On 3 February 2026, the UK government published an updated implementation timeline for its landmark Employment Rights Act 2025 (the Act), amending and clarifying when key reforms are to come into force. We set out below the headline points employers should note.
Fair Work Agency
The new Fair Work Agency (the FWA) will be established on 7 April 2026. However, it remains unclear when its enforcement powers will commence, and a transitional period is likely.
The intention is to consolidate the enforcement of certain workplace rights (such as the National Minimum Wage) within a single body. Eventually, the FWA is also expected to enforce other rights, including statutory sick pay and holiday pay, with powers to investigate and take action against employers who act unlawfully.
“Fire and Rehire”
Employee protections will now come into force in January 2027 (previously October 2026).
Among other things, it will be automatically unfair to dismiss an employee because they refuse to agree to a “restricted variation” of their contract. “Restricted variations” include reductions in pay and paid time off; changes to performance-based pay measures, pensions, working hours, and shift timing or duration; and the introduction of a contractual variation clause (permitting changes without the employee’s consent).
The government is currently consulting on two restricted variations: reductions in pay (expenses, benefits and payments in kind) and shift patterns. The consultation closes on 1 April 2026.
Unfair Dismissal
The reduction of the qualifying period for unfair dismissal to six months will apply to dismissals from 1 January 2027. It has now been confirmed that the removal of the compensatory award cap will also come into force in January 2027.
For context, the qualifying period is currently two years, and the compensatory award cap is the lower of £118,223 or 52 weeks’ gross pay (with the monetary cap due to increase in April 2026).
Practical Steps for Employers
These dates provide more clarity for employers, who should ensure that they undertake the following preparations before the changes take effect:
- Strengthen recruitment, onboarding and performance review practices
- Implement practical training for managers on the reforms
- Review internal policies, procedures and template documents to ensure alignment with the new statutory framework
- Check that HR systems and day-to-day practices are robust and lawful
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