Episode 210 - Employment Rights Act 2025

This week we will be talking about the Employment Rights Act 2025. This episode content meets PC4 - Practice Management of the Part 3 Criteria.

Resources from today's episode:

Website:

• https://assets.publishing.service.gov.uk/media/696fabb3c0f4afaa9536a0f2/employment-rights-act-2025-overview-factsheet.pdf 
• https://www.acas.org.uk/employment-rights-act-2025 
• https://www.legislation.gov.uk/ukpga/2025/36#:~:text=An%20Act%20to%20make%20provision,on%20employers%20in%20relation%20to

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Transcript

Episode 210:

Hello and Welcome to the Part3 with me podcast. 

The show designed to help Part 3 students kick-start their careers as qualified architects, while offering valuable refresher episodes for practising professionals.

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I am your host Maria Skoutari and this week we will be talking about the Employment Rights Act 2025. Todays’ episode meets PC4 of the Part 3 Criteria.

And make sure to stay until the end for today’s scenario.

This new Act is part of the government’s wider ‘Plan to Make Work Pay’, and it makes some of the biggest changes to employment law seen in years, building on and amending the Employment Rights Act 1996 and other key statutes. It covers elements like zero‑hours and guaranteed hours, dismissal and redundancy, flexible working and family‑friendly rights, harassment and NDAs, trade unions, the new Fair Work Agency, and what’s actually happening when.

Knowledge of such acts is important for you to be aware of because as architects and future business onwers and managers, you are expected to be aware of your employees rights. 

So now lets start by first defining what is the Employment Rights Act 2025:

The Employment Rights Act 2025 is a new UK Act of Parliament which received Royal Assent in December 2025. It doesn’t replace the Employment Rights Act 1996, but it does make substantial amendments and adds new rights across a whole range of areas. From working hours and dismissal through to sick pay, family leave, equality and trade union law.

Most of the changes are being phased in over time rather than all at once. Many measures will start in April or October 2026, and some of the more far‑reaching reforms, like the shorter qualifying period for unfair dismissal, will take effect in 2027.

Now, before we dive into the details, it’s worth picking out the big themes. Very broadly, the Act is trying to do seven main things:

• Curb one‑sided flexibility in the labour market, especially zero‑hours and very low‑hours contracts, and give people more predictable, guaranteed hours.
• Strengthen protection against unfair dismissal and clamp down on ‘fire and rehire’ tactics.
• Improve pay security, including changes to Statutory Sick Pay and the way some sectors negotiate pay.
• Enhance family‑friendly and work‑life balance rights, including paternity, parental leave, bereavement leave and flexible working.
• Tackle harassment and discrimination more robustly, and limit the use of NDAs to silence people.
• Make trade union and industrial action law more protective of workers.
• And finally, beef up enforcement through a new Fair Work Agency and longer time limits for Employment Tribunal claims.

Now think about those themes in the context of an architectural practice. We are a profession that has traditionally relied quite heavily on ‘flexibility’, such as short‑term contracts, unpaid overtime, long hours culture, not much job security, and very patchy HR processes in smaller practices. So quite a lot of this cuts right across how many studios currently operate.

Let’s start with one‑sided flexibility:

Under existing law, you have some protections against abuse on zero‑hours contracts, but the reality for many people has been that the practice can offer you as many or as few hours as it likes, at short notice, and if work dries up, your income just disappears. The Employment Rights Act 2025 introduces a framework for what are sometimes called ‘predictable or guaranteed hours’, aimed particularly at zero‑hours and low‑hours arrangements.

The idea is fairly simple, if a worker has been working a regular pattern of hours over a reference period, the employer has to offer terms that reflect that reality, instead of keeping them nominally on zero hours while still relying on them week in, week out. So at a high level, it will roughly work like this:

• There will be a defined ‘reference period’ during which the worker’s actual hours and patterns are assessed.
• If, during that period, they have been working above the contracted minimum, or are effectively working regular hours on a zero‑hours contract, the employer becomes subject to a duty to offer a contract or a contractual variation that reflects those hours.
• The worker then gets rights to challenge non‑compliance, including if the employer tries to game the system by artificially cutting hours to avoid triggering that duty.

To put this into context, picture a realistic architectural example, and you have a Part 1 which is technically on a one‑day‑a‑week contract, but in reality they’ve been working three days a week for the last nine months, every week, on a big healthcare project. Under the new framework, the practice can’t just leave them on a one‑day contract forever while routinely rostering them for three days. They will be under a duty to bring the contractual hours into line with the real working pattern, giving that person more stable income and associated rights.

