Employment Rights Act 2025: timetable pushed back

The Government has announced a new timetable for its flagship employment law reforms under the Employment Rights Act 2025, pushing back the implementation date for some of the more complex reforms.

What's changed?

New restrictions on “fire and rehire” were due to come into force in January 2027, making it an automatically unfair dismissal to dismiss and re-employ employees in order to effect certain changes to contract terms (called “restricted variations”) or to replace them with employees on inferior terms or non-employees.  Although there will be a defence for employers on the brink of insolvency, this will apply in very limited circumstances.   This change has now been pushed back to March 2027, partly to allow the Government to consult on a new Code of Practice on Dismissal and Re-Engagement which reflects the new law. 

April 2027 will see a host of changes: 

• action plans on gender equality and supporting employees through the menopause for larger private sector employers
• bereavement (including pregnancy loss) leave
• extension of trade union blacklisting protections
• the new organisation-wide threshold for collective redundancies (although we are waiting for confirmation of the actual threshold itself).

Restrictions on the use of NDAs in harassment and discrimination cases will come into force in September 2027. 

There are also confirmed dates for the new flexible working regime and enhanced protection against dismissal for pregnant women and new mothers, which will come into force in October 2027.  

However, as yet there is no firm implementation date for the guaranteed hours and shift notice/compensation rights for zero hours and low hours workers.  This isn't surprising: the Government's consultation indicated that it was yet to determine a policy position on key aspects of these complicated rules, including critical questions about eligibility and calculation periods. The Government has indicated that it will provide an update on implementation of these provisions shortly. 

What stays the same?  

The other major change due to take effect from 1 January 2027 (reduction of the qualifying service period for unfair dismissal from 2 years to 6 months, and removal of the compensation cap) is unaffected - this will still come into force as anticipated. 

What should employers do now?

Businesses now have a clearer picture of the employment law reform timetable for 2027, as well as slightly more breathing space to get ready for the fire and rehire changes.   Employers should use this time wisely to ensure that policies and systems are updated well in advance of the anticipated changes.  If you would like to discuss how our Employment team can support you with these projects, please get in touch with your usual HK Employment team contact or Jane Amphlett.