The Government has announced a number of consultations on proposed employment law reforms forming part of the implementation of the Employment Rights Act 2025. The consultations cover five main areas: flexible working, fire and rehire practices, tipping arrangements, trade union recognition and balloting, and the modernisation of the agency work regulatory framework. Together, these consultations represent the next stage in translating the Act’s primary legislation into detailed regulatory frameworks through secondary legislation and Codes of Practice.
The consultations sit alongside a revised timetable for the implementation of several significant measures under the Act, reflecting the Government’s phased approach to reform and its intention to allow further engagement with employers, workers and representative bodies. The Government has indicated that the outcome of these consultations will inform the scope and timing of the secondary legislation.
Key Points
- The Government has launched multiple consultations as part of the implementation of the Employment Rights Act 2025.
- The consultations cover flexible working, fire and rehire, tipping laws, trade union recognition and balloting, and agency work regulation.
- Many provisions of the Act require secondary legislation, Codes of Practice or guidance before they take effect.
- Several implementation dates have been revised to allow time for consultation and regulatory development.
- Reforms will be introduced on a phased basis through 2026 and 2027.
- The outcomes of the consultations will determine the final scope and operation of key employer obligations.
Consultations: Background
The Employment Rights Act 2025 received Royal Assent in December 2025 and introduced a wide-ranging package of reforms aimed at strengthening worker protections and modernising aspects of UK employment law. While the Act establishes the legal framework for these reforms, many provisions require further regulations, guidance, or Codes of Practice before they can take effect, following further consultations.
As a result, the Government has adopted a staged approach to implementation, combining consultations with a revised commencement timetable for different elements of the Act.
Flexible Working Consultation
The Government has launched a consultation titled “Make Work Pay: consultation on improving access to flexible working”, examining further reforms to the statutory flexible working framework under the Employment Rights Act 2025, as part of its wider programme of consultations on workplace rights.
Under the Act, employers will continue to be able to refuse requests on the existing eight statutory business grounds. However, from 2027, refusals will only be lawful where it is reasonable to rely on one or more of those grounds, introducing a new statutory reasonableness test.
The consultation also proposes a mandatory consultation process. Where an employer intends to refuse a request, it would be required to meet with the employee, explain why the refusal is considered reasonable, and explore alternative arrangements. Employees would be able to challenge refusals before an employment tribunal where the reasonableness test is not met, although the compensation cap would remain at eight weeks’ pay.
The consultation closes on 30 April 2026, with any resulting changes expected to be implemented in 2027, supported by secondary legislation and updated Acas guidance.
Fire and Rehire Consultation
The Government has launched a consultation titled “Make Work Pay: Fire & Rehire – Changes To Expenses, Benefits, and Shift Patterns”, addressing how the Employment Rights Act 2025 will regulate contractual changes imposed through dismissal and re-engagement.
Under the Act, dismissals used to impose “restricted variations” to core terms, including pay, pensions, total hours and holiday entitlement, will be automatically unfair, unless the employer can show it was in severe financial difficulty threatening the viability of the business and that no reasonable alternatives were available. Even where this exception applies, a dismissal will only be capable of being fair where the employer has complied with any statutory collective redundancy consultation obligations (where applicable) and followed the Acas Code of Practice on Dismissal and Re-engagement.
The consultation considers whether expenses and benefits (such as car allowances, share schemes and private medical insurance) and certain shift pattern changes, including moves between day and night or weekday and weekend work, should also fall within the definition of restricted variations. It also covers “fire and replace” scenarios involving replacement with cheaper non-employee labour.
The consultation runs from 4 February to 1 April 2026, with the new statutory protections confirmed to take effect in January 2027.
Tipping Laws Consultation
The Government has issued a consultation titled “Make Work Pay: Strengthening the Law on Tipping”, launched on 5 February 2026 and closing at 11:59 pm on 1 April 2026. The consultation relates to new requirements under the Employment Rights Act 2025 for employers in tipping sectors to consult with workers, through recognised trade unions, elected representatives or directly, when first producing a written tipping policy and whenever that policy is reviewed.
The Act introduces a requirement for tipping policies to be formally reviewed at least every three years, with consultation repeated on each review. Employers would also be required to provide workers at the relevant place of business with a written anonymised summary of the views expressed during the consultation.
Alongside the new consultation duty, the Government is seeking evidence on the operation of the Employment (Allocation of Tips) Act 2023, which has been in force since October 2024, and on the effectiveness of the statutory Code of Practice on the fair and transparent distribution of tips and accompanying non-statutory guidance.
Failure to comply with the consultation and review requirements may give rise to an employment tribunal claim, with potential compensation of up to £5,000 for financial loss. Compliance will also fall within the remit of the Fair Work Agency, which is due to be established in April 2026. The new statutory requirements and an updated Code of Practice are currently expected to take effect in October 2026, subject to confirmation.
Trade Union Recognition and Balloting Consultation
The Government has launched consultations on changes to trade union recognition, derecognition and access arrangements, alongside revisions to related Codes of Practice under the Employment Rights Act 2025.