Next, let’s look at unfair dismissal, ‘fire and rehire’, and redundancy:

At the moment, to claim ordinary unfair dismissal in most cases, an employee needs two years’ continuous service, and there’s a cap on the compensatory award that a tribunal can make, even if the person’s actual losses are higher. Under the Employment Rights Act 2025, both of those points change.

The Act will reduce the qualifying period for unfair dismissal down to six months of continuous employment, and it will remove the upper limit on the compensatory award, so tribunals can award what they consider just in the circumstances, subject to existing principles about mitigation and so on. That shorter qualifying period is due to take effect in 2027, so again, timing matters, between now and then you still apply the current two‑year threshold, but you should be aware that it’s about to tighten dramatically.

Now, why does that matter in an architectural context? Well, think about all the people who are let go six, nine, twelve months into a role because a particular project falls away, or fees tighten, or the practice reorganises. Once the new threshold is in, many of those people will have unfair dismissal rights. That doesn’t mean you can’t make them redundant, it means you have to follow a fair process and have a fair reason, and be ready to justify both process and reason to a tribunal.

The Act also squarely addresses ‘fire and rehire’. That’s the practice of dismissing staff and offering to re‑engage them on worse terms if they won’t agree to contractual changes. Under the new regime, dismissing someone for refusing certain core contractual changes will, in most ordinary circumstances, be automatically unfair, with only narrow exceptions for businesses in severe financial difficulty where there really is no alternative.

In addition to that, the collective redundancy rules are tightened. The maximum ‘protective award’ for failing to properly consult in collective redundancy situations is increased, and employers are required to look across their whole organisation, not just one site or office, when deciding whether the headcount triggers collective consultation duties.

To put this into perspective again, imagine a firm with studios in London, Manchester and Bristol, each proposing to make 15 people redundant. Under a narrow ‘establishment‑by‑establishment’ test you might say, ‘That’s 15 here, 15 there, under the threshold each time.’ Under the new approach, you add them up across the entity, you may well be over the threshold and therefore obliged to run a proper collective consultation process.

Now, let’s move on to family‑friendly rights and flexible working:

The Act enhances several existing rights by bringing forward when they can be used. For example, paternity leave and ordinary unpaid parental leave become day‑one rights, instead of requiring 26 weeks’ or a year’s service before you qualify. The limitations around taking paternity leave after shared parental leave are lifted, making it easier to combine different types of leave in a way that fits families’ needs.

There is also a new statutory right to unpaid bereavement leave, including in cases of pregnancy loss before 24 weeks. That’s a significant recognition that people need protected time away from work during some of the hardest moments of their lives, without fearing for their job security. In addition to that, protections for pregnant workers and those returning from maternity leave are strengthened, with extended periods during which dismissal will be much harder to justify lawfully. Those changes come in from 2027.

And then we have flexible working. The law has already moved to a day‑one right to request flexible working, but the Employment Rights Act 2025 goes further in tightening the obligations on employers. It will require employers, when refusing a request for a genuine business reason, both to identify that reason from the statutory list and to explain why the refusal is reasonable in the circumstances, aligning with the Acas Code of Practice on flexible working.

For a profession that often defaults to ‘we’re a studio culture, everyone needs to be in, late nights are normal’, that shift is uncomfortable but important. If a Part 2 Assistant for example asks to work four days, or to start earlier and finish earlier for childcare, or to work partly from home, the practice can still refuse if there is a genuine and justifiable business reason. But the bar for that justification is going up, and the expectation is that you will think seriously and record your reasons properly, not just say ‘no’ because that’s how you’ve always done it.

Next let’s move on to one of the most spoken themes in the architecture industry which the act addresses, harassment, NDAs and equality:

Under existing law, employers already have duties not to discriminate and to take reasonable steps to prevent harassment in the workplace. The Employment Rights Act 2025 tightens these duties, particularly around sexual harassment and third‑party harassment.

From October 2026, employers will be liable for harassment of their workers by third parties, think clients, contractors, members of the public on site, unless they have taken all reasonable steps to prevent it. That wording is deliberately stronger than the previous ‘reasonable steps’ test. It sets a higher bar for what employers must do in terms of policies, training, supervision and culture.

