Updated Implementation Timeline for 2026 and 2027
For UK employers, particularly SMEs planning workforce strategy and HR compliance updates, understanding these revised dates is essential.
The latest update refines the timetable originally set out in the Government’s Plan to Make Work Pay (1 July 2025) and confirms several important changes to expected commencement dates.
Here’s what you need to know.
Key Employment Law Changes Confirmed for 2026
Fair Work Agency – 7 April 2026
A confirmed date has now been set for the establishment of the Fair Work Agency (FWA):
7 April 2026.
The FWA will consolidate enforcement powers currently held by multiple bodies and will have authority to:
- Enforce statutory employment rights
- Recover underpayments directly
- Bring Employment Tribunal claims on behalf of workers
- Recover costs from employers where claims succeed
For businesses, this signals a move towards stronger and more proactive enforcement of employment rights in 2026 and beyond.
Trade Union Balloting Reform – August 2026
Changes to electronic and workplace balloting for statutory trade union ballots will now take effect in August 2026.
These measures were previously expected to form part of the April 2026 reforms, but have been separated and delayed.
The introduction of electronic balloting is likely to modernise union processes and may increase participation in industrial action ballots.
Employers in unionised or potentially unionised environments should monitor this development closely.
Fire and Rehire Reforms – Delayed to January 2027
Measures aimed at restricting controversial “fire and rehire” practices were initially expected in October 2026.
These reforms have now been postponed to January 2027.
The delay provides additional time for consultation and development of the final legislative framework. However, employers should not assume current practices will remain unaffected in the long term.
Advance planning around contractual change strategies remains advisable.
Removal of the Unfair Dismissal Compensation Cap – January 2027
Another significant reform scheduled for January 2027 is the removal of the cap on compensatory awards for unfair dismissal.
Currently, unfair dismissal compensation is subject to a statutory maximum. Removing this cap could substantially increase financial exposure for employers in dismissal disputes.
Combined with the planned reduction in the qualifying period for unfair dismissal (to six months’ service), this change may significantly increase both:
- The volume of claims, and
- The potential value of awards.
For SMEs especially, this raises the importance of robust dismissal procedures and documented decision-making.
What This Means for Employers
The updated Employment Rights Act 2025 timeline confirms that reform will continue to roll out gradually through 2026 and 2027.
Importantly:
- Enforcement powers will strengthen from April 2026.
- Trade union processes will modernise in August 2026.
- Dismissal risk exposure may increase substantially from January 2027.
The Government has confirmed that timings remain under review while consultations continue, meaning further refinements are possible.
Preparing for Employment Law Changes in 2026 and 2027
Employers should now:
- Review dismissal and redundancy procedures
- Assess exposure to potential unfair dismissal claims
- Monitor developments in fire and rehire regulation
- Prepare for stronger enforcement under the Fair Work Agency
- Update HR policies in line with confirmed commencement dates
Early preparation reduces legal risk and avoids reactive compliance under time pressure.
Employment Law Support for UK Employers
At Montgomerie Consulting, we support SME and growing businesses with practical, commercially focused employment law advice.
If you would like support preparing for the Employment Rights Act 2025 reforms or reviewing your HR policies ahead of 2026 and 2027 changes, please get in touch.