New employment rights: are we going back to the 1970s?

Introduction

Recent legislation has significantly tilted the balance of power towards employees, who have acquired new rights and will gain more over this year and next. The government said it consulted closely with unions and companies over the changes to employment law in the Employment Rights Act (ERA) 2025; however, the impression given by the act is that it was unions that had the ear of ministers.

As well as the extra rights and regulations, employers are concerned about additional costs. Three quarters of employers said they expected to spend more on hiring as a result of the ERA, according to a survey by the Chartered Institute of Personnel and Development quoted in the Telegraph. Thus the act may well turn out to be another drag on growth after the sizeable increase to the minimum wage in 2025 and the hike in employer’s national insurance to 15% the previous year.

The areas that mostly concern employers are new rights in relation to strikes, more day one rights for employees and an extension of the law on harassment.

Strikes and Trade Union Changes

The repealing of large parts of the Trade Union Act 2016 makes strikes much easier to call and industrial action mandates now last for much longer. That act struck many as having found a fair balance point between the interests of workers and those of employers, in particular, its requirements for turnout thresholds for strike ballots, which stopped a minority of workers being able to impose their decision on the rest of their colleagues.

Like it or not, employers will have to get to grips with all the new laws, rules and requirements so let’s start by looking at the changes that took effect in December.

Strikes

Minimum service level rules for strikes have been removed. The rules were intended to keep public services, such as the railway network, running during industrial action.

Increased protection for industrial action

From 18 February 2026 dismissal for taking part in industrial action became automatically unfair. The 12-week period for claiming unfair dismissal was removed at the same time.

Trade union activity

As of 18 February significant restrictions on union activity and industrial action were taken away. The main changes are:
The time needed to give notice of industrial action was reduced to 10 days instead of 14 days.
Picket supervisors are no longer required.
Mandates for industrial action last for 12 months instead of six months.

Trade union ballots

These too were subject to major changes from 18 February.

The support threshold rule that required 40% of eligible votes to back industrial action was removed. This applied to important public services. A strike vote now only needs more votes in favour than against whether in the public or private sector.

Turnout thresholds that require at least 50% of members to vote in industrial action ballots will be abolished but will remain in place until at least August 2026.

April 2026 Employment Changes

Paternity leave and parental leave

From 6 April 2026 changes to paternity leave and parental leave come into effect, the most significant being that they become day one rights.

Before this date a claimant for paternity leave must have worked for an employer for at least 26 weeks. Temporarily, the notice period for paternity leave has been cut from 15 weeks to 28 days.

Paid and unpaid parental leave become day one rights – before 6 April someone must have worked for an employer for a year to be eligible.

The restriction on taking paternity leave after shared parental leave will cease to apply.

Eligible fathers and partners will be able to take up to 52 weeks of unpaid bereaved partner’s paternity leave in the event of the mother dying. This must be taken within 52 weeks of the child’s birth or adoption.

Sick pay

From 6 April statutory sick pay will be paid from the first day of sickness not the fourth day. Also the lower earnings limit will be removed – workers will no longer have to earn more than a certain amount to be eligible for statutory sick pay.

Collective redundancies

The maximum penalty for failing to consult in collective redundancies will double from 90 days to 180 days’ pay. This is another change that takes effect on 6 April.

Employers are obliged to collectively consult if proposing 20 or more redundancies in one workplace or a yet-to-be quantified number of redundancies at more than one site.

Fair Work Agency

This body will come into existence on 6 April and will amalgamate existing enforcement bodies. It will take on enforcement activities in relation to rights such as holiday pay and statutory sick pay.

As part of fair work commitments, the two-tier code will be brought back, which ensures private sector employees working on outsourced contracts will be on terms and conditions similar to those transferring from the public sector.

August and October Changes

What is new for August?

Union members will be able to vote electronically or in person for various ballots including for industrial action subject to the agreement of the union and the employer.

Once electronic voting is in place, the requirement for a 50% turnout for industrial action ballots will be removed on a timeline that is yet to be confirmed.

What is new for October?

A third tranche of changes begins in the autumn.

Unfair dismissal period

The deadline to bring a claim at the employment tribunal will increase to six months, up from the current three months. Access to legal aid at the tribunal will remain restricted to those bringing discrimination claims.

Trade union rules

Unions and their members will gain some new rights.

There will be a duty on employers to tell workers that they have the right to join a trade union.
Rules on unions’ access to the workplace will be amended.
Union reps will gain a new right to reasonable accommodation and facilities to carry out their duties.
Union equality reps will get a new right to time off to carry out their duties.
The code of practice on union recognition will be updated.
Workers who take part in industrial action will be protected against detriment.

