Employment Law Update October 2026
The Employment Rights Act 2025 is already reshaping employer obligations, and this month brings two of its biggest reforms. Employers now face a stronger duty to take all reasonable steps to prevent sexual harassment, and liability for harassment by third parties such as customers and clients. The biggest change will be in January 2027, when the qualifying period of service for unfair dismissal claims drops from two years to six months and the cap on the compensation is removed.
Here is a summary of the next wave of changes and, at the bottom of this email, our critical Top 5 things to do now:
1. Duty to prevent sexual harassment
From 30 October 2026, employers will be required to take "all reasonable steps" to prevent sexual harassment in the workplace, expanding the existing duty which only requires “reasonable steps” to be taken. As with the current duty, employers are expected to take proactive measures to prevent harassment. Further guidance on what constitutes “all reasonable steps” is expected, however it will depend on the specific circumstances of the employer e.g. size, sector and type of work. For further information see here.
2. Third-party harassment
From 30 October 2026, employers will be liable for harassment of employees by third parties such as customers, clients or contractors. This means that the employer has to take all reasonable steps to prevent third parties from harassing their staff. This applies to all types of harassment. For further information see here.
3. Employment Tribunal time limits
From 1 October 2026, the time limit for starting certain claims in the Employment Tribunal has increased from three months to six months. This change applies to a wide range of claims, including unfair dismissal, discrimination, whistleblowing, and breach of contract, among others. This will give employees more time to consider their options, gather evidence and initiate proceedings, and could result in more claims against employers. For more information see here.
4. Unfair dismissal qualifying period
From 1 January 2027, the qualifying period for unfair dismissal claims will be reduced from two years to six months. This means that anyone who started in employment on or before 1 July 2026 will gain protection against unfair dismissal on 1 January 2027.
5. Unfair dismissal compensation
From 1 January 2027, the cap on compensation for unfair dismissal (which is currently the lower of 52 weeks’ salary or £123,543) will be removed, therefore significantly increasing financial risk for employers, particularly when terminating senior or highly paid staff.
6. Fire and rehire / contract variation
From January 2027, the ERA 2025 will introduce protections against dismissal for employees who refuse to agree to “restricted variations” in their contracts. This includes terms related to pay, pensions, working hours, among others. These dismissals will be automatically unfair, unless the employer can demonstrate that the variation was necessary due to extreme financial pressures. For further information see here.
7. Trade Union right of access to workplaces
From 30 October 2026, trade unions will have a right to seek physical and digital access to employers with 21 or more workers – i.e. a right to visit and communicate with workers. Critically, a union will not need to show any existing level of membership or support within the workforce before requesting access. This means that unions will be able to establish a presence in workplaces where they are not currently recognised or active, in any company with 21 or more staff. A new Code sets out the detail of the requirements. On receiving a request, employers have just 15 working days to respond, so it is critical that employers are aware of this and ready to respond. For further information see here.
In addition, from January 2027 there will be a new requirement for employers to provide workers with a statement of their right to join a trade union.
8. Acas Codes of Practice
Acas has also started consulting on updating its Code of Practice on requests for flexible working. These changes aren’t expected to come into force until Autumn 2027.
Acas has just finished consulting on updates to its Code of Practice on disciplinary and grievance procedures. This is the first time that the Code will have changed since 2009. The new Code is expected to come into force in 2027.
Top 5 things to do now:
Fill out our free ERA 2025: Compliance Health Check – a quick self-assessment to help employers identify where they are not compliant with the new laws – then email us to arrange a free meeting to discuss the results.
Review current staff – are there any employees with less than 2 years’ service that should be terminated before they gain unfair dismissal rights on 1 January 2027?
Update employment contracts and review the process for managing performance during probationary periods. It is critical that probationary periods are short and closely monitored.
Do a risk assessment to identify and mitigate potential harassment risks and ensure that reporting mechanisms are in place for employees to raise concerns. Review and update anti-harassment and related policies.
If you are an employer with 21 or more staff, get up to speed with the new Trade Union rights of access, so you know how to respond if a request for access is made.
If you would like a fixed fee quote for support with any of these actions, please get in touch.