Employment Rights Act 2025: Sector-specific impacts & actions (2026 – 2027)
Hospitality (restaurants, bars, hotels, venues)
Key impacts
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Zero / low-hours reform:
predictable hours offers, reasonable shift notice, and cancellation pay will reshape rota practices and casual staffing models from 2027; seasonal fixed‑term guarantees will be permitted where reasonable.
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Third‑party harassment liability:
exposure rises where staff interact with the public; duty to take 'all reasonable steps' applies from Oct 2026, with sexual harassment becoming a whistleblowing category and guidance to follow in 2027.
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Union access & recognition:
physical / virtual access agreements and lower recognition thresholds may increase organising activity (from Apr / Oct 2026).
Actions
Map casual workforce and introduce predictability pathways (e.g., guaranteed-hour offers after qualifying period). Update scheduling systems to handle notice and cancellation payments.
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Conduct risk assessments for third‑party harassment (front‑of‑house, late-night settings), train supervisors, and implement incident reporting aligned with whistleblowing policy.
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Prepare for union access logistics (onsite and digital) and a constructive engagement protocol.
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Retail (stores, distribution, e‑commerce customer service)
Key impacts
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Shift predictability & cancellation pay will affect store rotas, pop‑up staffing, and peak trading periods (Black Friday, Christmas), with complex rules finalised via secondary legislation in 2027.
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Third‑party harassment:
frequent customer interaction increases liability risks; duty to take 'all reasonable steps' from Oct 2026.
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Collective redundancy:
doubled protective award cap (from Apr 2026) raises exposure for branch closures or restructures; a new UK‑wide trigger will follow in 2027.
Actions
Build rota governance (minimum notice windows, cancellation workflows, and compensation automation).
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Strengthen customer‑interaction safety measures (store security protocols, de‑escalation training).
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Standardise redundancy consultation playbooks at group level to comply with establishment and business‑wide triggers.
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Social Care (domiciliary, residential, supported living)
Key impacts
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Heavy reliance on variable shifts and casual contracts means predictable hours and notice / cancellation rules will materially affect service planning (from 2027).
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Day‑one SSP and family leave (Apr 2026) improve coverage for low‑paid staff; expect operational pressure on rosters and cover arrangements.
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Union access & recognition plus industrial‑action reforms could increase collective activity, requiring robust staffing contingency plans.
Actions
Implement predictable‑hours frameworks with care pathway planning; budget for shift cancellation payments.
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Update absence cover protocols and workforce banks to absorb day‑one SSP and family leave impacts.
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Create collective engagement strategies and continuity plans for potential action periods.
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Logistics & Transport (warehousing, delivery, public transport)
Key impacts
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Industrial action reforms (simpler ballots, electronic voting) and repeal of minimum service levels increase strike feasibility from 2026; plan for continuity of key services.
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Collective redundancy penalties rise (Apr 2026), relevant to network optimisations or automation programmes.
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Fire‑and‑rehire restrictions (Oct 2026) will limit unilateral changes to pay / hours.
Actions
Develop industrial action response playbooks (alternative routing, cross‑training, supplier contingencies).
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Use structured consultation for transformation programmes; audit change mechanisms to avoid restricted variations.
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Manufacturing & Engineering
Key impacts
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Unfair dismissal:
six‑month qualifying period from Jan 2027 and removal of cap increases litigation risk around performance and misconduct exits.
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FWA enforcement (Apr 2026) on pay/records; expect audits regardless of complaints.
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Collective redundancy penalties and future trigger changes affect plant consolidations.
Actions
Strengthen probation management and dismissal documentation.
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Ensure pay/holiday / SSP records meet FWA standards; conduct internal mock audits.
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Plan collective consultation timelines early; align with ACAS codes.
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Financial & Professional Services
Key impacts
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Uncapped unfair dismissal compensation (timing tbc, likely 2027) materially changes risk profile for senior exits; may shift claims towards ordinary unfair dismissal rather than complex discrimination/whistleblowing bundles.
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Flexible working refusals must be reasonable and explained (from 2027), increasing governance demands.
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NDAs ban (date tbc) curtails confidentiality clauses concerning harassment / discrimination responses.
Actions
Re‑calibrate exit strategies (settlement values, process rigor, board sign‑off).
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Deploy transparent flexible‑working frameworks with documented business reasons.
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Update investigation and disclosure policies anticipating NDA restrictions.
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Tech, Media & Creative
Key impacts
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Union access (including digital) requires careful data protection and platform controls; virtual access rights from Oct 2026.
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Flexible working and day‑one family rights influence talent retention and remote‑work models from 2026 – 2027.
Actions
Establish digital access protocols (privacy‑by‑design, role‑based access).
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Refresh remote / hybrid policies and manager training for reasonable refusal standards.
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Public Sector (health, education, local government)
Key impacts
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Repeal of minimum service levels and simplified balloting increases strike potential across essential services from 2026.
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Third‑party harassment duties apply in high‑interaction environments (clinics, classrooms, service desks) from Oct 2026.
Actions
Build resilience planning (agency pools, mutual aid, service prioritisation) for action periods.
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Implement comprehensive harassment prevention programmes and reporting routes tied to whistleblowing.
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Employment Rights Act 2025: Sector-specific impacts & actions (2026 – 2027)
Roadmap alignment:
Map each change to quarter (Q2 2026: family / SSP; Q4 2026: fire‑and‑rehire; 2027: zero‑hours, flexible working, unfair dismissal changes) and assign owners.
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Policy suite refresh:
contracts, variation clauses, flexible working, family leave, disciplinary/dismissal, redundancy, union access, harassment, whistleblowing.​
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Manager training:
probation / dismissal standards, rota governance, consultation rules, reasonable refusal reasoning.
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Data & record‑keeping:
pay / holiday / SSP records ready for FWA; audit trail for decisions.
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Engagement & consultation:
establish employee‑rep forums; prepare union access agreements and recognition risk assessments.
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