Employment Rights Act 2025: Government publishes revised implementation timeline and consultations

During 2025, the government produced an implementation roadmap detailing when the reforms contained in the Employment Rights Act (the “Act”) were proposed to come into force. The government has now published a revised implementation timeline and launched consultations on five areas in which new employee protections/employer obligations will be introduced by the Act.

Below we set out the key revisions to the implementation timeline (“Timeline”) and details of the five consultations. 

Revised implementation timeline 

The updated Timeline confirms that the majority of the Act’s reforms will come into force in line with the roadmap published by the government in July 2025. However, the following revisions should be noted:

• the Fair Work Agency will be established on 7 April 2026;
• the provisions relating to restricting the use of ‘fire and rehire’ have been pushed back to January 2027 (previous planned implementation date - October 2026);
• electronic and workplace balloting for trade unions has been pushed back to August 2026 (previous planned implementation date - April 2026); and  
• reduction of the unfair dismissal qualifying period to 6 months for dismissals from 1 January 2027, and removal of the compensatory award cap will come into force in January 2027.

Consultations

The following consultations are now live: 

1. Fire and re-hire: changes to expenses, benefits and shift patterns 

The Act will introduce protections which will make dismissal automatically unfair where employees are dismissed or replaced to make changes to core contractual terms designated as 'restricted variations'.

The consultation seeks views on the types of changes to expenses, benefits and shift patterns which should constitute a 'restricted variation’, including whether: 

• all expenses, benefits and payments in kind are to be excluded from the ‘restricted variation’ protections, or whether certain benefits which make up a significant aspect of the employee’s remuneration (e.g. share schemes, travel expenses and accommodation) should be included; and 
• the most extreme shift pattern changes (e.g. from day to night working, or weekday to weekend working (and vice-versa)) should constitute ‘restricted variations’, or whether no types of shift pattern changes should constitute ‘restricted variations’.

Consultation issued: 4 February 2026.

Consultation closes: 1 April 2026.

2. Revised Code of Practice on Access and Unfair Practices and unfair practices in electronic ballots

The Act will simplify the process around statutory trade union recognition and make changes to improve access arrangements for unions, and deal more effectively with unfair practices during the recognition and derecognition processes. As a result, the Code of Practice on Access and Unfair Practices (“Code of Practice”) during the recognition process is to be updated to reflect the requirements of the Act. 

In addition, as part of its Plan to Make Work Pay, the government committed to allowing unions to use secure electronic and workplace balloting for statutory ballots (including recognition and derecognition ballots). 

The consultation seeks views on: 

• the amendments made to the content and structure of the Code of Practice to reflect the changes made by the Act; 
• other amendments made to the Code of Practice to ensure that it accurately reflects modern working practices and language; and
• whether the existing list of unfair practices are sufficient to prevent undue influence or unfair practice in electronic ballots, or whether additional legislation is required to prohibit interference with electronic ballots. 

Consultation issued: 4 February 2026.

Consultation closes: 1 April 2026.

3. Improving access to flexible working 

The Act will amend the existing provisions on flexible working and introduce a ‘reasonableness’ test, which will require employers to accept statutory flexible working requests which are reasonable and feasible. The Act also allows for regulations to set out the steps employers will be required to follow where the employer is unable to accept a statutory flexible working request. 

The consultation seeks views on current approaches to handling flexible working requests to shape the new requirements, including: 

• the mechanics and elements of the new proposed ‘light touch’ consultation process to be followed where an employer is unable to accept a statutory flexible working request; and 
• what training, resources and support can help employers navigate flexible working requests.

Consultation issued: 5 February 2026.

Consultation closes: 30 April 2026.

4. Strengthening the law on tipping 

The Act will introduce requirements for employers: (i) to consult with recognised trade union or worker representatives (or workers, where there are no such representatives) when developing and reviewing tips policies; (ii) to review the tips policy at least once every three years; and (iii) make available a written, anonymised summary of the views expressed in the consultation to all workers at the place of business where the tips policy applies.

The consultation seeks views on the new requirements and the existing law on tipping, including:  

• steps taken by employers to comply with the existing law on tipping; 
• any anticipated challenges in implementing the new requirement to consult with trade union or worker representatives when developing and reviewing tipping policies; and
• parties’ awareness of the statutory Code of Practice on fair and transparent distribution of tips and non-statutory guidance on distributing tips fairly, and whether any areas of Code of Practice and/or guidance can be improved.  

Consultation issued: 5 February 2026.

Consultation closes: 1 April 2026.

5. Modernising agency work regulatory framework 

The Act will bring umbrella companies (i.e. a payment intermediary often used by recruitment agencies to pay temporary workers) within the regulatory framework which governs the temporary labour market. 

The consultation seeks views on how the regulatory framework should be adapted to account for the activities of umbrella companies, including steps which can be taken to: 

• simplify and modernise the regulatory framework; 

• ensure that agency workers receive fair remuneration and benefit from safeguards designed to protect them; 

• provide improved clarity and transparency for workers on pay, contracts and employment rights, without creating unnecessary administrative burdens for businesses or overwhelming work-seekers with information; and

• ensure that agency workers are not forced to be engaged and paid via an umbrella company, and are free to turn down work without detriment. 

Consultation issued: 6 February 2026.

Consultation closes: 1 May 2026. However, depending on the responses received, the government expects to consult again on streamlining specific regulations to reduce administrative burdens. 

So what for employers?

The Timeline gives employers clarity on when the changes are likely to be implemented. The consultations give a good insight into how the government intends for the Act’s reforms to work in practice. Taken together, this allows employers to think about the impact the reforms may have on their policies and practices and what steps they need to take to prepare.

Employers who are contemplating making changes to terms and conditions which could amount to a restricted variation may therefore wish to consider their timeline to allow adequate time for processes (including the time to elect and fully consult with employee representatives and time for affected employees to serve their notice) to be completed ahead of January 2027. 

Equally, while the changes to unfair dismissal don’t take effect until 1 January 2027, any employees who have accrued 6 months’ service by 1 January 2027 will qualify for unfair dismissal protection. It is not the case that this change will only apply to employees whose service commences on or after 1 January 2027. Therefore, employers should consider their current recruitment practices and use of probationary periods, as we have highlighted in our previous update.

We will continue to provide further updates on what's changing, when it takes effect, and the practical steps you can take now to prepare your organisation. In the meantime, you can access our Employment Rights Act hub to keep updated.