Key takeaways
Consultation to shape fire and rehire rules
Government seeking views on which contract changes count as restricted variations.
New duties on tipping transparency
Strengthened laws re tipping policies and staff consultation.
Preparing for ERA 2025 workplace reforms
Consultations cover flexible working, union recognition rules, e-balloting and agency worker regulation.
The Employment Rights Act 2025 is a major part of the government’s ‘Make Work Pay’ agenda. Many of the Act’s provisions require regulations to flesh out some of the finer details of what will eventually be implemented in phases across 2026 and 2027. In recent weeks the government has launched a series of public consultations on the following key aspects of the Act:
Consultation on fire and rehire: changes to expenses, benefits, and shift patterns
The Employment Rights Act 2025 will, from January 2027, make it automatically unfair to dismiss an employee who does not agree to a ‘restricted’ variation(s) where their employer is seeking to employ another person or re-engage them under a varied contract of employment to carry out substantially the same duties as the employee carried out before being dismissed, unless the employer can prove it was in serious financial distress and, in all the circumstances, could not have reasonably avoided the need to make that variation(s). The government has launched a consultation – Make Work Pay: Fire and Rehire: changes to expenses, benefits, and shift patterns to help it to decide: (a) which expenses and benefits in kind should be excluded from the scope of a restricted variation; and (b) which variations to the timing or duration of a shift will be included within the scope of a restricted variation. The consultation closes on 1 April 2026.
Consultation on tipping: strengthening the law on tipping
The Employment Rights Act 2025 will, from October 2026, require employers to: (a) consult with workers or their representatives before producing a written tipping policy; (b) give workers access to a written summary of this consultation; and (b) review their written tipping policy at least once every 3 years. In preparation, the government has launched a public consultation - Make Work Pay: Strengthening the Law on Tipping. This asks questions around how the existing tipping legislation operates in practice (to help identify whether any improvements could be made), considers how the new requirements under the Act can most effectively be implemented, and invites views on the statutory Code of Practice on fair and transparent distribution of tips (which came into force in October 2024 and will be updated prior to the new rules being implemented). The consultation ends on 1 April 2026.
Consultation on recognition code of practice and e-balloting
The Employment Rights Act 2025 will simplify the trade union recognition process and introduce electronic trade union ballots. In preparation for these changes, the government has launched a consultation - Make Work Pay: recognition code of practice and e-balloting unfair practices and a Draft Code of Practice: Access and Unfair Practices During the Recognition and Derecognition Process. The Consultation will close on 1 April 2026.
Consultation on flexible working: reasonableness and consultation process
The Employment Rights Act 2025 will, from 2027, introduce further flexible working reforms. An employer will only be permitted to refuse a flexible working request if: (a) It considers that specified business ground(s) apply (which replicate the existing grounds); and (b) If it is “reasonable” for the employer to refuse the request on that ground(s). Regulations will specify the steps an employer must take in order to comply with the requirement to consult an employee before rejecting a flexible working request. In preparation, the government has launched a public consultation - Make Work Pay: consultation on improving access to flexible working. This seeks views about the new consultation process that employers must follow when they are unable to accept a statutory flexible working request. The consultation closes on 30 April 2026.
Consultation on agency workers: modernising the regulatory framework
The Employment Rights Act 2025 will, from 2027, bring umbrella companies within the definition of an ‘employment business’ for the purposes of the Employment Agencies Act 1973 and the agency conduct regulations. In preparation for this change, the government has launched a consultation Make Work Pay: modernising the Agency Work Regulatory Framework. This seeks views on how regulation of the temporary labour market should address umbrella company activity and how the regulatory framework may be modernised. The consultation closes on 1 May 2026.
For further details of the Act’s provisions, see our Employment Rights Act 2025 Tracker.
