The need for further compromise in 2026 over Employment Rights Act 2025 measures

How will this be achieved?

Achieving this will require more detailed tripartite discussions between the Government, the negotiating group representing employers and the trade unions to try to find middle ground and workable solutions. These discussions delivered the agreement over proposed changes to the unfair dismissal rules that paved the way for the Employment Rights Act to receive Royal Ascent on 18 December 2025 and pass into law.

The end of the beginning

Building on this approach will be crucial, as in many ways the birth of the Employment Rights Act 2025 is just the end of the beginning, as we expect more than 20 further consultations on a range of proposed legislative changes.

These will include:

• plans to make it easier for trade unions to achieve recognition
• new rights for zero hours and short hours contract workers
• a potential new threshold for collective redundancy consultation.

We also await the UK Government response to recent consultations on new rights for trade unions to access workplaces and proposed additional protections for pregnant women and new mothers. CIPD’s submissions to these highlight the need for significant changes to the proposals following input from members.

As important as getting the detail right on legislation, will be the UK Government’s plans to effectively support implementation of the Act’s 28 measures over the next two years.

Clear implementation plan and support for employers needed

Changes in law don’t automatically translate into changes in working culture or people management practices on the ground. Employers will need to be aware of the changes, know how to adapt their HR policies and practices and ensure line managers understand any new obligations on them.

This is why it will be crucial for the UK Government to develop a clear communication campaign well in advance of the multiple changes to the law coming into force and ensure there is clear advice and guidance available, particularly for smaller firms.

Even in isolation, some of the legislative changes will present a challenge. For example, while the agreement to reduce the unfair dismissal qualifying period to six months rather than abolish it altogether was welcomed by employers, adapting to this change will not necessarily be straight forward.

This is particularly the case as the new unfair dismissal rights are coming into force earlier than expected on 1 January 2027 and will be effectively backdated for existing staff. This will mean that anyone employed before July 2026 will have an immediate right to claim unfair dismissal from the start of 2027. 

This has significant implications for employers, who will need to review their policies on induction, onboarding, performance management and contractual probationary periods to ensure that they are compliant much sooner than they might have expected. 

Consequently, it will be crucial that additional resources are found for Acas to help organisations, especially SMEs, understand what they need to do to remain compliant.

Tribunal reforms required

There will also need to be major improvements to the tribunal system to boost its efficiency and reduce waiting times. The change to the unfair dismissal qualifying period, removal of the compensation cap and other changes to employment laws are bound to increase claims significantly.

It is positive the UK Government is looking at how to reform the tribunal system, but improvements are likely to take some time to take effect, which means there should be a concerted effort not to add to the burden on the system before this can happen. 

Failure to recognise these issues risks more workplace conflicts and disputes and further swamping the over-burdened employment tribunal system - outcomes UK Government, employers and trade unions want to avoid.