Employers have been keeping a close eye on the proposed changes to the Employment Rights Bill, particularly to the qualifying period of “day one” rights.

This was one of the areas we referenced in our outlook on 2026 blog. In our experience, businesses that are financially struggling aren’t making redundancy decisions lightly. It is often a decision that needs to be made to keep the business going and to continue employing other members of staff. To have to navigate more stringent employment legislation, we believe, may make employers think twice about taking on new employees altogether. The fear of it not working out and a potential lawsuit to deal with is probably not worth the risk in their eyes.

As we’re not the HR and employment law experts, we’ve turned to Lynne Rose of Personnel Placements for her insights. Personnel Placements is an Independent Recruitment Agency based in Salisbury.

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The Employment Rights Act: What Must Employers Prepare For

The Employment Rights Act 2025, which received Royal Assent on 18 December 2025, represents the most wide-ranging overhaul of UK employment law in decades. While the Act is now law, its provisions will be implemented gradually between 2026 and 2027, with many details still subject to government consultation.

For employers, this creates both risk and opportunity. Those who plan early will be better placed to remain compliant, manage costs and strengthen employee relations. Those who delay may find themselves exposed to tribunal claims, financial penalties, and workforce disruption.

As experienced recruitment and HR specialists, our teams are already supporting organisations to translate these legal changes into practical, commercially sound workforce strategies.

Understanding the phased rollout of changes

Although the Act is in force, most changes have not yet taken effect. Employers must continue to follow existing law until each reform is implemented.

Key implementation dates include:

• February 2026 – industrial action and trade union reforms
• April 2026 – family leave, sick pay and whistleblowing protections
• October 2026 – dismissal and rehire, harassment and tribunal time limits
• 2027 – unfair dismissal, zero-hours reform and flexible working changes

This phased approach allows businesses time to review policies, budgets and staffing models – but only if action is taken early.

Trade Unions

One change took effect immediately when the Act 2025 received Royal Assent; the rules requiring minimum service levels during strike action were removed. For employers, particularly those in transport, health and education, this will mean less regulation over trade unions, and lower thresholds and regulation of strike ballots. 

From February 2026, dismissal for taking part in lawful industrial action will become automatically unfair, removing the current 12-week qualifying limit. Changes to notice periods, balloting thresholds and union access rights will also strengthen collective bargaining.

Further reforms in late 2026 and 2027 will introduce new employer duties around union access, facilities for representatives, and protections against detriment.

Family-friendly rights and statutory sick pay

April 2026 brings significant reform to family leave and sickness absence:

• Paternity leave and unpaid parental leave become day one rights
• Statutory Sick Pay becomes payable from day one of absence
• The lower earnings limit for SSP is removed

These changes will require employers to reassess:

• absence management procedures
• payroll systems
• employment contracts
• manager capability

Without preparation, costs and administrative complexity can escalate quickly. HR specialists  Access2 Human Resources can help employers implement compliant policies and maintain control over the operational impact of the changes.

Stronger harassment and whistleblowing protections

From April 2026, sexual harassment disclosures will qualify for whistleblowing protection and in October 2026, employers will face:

• liability for harassment by third parties (e.g. customers or clients)
• a higher legal standard requiring “all reasonable steps” to prevent sexual harassment

This shifts the focus from reactive response to proactive prevention. Training, documented action plans and clear reporting procedures will be critical to defending future claims.

Dismissal, rehire and unfair dismissal reform

Dismissal and rehire on worse terms, often referred to as “fire and rehire”, will become automatically unfair in most circumstances from October 2026.

From January 2027, the qualifying period for unfair dismissal will reduce from two years to six months, significantly increasing employer exposure to claims.

Together, these reforms mean employers must:

• improve decision-making processes
• strengthen documentation
• ensure managers understand legal risk

Zero-hours contracts, flexible working and future workforce planning

In 2027, workers on zero-hours contracts will gain the right to guaranteed hours, while compensation will be payable for cancelled or curtailed shifts. Flexible working law will also change, requiring employers to clearly explain why any refusal is reasonable turning good practice into a legal requirement.

For employers, this highlights the importance of effective workforce planning and aligning recruitment and HR strategies to ensure operational continuity and manage costs.  Organisations working with specialist recruiters such as Personnel Placements, are increasingly using structured and bespoke staffing models to recruit the right talent in the most cost effective way.

Preparing your business

The Employment Rights Act 2025 is not simply a compliance exercise, it is a fundamental shift in how work is structured, managed and regulated in the UK.

Employers that act now by:

• reviewing contracts and policies
• training managers
• auditing workforce models
• engaging professional recruitment and HR support

will be far better positioned to manage risk, control costs and build sustainable workplaces.

With expert guidance, these changes can become a competitive advantage, not a liability.

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If your company is in financial difficulty and you’d like independent advice from a qualified insolvency professional, call 0808 196 8676 and speak with the team at TruSolv.