Harassment and Workplace Policies

New liability for third party harassment

From October employers will be liable for harassment of whatever type from third parties unless they have taken all reasonable steps to prevent it. The current law requires only ‘reasonable steps’. What ‘all reasonable steps’ amounts to will be clarified next year. In addition, a duty not to permit harassment will be imposed on employers.

While this is evidently well intentioned much will depend on what the ‘all reasonable steps’ are deemed to be. This change has not received the scrutiny that it should have. The ‘all reasonable steps’ requirement may well set a very high bar that some employers, however ready to protect their staff they may be, will not be able to reach.

There is also the unfairness of the employer being liable for another’s harassment – which he or she may have made genuine efforts to stop – while the harasser escapes without penalty. The transfer of blame from the guilty to the innocent seems unjust.

Harassment will often come without warning – we don’t know what someone will say until he says it. Employers appear expected to have the foreknowledge to prevent unacceptable speech or behaviour before it happens.

Tipping

Employers will have to consult with workers or their representatives before setting up a tipping policy, and the policy must be updated every three years.

Other April changes

From 6 April further reforms take effect. Sexual harassment will become a ‘qualifying disclosure’ under whistleblowing law. This protects people making a disclosure in relation to sexual harassment from detrimental action and unfair dismissal.

Employers will need to create action plans for menopause and gender pay gaps. This will be voluntary from 6 April and will become compulsory some time next year.

Clauses in non-disclosure agreements that prevent workers from alleging or disclosing work-related harassment or discrimination will become void. The government has not said when this will come into effect.

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2027 Reforms

What is new for 2027?

From 1 January employees gain the right to protection from unfair dismissal after six months in the job. Currently unfair dismissal can only be claimed after two years of service. At the same time the cap on compensation for unfair dismissal will be removed.

Senior executives and other top earners such as football managers and players who are to some extent paid by results could therefore bring very large claims in what would be complex cases.

The case of football players is an interesting one. A player released at the end of a contract will still be regarded as dismissed so a player who is terminated but doesn’t have a club to go to will find a tribunal claim very tempting. In addition, the removal of the payout cap makes going to tribunal far more appealing.

Companies and clubs will in many cases be tempted to settle even weak claims rather than go through the tribunal process and risk having to make unlimited payouts to underperforming staff.

They will therefore need to exercise extreme care in dismissing high-earning employees and will lose the ability to quantify the financial risk in doing so.

Fire and rehire practices will be banned. This is when employees are sacked and then taken back on with inferior terms and conditions. There is a get-out for companies that are in severe financial difficulties and do not have an alternative.

Future Changes and Final Thoughts

Other changes due next year

These reforms are planned for 2027 but are yet to have an implementation date.

Pregnancy and maternity rights

The act will strengthen protections against unfair dismissal for pregnant women and those returning from maternity leave.

Zero-hours contracts

Workers on zero-hours and low-hours contracts will gain the right to guaranteed hours if they want them. Details will follow in secondary legislation.

Zero-hours workers are right to be uneasy about this measure. It may make employers unwilling to offer them more hours occasionally in case this increases their guaranteed minimum hours. The position of seasonal and temporary workers has been left unclear. Clearly the likes of fruit pickers can’t be offered year-round minimum hours.

It may well be that the new regulations will be so onerous that employers will simply stop offering casual work to people. This is likely to have a particularly harmful impact on young people, who employers will see as a bigger risk as they have less experience.

Cancelled shifts

Workers will gain the right to be paid if shifts are cancelled or rescheduled, and employers must give reasonable notice of shifts and changes to shifts.

Bereavement leave

A new right to unpaid bereavement leave will come into force. Pregnancy loss is included in the right.

Flexible working

Employers will be able to reject requests for flexible working but they are only allowed to give reasons from a list of eight. They must also explain why they think the refusal is reasonable.

Make sure your voice is heard

Many measures in ERA have not yet taken a final form and will depend on secondary legislation. The government has promised ‘extensive consultation’ on the act’s implementation so it is on those with concerns to raise them. We can only hope that vigorous lobbying can ameliorate the parts of the act that are not yet set in stone.

And there is plenty to fight for as, according to the government’s own figures, businesses will face another £5bn in costs because of ERA.

If you are one of those companies that is concerned about the effects of the act on your tax and financial position you may want to seek expert advice.

At Finsbury Robinson we offer a full suite of tax, accounting and business advisory services. Our friendly and highly experienced team can be reached on 020 8858 4303 or via email at info@finsburyrobinson.co.uk.