With the Employment Rights Act receiving Royal Assent in December 2025, this year will bring huge changes for employee rights, and in particular HR practices and how employers manage such a transition period.
Whilst the headline grabbing elements of the Act focus on unfair dismissal rights being acquired from six months rather than two years and on the removal of the cap on compensation for unfair dismissal (which we will continue to comment on over the coming months), Q1 2026 is also when employers should carefully review their existing contractual terms. Making changes to those terms without consent is likely to become a more risky and complicated process.
It is also important to consider potential future changes to the business – such as a relocation of the head office for example, and to ensure express mobility and flexibility provisions are included.
With the tightening of the rules on ‘fire and rehire’ (which will be prohibited in almost all circumstances), employers – who have usually treated such tactics as a last resort – are likely to lose the leverage that might previously have been used to encourage employees to consent to changes to their terms and conditions.
More thought will need to be given to new contractual terms on promotion (already an important consideration in the context of the enforceability of post termination restrictive covenants) and around pay increases, as there may be the limited times and opportunities to introduce new contractual provisions by consent.
Additional obligations will also follow requiring contracts to make employee’s expressly aware of their rights to join a trade union.
In short, there is a narrow window before the implementation of the Employment Rights Act 2025 and so employers should be undertaking a review of their existing contractual terms immediately and “future proofing” their policies.
Please contact B P Collins’ employment team for help and advice now by emailing enquiries@bpcollins.co.uk or call 01753 889995.
