Policy briefings

We’ve published the following member briefing on the Employment Rights Act 2025, outlining key changes and implications for travel businesses. We’re happy to consider questions on the brief to publicaffairs@abta.co.uk, but members may also need to seek independent legal advice where appropriate.

About the Employment Rights Act 2025

Following a year of negotiations, amendments, and progress through the parliamentary process, on 18th December 2025, the Employment Rights Act 2025 became law. The final Act implements largescale reforms of employment law, including changes to contracts, leave entitlements, trade union reforms, and new rights surrounding dismissal. Relevant parts of the Act are summarised below. Few of the Act’s changes took effect immediately upon royal assent, however, the majority are being implemented over two years, and some measures require further legislation and consultation before taking effect.

Final changes and implementation timetable

Immediate changes at the time of Royal Assent

Repeal of the Workers (Predictable Terms and Conditions) Act 2023

• This repeals the uncommenced 2023 Act, replacing it with a new framework for predictable working hours under the Employment Rights Act 2025.

Effective 18 February 2026

Trade union reforms:

• Simplifies the recognition process by lowering membership thresholds and removing certain support requirements.
• Paves the way for enabling the use of electronic balloting (which is planned to take effect in August 2026).
• Includes measures to remove the requirement for unions to ballot their members every ten years on whether they can continue to operate “political funds”, allowing campaigning and lobbying of political parties.
• On picketing, the Act repeals the requirements for union supervision of pickets to have protection from certain tort liabilities.
• On taking industrial action, the Act seeks to prevent employers from preventing or deterring the worker from taking protected industrial action or penalising the worker for doing so. It also extends protection from dismissal during a strike from 12 weeks to the length of the strike action.

Changes effective 6 April 2026

Statutory Sick Pay (SSP)

• SSP is payable from day one of illness, removing the previous three-day waiting period.
• The lower earnings limit is abolished, meaning low-paid workers are now eligible.

Leave entitlements

• Protections against dismissal will be strengthened for pregnant women and those returning from maternity leave.
• The act creates a voluntary option for large employers to create action plans on addressing gender pay gaps and supporting employees through menopause.
• Day-one rights to paternity leave and unpaid parental leave. Maternity leave is already a ‘day 1’ right.
• Bereavement leave extended beyond parents to include other close relationships, with a minimum of one week and flexibility to take leave within 56 days.

General redundancy consultation reform

• Employers proposing 20 or more redundancies within 90 days will be required to undertake collective consultation across the organisation, rather than only “at one establishment”.
• The removal of the “at one establishment” test means redundancies will need to be aggregated across all sites and workplaces, significantly expanding when collective consultation duties are triggered.

Whistleblowing

• Strengthening protections for workers who ‘blow the whistle’ on sexual harassment.

Launched on 7th April 2026

Fair Work Agency

• The Act created a new state enforcement agency, the Fair Work Agency. Which:
  • Consolidates enforcement bodies and gains powers over holiday pay and other rights.
  • Can appoint officers, inspect premises, and require information, strengthening compliance.

Changes taking effect in October 2026

Protection from Harassment – Expected October 2026

• The Act strengthens an employer's duty to take “reasonably practical steps” to prevent workplace harassment, stretching it to a duty to take “all” reasonable steps.
• This has also been expanded to include harassment of employees by third parties, if harassment happens in the course of employment, and the employer did not take all reasonably practicable steps to prevent this. Harassment by third parties will also be expanded to include all forms, not just sexual harassment.

Allocation of Tips

• Employers must consult unions or elected representatives before implementing tip policies and review them every three years.
• Consultation feedback must be shared with employees, promoting fairness and transparency.
• These duties apply only where tipping occurs and do not mandate tipping policies.

Other Trade Union reforms

• Requirement for employers to inform workers of their right to join a trade union.
• The Act includes numerous changes designed to make it easier for trade unions to gain access to workplaces and secure statutory recognition, and take industrial action in the event of a dispute.

Employment Tribunals

• The time limit for most tribunal claims will be extended from three months to six months.

Changes taking effect in December 2026

Seafarers and maritime sector protections – Mandatory Seafarers’ Charter

• The Act introduces specific protections for seafarers, aimed at preventing ‘fire and rehire’ practices in the maritime sector (Some protections in January 2027).
• Employers proposing to dismiss 20 or more employees working on a UK-operated vessel must notify the Government in advance and demonstrate that no reasonable financial alternative exists.
• These provisions sit alongside existing requirements under the Seafarers’ Wages Act, including regulations ensuring certain cross-Channel ferry operators pay the UK National Minimum Wage.

Changes taking effect in January 2027

Dismissal

• The existing two-year qualifying period for protection from unfair dismissal will be reduced to six months from two years.
• The Act makes it automatically unfair to dismiss an employee for refusing to agree to a change in terms or to replace them with another employee on varied terms to carry out substantially the same role. There will be a very limited exception where the business is in ‘real’ financial distress.
• The law also removes the compensation cap for unfair dismissal, meaning there will be no upper limit on compensation awarded in such a claim.

Changes taking effect in 2027

Zero-Hour workers/contracts

• Employers must offer a guaranteed-hours contract after a defined reference period of regular work (to be set in regulations). This is designed to reduce insecurity for workers who consistently work similar hours.
• Workers can remain on zero-hour contracts if they prefer flexibility.
• Employers must give reasonable notice of shifts and compensate for cancelled or curtailed shifts, reducing last-minute changes that impact workers’ income.
• There will be further consultation on how these rights will work in practice.

Exclusivity terms in zero-hour arrangements

• Amends the Employment Rights Act 1996 to strengthen the ban on exclusivity clauses, ensuring zero-hours workers can take other jobs without penalty.

Flexible Working

• Employees gain a strengthened right to flexible working, with employers required to justify refusals against statutory grounds.
• Grounds for refusal are:
  • (a) the burden of additional costs; (b) detrimental effect on ability to meet customer demand; (c) inability to re-organise work among existing staff; (d) inability to recruit additional staff; (e) detrimental impact on quality; (f) detrimental impact on performance; (g) insufficiency of work during the periods the employee proposes to work; (h) planned structural changes; (i) any other grounds specified by the Secretary of State in regulations.
• Employers must consult before rejecting requests and provide clear reasons for refusal.
• The Secretary of State has the power to specify the steps that an employer must take to comply with the requirement to consult before rejecting an application.

Duties of employers relating to equality

• Large employers to create gender pay gap action plans.
• The Act enables future legislation to mandate ethnicity and disability pay gap reporting.

Wider changes

• Protections from dismissal whilst pregnant, on maternity leave and within six months of returning to work. This right will also include adoption leave.
• Specifying steps that are to be regarded as ‘reasonable’, to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
• Trade Unions – Extends blacklisting protections (illegal measures which have barred union members or activists from employment).
• Umbrella Companies regulation – The Act brings umbrella companies into formal labour market regulation by expanding the definition of “employment business” to include umbrella companies – meaning they are treated like recruitment agencies in law, rather than sitting outside the framework.

More information: If you have any questions regarding this briefing note, please contact ABTA’s Public Affairs team at: publicaffairs@abta.co.uk.