The government is shaping the Employment Rights Act as it prepares for 2026–27 changes, balancing new worker and union rights with business needs. With the removal of the compensation cap, union access reforms and the Fair Work Agency on the agenda, employers face a practical set of challenges.

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 Experts weigh in on what these reforms mean in real terms for organisations big and small.

Shaping the union landscape

• Diane Gilhooley, Global Head of Employment, Eversheds Sutherland. The Act signals a turning point in UK industrial relations, reshaping employer–union dynamics. Expect a more assertive union presence, closer scrutiny of workplace practices, and simplified recognition processes. While many reforms land in 2026–27, employers should act now, especially around third-party harassment reforms due in October 2026 and rules for zero- and low-hour workers coming into effect in 2027.
• Chartered Management Institute (Ann Francke). Implementation will hinge on skilled management. Those who navigate the changes collaboratively can expect better retention and productivity. Much of this is already happening in leading organisations.

Enforcement and resourcing questions

• Mark Evans, President, Law Society of England and Wales. Employment tribunals are already strained, with open cases up 33%. New rights require proper resourcing to avoid backlogs and ensure meaningful enforcement. The Fair Work Agency is promised to help, but robust funding and capacity are essential for a balanced system.

Policy updates and practical upgrades

• Stephen Simpson, Brightmine. Many organisations haven’t yet reviewed sick-pay or whistleblowing policies, and parental leave needs alignment with day-one rights. Early policy updates, stronger absence management, and manager training will help organisations navigate the new, more accountable environment.
• Ben Harrison, The Work Foundation, Lancaster University. The reforms offer significant gains for women, disabled people, ethnic minorities, and younger workers. The real work now is in codes of practice and secondary legislation to deliver the Bill’s intent while maintaining practical flexibility for organisations.

The big change: compensation cap removal

• Lorna Ferrie, Mauve Group. Removing the cap is a major risk for smaller businesses. One large payout could be disruptive, pushing extra investment in HR processes and potentially more insurance to cover unexpected claims.
• Jonathan Chamberlain, Gowling WLG. Without a cap, claims could include lost future benefits or discretionary bonuses, potentially reaching substantial sums. This will reshape dismissal decisions and dispute resolution dynamics.
• Ben Smith, Littler. Expect some dismissals, particularly of high earners, to be more complex and costly. This could shift conflict resolution toward earlier settlements, but with a sharper focus on legitimate claims and reduced misuse of confidentiality agreements.

Occupational health’s strategic role 

• Nick Pahl, Society of Occupational Medicine. The new rules around menopause plans and broader rights call for a proactive occupational health strategy. Well‑structured health support helps reduce absences, boost morale, and support effective implementation of the Fair Work Agency’s reforms.

A once‑in‑a-generation opportunity 

• Niall Mackenzie, Acas. This is a unique moment to elevate workplace relations. Acas will refresh training and guidance as reforms roll out, helping employers, workers, and unions collaborate to raise standards and productivity.

Rethinking dispute resolution

• James Townsend, Payne Hicks Beach. Modernising dispute resolution is overdue. A measured reintroduction of jury involvement could bring practical perspective back to tribunals and reduce delays.

Union access in the spotlight

• Anthony Wilcox, TWM The reforms will boost union visibility, with mandatory communications and regular access requirements. Employers must be prepared to inform workers about their rights to join unions and what that entails, while also safeguarding business operations.

Next steps for Tick HR Solutions

• Assess your current policies against the forthcoming changes, focusing on sick pay, parental leave, whistleblowing, and zero-hour contracts.
• Plan a governance and training program for managers to navigate the day-one rights and enhanced union access.
• Review compensation risk exposure with legal counsel and consider risk-transfer options for smaller entities.
• Map out a communication strategy to explain new rights to staff, including onboarding and annual updates.
• Align with HR technology to track compliance, absence management, and employee communications efficiently.

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