Employment Rights Act 2025: what changes on 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.

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.