The Employment Rights Act 2025 is introducing some of the most significant reforms to UK employment law in a generation. Although several changes took effect during 2026, further important reforms are due to come into force in October 2026 and January 2027.
These changes are likely to have a significant impact on how businesses manage performance, disciplinary and dismissal processes, harassment prevention and changes to contractual terms.
If they have not already done so, employers should review their current practices now to ensure they are prepared for the changes ahead.
What is changing in October?
- From 1 October 2026 Employment Tribunal time limits will increase from 3 months to 6 months.
This means that employment issues may remain capable of becoming Employment Tribunal claims for considerably longer. Taking ACAS early conciliation into account, which was recently increased from 6 to 12 weeks, an employer may not become aware of a claim for around 9 months.
So, what should businesses be doing in response? Good record keeping will become even more important, so employers should ensure their records are complete and review their document retention policies.
- From 30 October 2026; employers will need to take ‘all reasonable steps’ to prevent sexual harassment.
Employers are already required to take reasonable steps to prevent sexual harassment, but from 30 October 2026 this duty will increase to a requirement to take ‘all reasonable steps’.
Employers should consider carrying out a thorough review of their approach to preventing sexual harassment. This includes assessing where sexual harassment could occur within the business, identifying measures to prevent it, reviewing policies, training managers and employees, and keeping records of the preventative steps taken.
- Further changes to trade union rights
A number of changes are coming to trade union law. These include a new duty to inform workers of their right to join a trade union, strengthened trade union rights of access to workplaces, and further changes to the rules surrounding trade union recognition and industrial action.
What is changing in January 2027?
- The right to bring an unfair dismissal claim after 6 months, rather than 2 years.
From 1 January 2027, the qualifying period of service for an ordinary unfair dismissal claim will reduce from two years to six months.
What should employers be doing about this now? Employers should review their processes and procedures for probationary periods, performance management and disciplinary action. Early intervention where an employee is not meeting the required standard will become even more important.
- The cap on the compensatory award for unfair dismissal will be removed.
Currently, compensation for an ordinary unfair dismissal claim is capped at the lower of one year’s salary or £125,543. From 1 January 2027, this cap will be removed. For a senior executive with a high salary and benefits package who may find it difficult to secure suitable alternative employment, compensation is likely to be significant. This makes robust dismissal procedures even more important.
- New restrictions on ‘fire and rehire’
‘Fire and rehire’ generally involves dismissing an employee and offering to re-employ them on different contractual terms.
Under the new legislation, certain dismissals intended to impose specified changes to contractual terms will be automatically unfair, subject to limited exceptions.
The government has also been consulting on the detailed treatment of areas including expenses, benefits and shift patterns, so employers should keep the position under review.
If your business is considering changing employees’ contractual terms, consider taking advice now rather than waiting until 2027.
At Just Employment, we advise businesses on all aspects of employment law and can help employers understand what the changes mean for their organisation.
If you are an employer and would like advice on preparing for the forthcoming employment law changes, contact Just Employment on 01483 303636 or email info@justemployment.com.
This article provides general information as at September 2026 and does not constitute legal advice. Employment law is changing rapidly and employers and individuals should obtain advice on their particular circumstances.
