business should focus on three core areas right now:

1. Overhaul Your Probation and Performance Tracking

With unfair dismissal rights kicking in at six months instead of two years, your management team has a much narrower window to spot and address poor performance and suitability. You need to bulletproof your onboarding, review employee progress meticulously within the first five months, and train your managers to document everything perfectly from day one.

2. Shift from Reactive to Preventative Culture

Before the October 2026 harassment rules kick in, you need to conduct a thorough risk assessment of your workplace culture. Implement clear reporting structures, establish zero-tolerance escalation processes, and ensure your staff are fully trained. Prevention is about to become a strict statutory expectation.

3. Audit Your Casual Labour and Workforce Models

If your business model relies heavily on zero-hours contracts, casual workers, or agency staff, you need to analyse your vulnerabilities ahead of 2027. Look closely at how you schedule shifts and manage short-notice cancellations. If your current model relies on last-minute changes, it’s time to start restructuring those processes now.

The Bottom Line

When it comes to the Employment Rights Act, waiting for an issue to arise is an expensive mistake. The direction of travel is clear, and the timeline for preparation is much tighter than it appears.

Proactive businesses that use the remaining months of 2026 to tighten their processes, train their managers, and audit their risks will sail through this transition. Those who wait will find themselves exposed to severe penalties, uncapped tribunal claims, and major operational headaches.

Get Your Business Ready

You don’t have to navigate these massive legislative shifts alone. If you want practical, commercially focused support to audit your current practices and build a compliance roadmap for 2026 and beyond, let’s talk.