Calendar (planned, date-driven)

Employment Rights Act 2025: what changes on 1 October 2026

The second major phase of the Employment Rights Act 2025 takes effect on 1 October 2026. Fire and rehire becomes automatically unfair dismissal, employers become liable for third-party harassment, and employment tribunal time limits double from 3 to 6 months. This editorial sets out what is changing, key dates, and the steps employers must take to prepare.

Change event: Employment Rights Act 2025: October 2026 reforms (fire and rehire, harassment, tribunals) Effective 1 October 2026

What is changing

The Employment Rights Act 2025 received Royal Assent in late 2025. Its reforms are being implemented in phases. The first phase (day-one unfair dismissal rights, zero-hours contract changes, statutory sick pay reforms) takes effect in April 2026.

The second major phase takes effect on 1 October 2026. It introduces significant changes to dismissal law, harassment prevention duties, employment tribunal time limits, tipping obligations, and trade union rights. Most of these changes apply in England, Scotland, and Wales only.

Effective date
1 October 2026
Fire and rehire
Automatically unfair dismissal (unless business faces insolvency-level financial difficulties)
Third-party harassment
Employers liable unless they took 'all reasonable steps' to prevent it
Tribunal time limits
Extended from 3 months to 6 months for bringing claims
Tipping law
Consultation requirements on tipping policies and triennial review duty
Trade union disclosure
Mandatory disclosure of the right to join a trade union

Fire and rehire: automatically unfair dismissal

From 1 October 2026, dismissing an employee and re-engaging them (or a replacement) on less favourable terms — commonly known as fire and rehire — becomes automatically unfair dismissal under the Employment Rights Act 2025.

There is a narrow exception: an employer can rely on this route only where it can demonstrate the business would otherwise face serious financial difficulties amounting to an inability to continue as a going concern. Even then, the employer must show it consulted properly and the variation was reasonable.

Because fire and rehire dismissals are automatically unfair, there is no qualifying service requirement — the claim is available from day one of employment. The compensation cap does not apply to automatically unfair dismissals.

Third-party harassment liability

The Employment Rights Act 2025 makes employers liable for harassment of their workers by third parties — customers, clients, service users, and members of the public. This builds on the Worker Protection (Amendment of Equality Act 2010) Act 2023, which introduced a preventative duty from October 2024.

From 1 October 2026, an employer will be liable for third-party harassment unless it can show it took "all reasonable steps" to prevent it. This is a higher threshold than the existing "reasonable steps" defence under the Equality Act 2010.

Sectors with high public contact — retail, hospitality, healthcare, transport — face particular exposure. Employers should review anti-harassment policies, staff training, reporting mechanisms, and signage warning third parties that abusive behaviour will not be tolerated.

Employment tribunal time limits

The time limit for bringing most employment tribunal claims is being doubled from 3 months to 6 months from the date of the act or omission complained of. This applies to unfair dismissal, discrimination, whistleblowing detriment, and most other statutory employment claims.

For employers, this means a longer window of exposure after termination or other workplace events. Records should be retained for at least 6 months beyond an employee's departure (existing best practice recommends longer retention for discrimination claims in any case).

Trade union rights and tipping law

Additional measures taking effect from 1 October 2026 include:

  • Right to join a trade union — employers must disclose to new employees their right to join a trade union, as part of the written statement of employment particulars.
  • Trade union access — strengthened rights for trade unions to access workplaces for recruitment and organising, with enhanced protections for trade union representatives.
  • Industrial action protections — extended detriment protections for employees participating in lawful industrial action.
  • Tipping law — new consultation requirements before making changes to tipping policies, and a triennial review duty. These build on the Employment (Allocation of Tips) Act 2023 already in force.
  • Adult Social Care Negotiating Body — established to negotiate terms and conditions across the adult social care sector.

Some of these measures (notably third-party harassment detail and trade union access) remain subject to secondary legislation and consultation on detailed implementation.

⚠️ Penalties and enforcement

Fire and rehire dismissals are automatically unfair, meaning no compensation cap applies. Tribunals can award uncapped compensatory awards. Third-party harassment claims can include injury to feelings awards. The Equality and Human Rights Commission can also take enforcement action for systematic failures to prevent harassment.

The new Fair Work Agency will have powers to enforce certain employment rights, including tipping obligations, from its establishment.

❗ What you need to do before 1 October 2026

  • Review dismissal procedures — ensure fire and rehire is not used except in genuine insolvency-level financial distress. Document any financial difficulty thoroughly.
  • Update anti-harassment policies — extend to cover third-party harassment. Implement training, reporting mechanisms, and risk assessments for customer-facing roles.
  • Update employment contracts and offer letters — include the mandatory trade union disclosure in written statements of particulars.
  • Review record retention — keep employment records for at least 6 months after departure to cover the extended tribunal time limits.
  • Review tipping policies — if you operate a tipping policy, prepare for the new consultation and review requirements.
  • Brief managers — ensure line managers understand the new harassment liability, dismissal restrictions, and trade union rights.

ℹ️ Northern Ireland

Employment law is devolved in Northern Ireland. The Employment Rights Act 2025 does not apply in Northern Ireland. These changes apply in England, Scotland, and Wales only. Check with the Labour Relations Agency for equivalent Northern Ireland provisions.

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