The ERA measures are likely to have cost and operational impacts, alongside legal compliance and risk implications. As a result, businesses should take action now to adapt to the new measures - this will require expertise from Legal, HR and HR Operations, including payroll.
Existing transformation plans will need to be carefully considered in light of the new legal requirements, to ensure compliance and reduce risk.
While some further consultation and secondary legislation will be required to support the ERA, we now have greater certainty across a number of areas and have an indicative roadmap for their introduction across 2026 and 2027.
The rollout of these measures is expected to be as follows:
- Already in force
- April 2026
- October 2026
- From 2027 onwards
Already in force
Trade Unions
Previous legislation imposing limitations on strikes has been repealed and requirements for industrial action have been simplified.
Enhanced Employment Protections
The remit of the Low Pay Commission, which recommends revisions to the minimum wage, has been changed to include consideration for the Cost of Living for the first time.
April 2026
Trade Unions
Union recognition requirements eased with the introduction of e-ballots and lower membership thresholds required to achieve statutory recognition.
Discrimination and Family Friendly
Day 1 paternity and unpaid parental leave rights, removing the current 26 week and 1 year service requirements. The restriction around taking paternity leave after shared parental leave will be removed.
Enhanced Employment Protections
- Collective redundancy penalty doubled from 90 days to 180 days’ pay.
- Statutory sick pay lower earnings limit and waiting period to be removed, meaning entitlement it will start from the first day of sickness.
- Whistleblowing protections strengthened as sexual harassment becomes a “qualifying disclosure”.
Enforcement
Fair Work Agency established to enforce employment rights, including national minimum wage, holiday pay, sick pay and modern slavery. The Fair Work Agency will have significant enforcement powers, including enforcing holiday pay in a similar way to current HMRC enforcement of national minimum wage. In addition, the Chancellor announced in the Autumn Budget 2025 that there will be more regular name and shame lists and proactive follow-up on enforcement activity.
October 2026
Trade Unions
- Trade union rights to access workplace increased. This wider right will cover meeting, representing and organising workers, including via virtual access, subject to a statutory request process.
- Employers will need to inform workers of their right to join a Trade Union. The Government has consulted on the format and frequency of this statement.
- Workers taking part in industrial action will be protected against detriment, in addition to unfair dismissal.
Discrimination and Family Friendly
- Employers will be liable for third party harassment for the first time, covering all types of harassment.
- Employers will need to take all reasonable steps to prevent sexual harassment, increasing the existing proactive duty.
Enhanced Employment Protections
Fire and rehire practices will be “automatic unfair dismissal” in most cases.
Enforcement
Employment Tribunal time limits to be extended from 3 months to 6 months for all claims.
From 2027 onwards
Trade Unions
Taking into account the ERA cumulative changes, by 2027 a new industrial relations framework will have been established.
Discrimination and Family Friendly
- Enhanced flexible working rights as employers will need to explain both the reasons for any refusal of a flexible working request and why that refusal is reasonable.
- Enhanced protection against dismissal for pregnant workers, those on maternity and recent returners, increasing existing rights around redundancies.
- New restrictions on NDAs in harassment and discrimination cases.
- Gender pay gap and menopause action plan must be reported by large employers (250+ employees) as part of equality action plans.
- New statutory right to unpaid bereavement leave. Further regulations will clarify this right.
Enhanced Employment Protections
- Unfair dismissal 6 month qualifying period comes into force and the previous statutory compensation cap will be removed, bringing unfair dismissal claims in line with whistleblowing and discrimination claims. This change will come into force on 1 January 2027.
- Collective redundancy thresholds to be amended. The new test will be set out in regulations.
- Guaranteed hours offers for zero and low hours employees. This means that these workers will have the right to be offered guaranteed hours contracts at regular intervals.
- Zero and low hours employees will also have the right to be given reasonable notice of a shift and to receive compensation if a shift is cancelled, curtailed or moved at short notice.
Actions to take now
Given the extent of the changes, now is the time to get your business ready:
- Understand the impact of these changes on your business as they will have differing impacts on each employer.
- Make an action plan to implement the changes ensuring that wider workforce structural adjustments are also considered.
- Start implementing this action plan which could include the following:
- Review your pay governance ahead of the Fair Work Agency coming into force.
- Review your employee relations and trade union strategy.
- Review your HR policies and processes to ensure you are ready for change.
- Consider your current approach to harassment and sexual harassment and how this should be enhanced.
- Review your people strategy and recruitment processes ahead of the changes to unfair dismissal.
- Review your current workforce design and future change plans.
- Assess how you will practically implement the new entitlements for low and zero hours workers, including record keeping.
Contact us
Partner, Employment and Payroll Consulting, PwC United Kingdom
Tel: +44 (0)7808 030257
