Employment Rights Act 2026: Key Changes for UK Employers
The Employment Rights Act 2026 introduces day-one flexible working rights, changes to zero-hours contracts, and new fire-and-rehire restrictions. Here's what UK employers need to know.
The Employment Rights Bill, first introduced to Parliament in October 2024, received Royal Assent and became the Employment Rights Act 2026. It represents the most significant overhaul of UK employment law in over two decades, with provisions being phased in throughout 2025 and 2026. For employers, the changes affect everything from hiring practices to day-to-day workforce management.
This guide covers the key changes employers need to understand and act on, including practical implications for time tracking and record-keeping.
Implementation Timeline:The Act's provisions are being introduced in stages. Some measures took effect in 2025, while others are expected to come into force during 2026 following secondary legislation and consultation periods.
1. Day-One Right to Request Flexible Working
One of the headline changes is that employees now have the right to request flexible working from day one of employment. Previously, under the Employment Relations (Flexible Working) Act 2023, employees needed 26 weeks of continuous service before making a request.
Key aspects of the new flexible working provisions:
- No qualifying period — employees can submit a flexible working request from their first day
- Employer must consult — employers are required to consult with the employee before refusing a request
- Decision within two months — employers must respond to requests within two months (reduced from three)
- Grounds for refusal unchanged — employers can still refuse on business grounds, but must explain their reasoning
- Two requests per year — employees may make up to two statutory requests in any 12-month period
Practical Resource: Need to handle flexible working requests? Use our flexible working request template and read our full guide on the right to request flexible working.
2. Zero-Hours Contract Reforms
The Act introduces substantial reforms to zero-hours and low-hours contracts, giving workers greater predictability and security. These provisions are expected to take effect following a consultation period on the reference period details.
Right to Guaranteed Hours
Workers on zero-hours contracts (and those on low-hours contracts that don't reflect their actual working patterns) will have the right to be offered a contract reflecting the hours they regularly work. After a statutory reference period, employers must offer a guaranteed-hours contract based on the hours actually worked.
Reasonable Notice of Shifts
Employers must provide reasonable notice of shifts and any changes to shifts. While the exact notice period will be set through secondary legislation, the principle is that workers should not be called in at the last minute without adequate warning.
Compensation for Cancelled Shifts
Where shifts are cancelled, curtailed, or moved at short notice, workers will be entitled to compensation. This addresses the common problem of workers arranging childcare or turning down other work, only to have their shift cancelled without payment.
| Zero-Hours Change | What It Means for Employers |
|---|---|
| Right to guaranteed hours | Must offer contracts reflecting actual hours worked after reference period |
| Reasonable notice of shifts | Cannot call workers in at the last minute; must give adequate advance notice |
| Short-notice cancellation pay | Must compensate workers when shifts are cancelled or curtailed at short notice |
| Right to decline unreasonable hours | Workers can refuse shifts outside their guaranteed hours without detriment |
Record-Keeping Is Critical: Employers will need accurate records of hours worked to determine what guaranteed-hours contract to offer. If you employ zero-hours workers, ensure your time tracking system captures every shift worked, including start and end times.
If you manage zero-hours workers, our zero-hours holiday calculator can also help you stay compliant with holiday entitlement calculations under the new rules.
3. Restrictions on Fire-and-Rehire
The Act significantly restricts the practice of “fire and rehire” (dismissing employees and rehiring them on less favourable terms). Under the new provisions:
- Automatic unfair dismissal — dismissing an employee for refusing to accept a variation of contract will be automatically unfair in most circumstances
- Limited exceptions — fire-and-rehire may only be permissible where the employer can demonstrate that the business would otherwise face serious financial difficulties amounting to an inability to carry on as a going concern
- Consultation requirements — employers must follow proper consultation processes and demonstrate that the contractual changes are genuinely necessary
This effectively makes fire-and-rehire a last resort rather than a negotiating tactic, codifying the approach recommended in the previous statutory Code of Practice on Dismissal and Re-engagement.
