Employment Law Online Roundtable – Friday 6th March

The UK is rolling out its most ambitious overhaul of workers' rights in decades, just as businesses grapple with fresh rules that could reshape hiring, firing, and daily operations. On February 18, 2026, the first wave of the Employment Rights Act 2025 kicked in, easing restrictions on industrial action and marking the start of phased reforms promised by the Labour government after its 2024 election win.

This matters because these changes address long-standing complaints about insecure work and weak protections, amid sluggish productivity and economic inequality. The Act, which received Royal Assent in December 2025, aims to boost growth by 0.04% of GDP while improving job security for 18 million workers. Yet it stirs debate: supporters see it driving productivity through better-motivated staff; critics warn of £1 billion in annual costs to businesses, potentially curbing hiring.

Recent shifts include repealing the Strikes (Minimum Service Levels) Act 2023 and much of the Trade Union Act 2016. Unions can now ballot for strikes without a 40% turnout threshold in key public services, and the validity of those ballots extends from six to 12 months. Notice periods for action drop from 14 to 10 days. These tweaks make strikes easier to organize, reflecting Labour's push to rebalance power toward workers after years of Conservative curbs.

Come April 6, 2026, more hits: day-one rights to paternity leave (up to two weeks) and unpaid parental leave (up to 18 weeks per child). Statutory sick pay loses its three-day waiting period and lower earnings limit of £123 weekly, letting low-paid workers claim from day one at £116.75 per week. Collective redundancy awards double to a maximum 180 days' pay for failures to consult.

Employers must now take 'all reasonable steps' to prevent sexual harassment, including by third parties like customers, with regulations due October 2026. A new Fair Work Agency launches April 7 to enforce standards. Union recognition simplifies, dropping the 10% membership threshold for ballots.

Impacts ripple wide. Gig workers and zero-hours contractors—around 1.1 million people—face bans on exploitative contracts by 2027, gaining rights to guaranteed hours based on recent averages. Small businesses fret over admin burdens and litigation risks, with unfair dismissal protections from day one (after a nine-month probation). Larger firms eye stronger unions, with electronic balloting from August 2026.

Economically, the government touts net societal gains of £10 billion yearly from healthier, more secure workforces reducing turnover. But bodies like the Institute of Directors predict growth drags if costs deter investment. Sectors like retail, hospitality, and care, reliant on flexible labor, feel the pinch most—potentially raising prices or trimming staff. Workers, especially women and low earners, gain leverage; employers adapt or risk fines up to £60,000 for non-compliance on issues like right-to-work checks.