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When it was first proposed in late 2024, the Employment Rights Act (2025) was heralded as the biggest overhaul to employment law in a generation. Then called the Employment Rights Bill, it included sweeping measures to increase day-one employee protections, extend statutory leave rights, and eliminate potentially exploitative practices, such as zero-hours contracts.
The legislation was finally passed in late 2025 following several amendments. Those changes mean that, rather than a generational overhaul to employment law, we’re instead seeing a phased programme of reform. That creates a challenge for operators and employers, who must now work to understand which measures are due to come into effect, which are confirmed for later, and which remain subject to further consultation.
The Employment Rights Act (2025) will introduce reforms to employment law, effective from April 2026.
These include changes to Statutory Sick Pay (SSP), which will become payable from the first day of sickness absence, alongside the removal of the lower earnings limit for SSP eligibility – although a minimum employment term is still a requirement for UK employers outside of Northern Ireland.
Certain statutory leave entitlements will also apply from day one of employment, increasing access to leave without extending existing qualifying criteria for statutory pay.
These updates have practical implications for payroll configuration, absence management, and manager training, and will require operational changes to Payroll processing and HR policy before April 6th.
Not sure what’s required of you? Download our HR and Payroll Legislation Update 2026 to find out.
One of the Bill’s more controversial proposals was the introduction of unfair dismissal protection from day one of employment. After much debate – and significant pressure from backbench MPs – the Government has rowed back on this proposal. Instead, it is expected to reduce the qualifying period to 6 months of employment.
Crucially, this change is not expected to take effect in April 2026, and current thinking is that it’s more likely to apply from 2027. Automatically unfair dismissal reasons remain unchanged, and probationary periods continue to play an important role in managing performance and suitability during early employment. For hospitality operators, this means there is no immediate change to dismissal risk this year beyond existing obligations.
As Alan Simpson, CEO of UKHospitality, observed during a recent Fourth webinar, “We’ve already seen examples where measures are scaled back or delayed. Businesses are being asked to plan for change without certainty that everything proposed will actually come into force.”
Unfair dismissal protection is not the only measure waiting on the docket for future release. We’re expecting further legislation to be introduced in later phases; this includes reforms to zero-hours contracts and predictable working patterns. Proposals include a right for workers to request more predictable hours and potential compensation where shifts are cancelled or changed at short notice.
While these measures are not yet in force, if and when they do come into effect, they will have a significant impact on how hospitality businesses operate, requiring more structured, long-term planning of shift patterns.
It should be noted that, at this stage, there is very little detail on how the rights will work in practice or when they will apply. Operators must be cautious about making changes ahead of confirmed guidance and commencement dates.
Employment law is devolved in Northern Ireland, and the Northern Ireland Executive is developing its own employment reform programme through the proposed Good Jobs Bill, which has a number of similarities with the UK’s Employment Rights Act (2025).
This legislation has not yet passed through the Assembly and remains in draft form, with presentation expected in early 2026.
For operators with employees in Northern Ireland, this signals a continued move away from a single UK-wide approach to employment law. This creates challenges when tracking divergence and ensuring compliance, and reinforces the need to manage HR and Payroll operations separately by jurisdiction.
Fourth’s award-winning Payroll Bureau takes the pressure out of payroll with a fully managed payroll service. Our expert team in Macclesfield processes over 400,000 payslips a month for operators with staff across the UK and Northern Ireland.
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The phased release of The Employment Rights Act (2025), together with widespread media coverage, has the potential to create confusion among employers, managers, and workers about what is a current requirement, what is a likely future requirement, and what is still under consultation.
Hospitality businesses don’t need to anticipate every possible reform, but they do need to get the basics right. That means ensuring payroll systems are configured for confirmed statutory changes, policies reflect incoming law, and managers are aware of the updates and apply absence and leave rules consistently.
As always, Fourth’s expert payroll team will continue to monitor and update our customers as further measures under the Act are confirmed or revised.
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