4. Statutory Sick Pay Changes
The Act reforms Statutory Sick Pay (SSP) to make it more accessible:
Removal of waiting days
SSP will be payable from the first day of sickness absence, not the fourth day as previously required
Removal of the Lower Earnings Limit
Workers earning below the Lower Earnings Limit (previously £123 per week) will now qualify for SSP, potentially at a reduced rate
All workers covered
This particularly benefits part-time workers, those on zero-hours contracts, and lower-paid employees who were previously excluded
For employers, this means SSP costs may increase slightly, but accurate absence and hours records become even more important for calculating entitlements correctly.
5. Enhanced Protections for Pregnant Workers and New Parents
The Act strengthens protections against dismissal for pregnant workers and those who have recently returned from maternity, adoption, or shared parental leave:
- Extended protected period — protection from redundancy dismissal is extended to cover pregnancy and a period of six months after returning from maternity leave
- Priority for suitable alternative employment — pregnant workers and new parents facing redundancy must be offered suitable alternative roles where available
- Lower burden of proof — in tribunal claims, the burden shifts to the employer to show that pregnancy or family leave was not a factor in dismissal
Practical Tip: Ensure your HR records clearly document the business reasons for any restructuring decisions affecting pregnant employees or those returning from family leave. Timesheet and project allocation records can provide objective evidence of role requirements.
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6. What This Means for Time Tracking and Record-Keeping
Several provisions in the Employment Rights Act 2026 place greater emphasis on accurate working time records. Employers who already maintain robust time tracking will find compliance significantly easier.
| Provision | Record-Keeping Requirement |
|---|---|
| Zero-hours guaranteed hours offer | Accurate log of all hours worked during reference period |
| Shift cancellation compensation | Records of scheduled shifts, changes, and notice given |
| SSP from day one | Accurate absence records and earnings data for all workers |
| Flexible working patterns | Documentation of agreed working patterns and actual hours |
| Holiday entitlement (zero-hours) | Hours worked data to calculate accrued holiday correctly |
If you employ workers on variable-hours contracts, having a system that automatically tracks hours worked, records shift schedules, and calculates entitlements is no longer a “nice to have” — it is essential for legal compliance. Our holiday calculator can help you work through entitlement calculations for irregular-hours workers.
7. Employer Compliance Checklist
Use this checklist to ensure your business is prepared for the Employment Rights Act 2026 provisions:
Review flexible working request process
Update procedures to handle day-one requests; ensure managers know the new two-month response deadline
Audit zero-hours and low-hours contracts
Identify workers whose actual hours consistently exceed contracted hours; prepare to offer guaranteed-hours contracts
Implement shift scheduling with adequate notice
Establish minimum notice periods for shift allocation and have a process for cancellation compensation
Update sick pay policies
Remove waiting days from SSP; ensure low-earners are included in sick pay entitlement
Review redundancy procedures
Ensure enhanced protections for pregnant workers and returners from family leave are reflected in policies
Eliminate fire-and-rehire as a standard practice
Only consider contract variation dismissals where genuine financial distress threatens business viability
Invest in accurate time tracking
Ensure you can evidence hours worked, shifts scheduled, and patterns over time for all variable-hours workers
Non-Compliance Risk: Failing to offer guaranteed hours after the reference period, or not compensating for cancelled shifts, could result in Employment Tribunal claims. Accurate time records are your primary defence in any dispute about hours worked.
Summary
The Employment Rights Act 2026 fundamentally shifts the balance of UK employment law toward greater worker protections, particularly for those in insecure work. The key changes — day-one flexible working rights, zero-hours contract reforms, fire-and-rehire restrictions, expanded SSP, and enhanced parental protections — all require employers to maintain better records and follow more structured processes.
For employers managing variable-hours workforces, the message is clear: accurate, reliable time tracking is no longer optional. Whether you need to calculate guaranteed-hours offers, evidence shift notice periods, or compute holiday entitlements for irregular workers, having the right systems in place is the foundation of compliance.
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