What the Employment Rights Act 2025 Means for Employers

The pace of employment law reform continues to accelerate, and 2026 marks a significant period of change for UK employers. The Employment Rights Act 2025 introduces wide-ranging reforms that will affect everything from sickness absence and family leave to industrial relations, redundancy consultation and contractual change. Many of these measures will come into force in stages between 2026 and 2027, requiring businesses to prepare well in advance rather than waiting for implementation dates to arrive.

For employers in manufacturing, engineering and industrial sectors, these changes are particularly important. Operational environments are often complex, shift-based and union-aware, with tight margins and productivity targets. Even small legal adjustments can have significant commercial impact. Understanding what is changing, when it is changing and how it affects day-to-day management decisions is therefore critical.

Drawing on the The Employment Rights Act 2025 Planner published by MAKE UK –

What Businesses Need to Know

Statutory Sick Pay: Day One Entitlement

From April 2026, Statutory Sick Pay will become payable from day one and will extend to lower-paid workers. Employers should review sickness policies, absence triggers, payroll systems and forecast additional cost exposure.

Family Friendly Reforms: Expanded Day One Rights

April 2026 introduces day one rights to unpaid parental leave and paternity leave, alongside greater flexibility in how paternity and shared parental leave are taken. Further protections from 2027 increase risk when managing dismissal processes involving pregnant employees or those returning from maternity leave. Policies and manager training will need updating.

Unfair Dismissal: Increased Risk from 2027

From 2027, unfair dismissal protection will apply after six months of service and the cap on compensatory awards will be removed. This raises litigation risk and reinforces the need for strong recruitment processes, probation management and clear documentation.

Trade Unions and Industrial Action

Changes from early 2026 lower strike ballot thresholds, simplify recognition processes and strengthen protections for workers involved in industrial action. Employers should review union engagement strategies and ensure managers understand the new framework.

Harassment and Workplace Culture

Sexual harassment will qualify as a whistleblowing disclosure from April 2026, alongside a new proactive duty to prevent harassment and stronger third-party protections. Employers must move towards preventative risk management, training and robust reporting systems.

Collective Redundancy and Contractual Change

Protective awards for non-compliant collective consultation will double and consultation thresholds will widen. Restrictions on dismissal and re-engagement from October 2026 will make contractual changes more complex, increasing the importance of early HR oversight.

The Fair Work Agency

Launching in April 2026, the Fair Work Agency will increase scrutiny of compliance with minimum wage, holiday pay and SSP. Accurate record keeping and payroll compliance will be critical.

Zero Hours, Shifts and Flexible Working

Planned reforms include restrictions on zero-hours contracts, a right to reasonable shift notice and strengthened flexible working rights. Workforce planning and rostering systems may need adjustment.

Why Employment Law Matters in Manufacturing and Engineering

Manufacturing and engineering businesses operate in environments where people, process and performance are tightly interlinked. Shift work, overtime, agency usage, collective consultation and union relationships are common features. When employment law changes, the impact is rarely isolated to HR. It affects production schedules, cost forecasting, workforce planning and even customer delivery commitments.

Compliance also directly influences reputation. In sectors where skills shortages remain a challenge, being seen as a fair, compliant and supportive employer strengthens attraction and retention. Conversely, poorly managed dismissals, flawed consultation processes or weak harassment prevention measures can quickly escalate into tribunal claims, reputational damage and operational disruption.

Employment law should therefore be viewed as part of commercial risk management. Clear policies, confident managers and proactive engagement reduce exposure and create stability across the workforce.

The MAKE UK Employment Law Update – Why we are attending

We will be attending the upcoming Employment Law Update event hosted by Make UK on Thursday 19th March at Mercure Sheffield Parkway Hotel. Staying informed is not optional in the current climate. The scale and technical detail of the reforms require more than surface-level awareness. They demand practical understanding of how to implement changes within real operational settings.

The event brings together employment law specialists and sector-focused advisors who understand the realities of manufacturing employers. It will provide clarity on timelines, highlight areas of greatest legal risk and offer actionable steps that businesses can begin implementing now. It also provides an opportunity to engage directly with experts and peers who are navigating the same challenges.

For us, attending ensures that we can support our clients, candidates and internal teams with confidence and up-to-date knowledge.

Why You Should Attend

If you hold responsibility for HR, operations, finance or leadership within manufacturing or engineering, this session offers valuable insight at the right time. Understanding the reforms early allows you to review contracts, policies and processes before pressure builds closer to implementation deadlines.

Attending will help you assess your organisation’s exposure, identify priority actions and benchmark your approach against other employers in the sector. In a period of significant legislative reform, preparation is the most effective safeguard. Being informed now will allow you to protect your organisation, support your workforce and approach the changes ahead with clarity rather than uncertainty.

Book your free place here: https://www.makeuk.org/news-and-events/events/employment-law-update-spring-2026-sheffield