A consultation issued by the Department for Business and Trade on 4 February 2026, titled “Make Work Pay: recognition code of practice and e-balloting unfair practices”, concerns a revised Code of Practice on Access and Unfair Practices during statutory recognition and derecognition. The proposed Code extends to the entire recognition and derecognition process, rather than only the ballot stage, and includes updates reflecting modern working practices. The consultation does not cover the removal of the 40% support threshold or the “likely majority support” test, both of which are confirmed to take effect on 6 April 2026.
The same consultation also considers changes to the unfair practices regime to support electronic recognition and derecognition balloting. While the revised Code is expected to take effect in October 2026, legislative provision for electronic recognition and derecognition ballots is currently expected in 2027.
Separately, Acas launched a consultation on 20 January 2026 on a draft Code of Practice on time off for trade union duties and activities, reflecting new obligations on employers to provide reasonable accommodation and facilities for union representatives.
Agency Work Consultation
The Government has launched a consultation titled “Make Work Pay: Modernising the Agency Work Regulatory Framework” (issued 6 February 2026), which proposes reforms to the Conduct of Employment Agencies and Employment Businesses Regulations 2003 to reflect changes in the temporary labour market, particularly the increased use of umbrella companies.
The consultation proposes bringing umbrella companies within the scope of the Conduct Regulations, requiring them to meet the same standards as recruitment agencies, including obligations to ensure workers are paid correctly and on time. It also seeks to improve pay transparency by requiring workers to be informed of their actual pay and deductions before accepting an assignment, and to strengthen worker choice by preventing agencies from making work conditional on engagement through a particular umbrella company. Proposals also include restricting or removing opt-outs where workers have not made an informed choice.
The consultation closes at 11:59 pm on 1 May 2026. The proposals sit within the framework of the Employment Rights Act 2025, which expands the definition of an employment business to include umbrella companies. While the Fair Work Agency is due to be established in April 2026 and will be able to enforce the existing agency regulatory regime from that point, its powers to enforce any new umbrella company conduct rules will only commence once the relevant secondary legislation is in force, which is expected in late 2026 or early 2027.
Revised Implementation Timetable
Alongside the current consultations, the Government has confirmed a revised timetable for several measures under the Employment Rights Act 2025, as set out in its updated Implementation Roadmap published on 3 February 2026. The changes reflect the delayed timing of Royal Assent in December 2025 and the Government’s decision to allow additional time for extensive consultations and supporting secondary legislation.
The revised position is as follows:
- Electronic balloting for industrial action will commence in August 2026, later than originally planned, reflecting the technical and regulatory work required following consultation and engagement through the wider consultations programme.
- Electronic recognition and derecognition balloting is being introduced separately and is currently scheduled for 2027, following the conclusion of the relevant consultations and the associated legislative process.
- Trade union recognition reforms, including the removal of the 40% support threshold and the “likely majority support” test, will take effect on 6 April 2026 as planned. These changes are not dependent on consultation outcomes relating to balloting infrastructure.
- Workplace access and unfair practice measures will be implemented through a revised Code of Practice expected in October 2026, following consultation on recognition procedures and unfair practices conducted as part of the broader consultations framework.
- Fire and rehire reforms will come into force on 1 January 2027, having been deferred from October 2026 to align with the implementation of wider unfair dismissal reforms and to allow the consultation on contractual variations to be completed.
Taken together, the revised timetable and the accompanying consultations illustrate the Government’s phased approach to implementation, with substantive reforms being brought into force only once consultation outcomes have been reflected in final regulations, Codes of Practice and guidance.
Conclusion
The launch of consultations on flexible working, fire and rehire practices, tipping arrangements, trade union recognition and balloting, and the agency work regulatory framework represents a significant phase in the implementation of the Employment Rights Act 2025. While the Act has now received Royal Assent, many of its most substantive provisions will be brought into force incrementally through 2026 and 2027, shaped by the outcomes of these consultations and the development of supporting secondary legislation and Codes of Practice.
Taken together, the consultation programme and the revised implementation timetable underline the Government’s intention to phase reform carefully, allowing time for technical detail to be resolved and for employers, workers and representative bodies to engage meaningfully with the proposed changes. As further consultations conclude and responses are analysed, the regulatory landscape will continue to evolve, particularly in areas such as contractual flexibility, workplace representation, tipping practices and the regulation of agency and umbrella working arrangements.
Further consultations may follow as implementation progresses, reinforcing the central role that consultation plays in determining the final scope, timing and operation of the Employment Rights Act 2025.
Employers: What This Means
- Most Employment Rights Act 2025 reforms will not apply immediately and will be introduced on a phased basis following consultation.
- Employers should monitor consultation outcomes closely, as final regulations and Codes of Practice may require policy and process changes.
- Greater procedural formality is expected in areas such as flexible working refusals, tipping policies, and trade union engagement.
- Fire and rehire proposals point to tighter limits on contractual changes imposed through dismissal and re-engagement, increasing the need for careful planning and documentation.
- Businesses using agency labour or umbrella companies should review supply chains and pay arrangements in light of proposed reforms, including the potential for joint and several liability regarding certain worker payments and tax compliance.