Alongside that, sexual harassment is specifically in focus. The duty to prevent sexual harassment becomes more demanding, and in 2027 regulations will provide more detail on what counts as ‘reasonable steps’ in practice. So things like regular, meaningful training, clear reporting routes, prompt and fair investigations, and leadership accountability are likely to be part of that picture.

The Act also strengthens whistleblowing protection by ensuring that disclosures about sexual harassment can qualify for whistleblower status, with associated protection against detriment and unfair dismissal. That gives people a safer route to raise issues that might previously have been buried.

And then we have non‑disclosure agreements – NDAs. The Act makes provisions that limit the ability of NDAs to stop people from speaking about harassment or discrimination they’ve experienced. In other words, if a practice tries to use a confidentiality clause in a settlement agreement to silence someone about unlawful harassment, that clause is likely to be unenforceable. For larger employers, there will also be a requirement to produce action plans on closing gender pay gaps and supporting workers experiencing menopause symptoms, with voluntary measures becoming mandatory over time. Many architectural practices won’t be big enough to fall into the mandatory category straight away, but again, as a matter of best practice and culture, it’s worth keeping an eye on these expectations.

Next, let’s move to trade unions and industrial action:

The Employment Rights Act 2025 rolls back the ‘minimum service levels’ regime that restricted strikes in certain services, and it strengthens protection for workers taking part in industrial action. Dismissal for participation in industrial action becomes automatically unfair without the old 12‑week time limit, making it riskier for employers to fire staff who strike.

Notice periods for industrial action are reduced, ballot mandates are extended from six months to twelve in many cases, and some of the more onerous requirements around picketing, like having a named picket supervisor, are removed. Over time, there will also be more scope for ballots to be conducted electronically or in person rather than purely by post, subject to safeguards.

On the employer side, there will be new duties to inform workers of their right to join a union and to allow reasonable union access to the workplace, as well as stronger protection against discrimination or blacklisting based on union membership or activity.

For an architectural practice, even if you’re not currently dealing with unions, it’s worth noting that junior staff may become more organised over issues like pay, hours, and diversity. As a manager or director, their role under this new framework will be to respect lawful union activity, engage constructively where unions are present, and avoid any suggestion of penalising people for being involved.

Now, let’s talk about another key part of the Act, Fair Work Agency and enforcement:

Under this, the Employment Rights Act 2025 creates a new body called the Fair Work Agency. This agency will bring together various enforcement functions that were previously spread across different inspectorates. Things like National Minimum Wage enforcement, some aspects of agency work, and tackling serious labour exploitation.

The Fair Work Agency is given stronger investigative powers and the ability to impose civil penalties, and it will also be able to bring or support cases on behalf of workers in certain areas. It is backed by an advisory board with representation from business, trade unions and independent experts, which is intended to keep its approach grounded and balanced.

Two other enforcement‑related changes which will matter a lot at practice level include: 

• Firstly, the time limit for bringing most Employment Tribunal claims is extended from three months to six months. That means employees, including architects and assistants, have a much longer window to seek advice and initiate claims around things like dismissal, discrimination and wage issues. 
• And secondly, enforcement around holiday pay, sick pay and similar entitlements is due to be strengthened, making it harder for employers to quietly underpay without consequences.

In architectural practices, that means they should not assume that ignoring the finer points of holiday pay, or keeping people on de facto zero‑hours arrangements, will go unnoticed. The enforcement environment is becoming more proactive and more joined‑up.

And lastly lets look at the other changes under the act which cover sick pay, outsourcing and sector‑specific tweaks:

Starting with Statutory Sick Pay, the Act reforms it so that it becomes payable from day one of sickness, instead of from day four, and removes the lower earnings limit that previously excluded some lower‑paid and part‑time workers. For junior staff or people on reduced hours in architectural practices, that’s a meaningful improvement in protection if they fall ill.

Another key change is the focus on outsourcing and so‑called two‑tier workforces. The government is re‑introducing a form of ‘two‑tier code’ for public sector outsourcing to ensure that staff transferred out of the public sector, and new starters on outsourced contracts, are treated in a way that is broadly comparable to in‑house staff. If your practice works heavily in the public sector and you’re involved in TUPE transfers or framework agreements, that’s relevant when you’re structuring teams and pricing bids.

There are also sector‑specific measures, such as a Seafarers’ Charter and changes for maritime workers, and negotiating bodies for adult social care and school support staff. They won’t directly touch most architects, but for Part 3 they illustrate a trend towards sectoral approaches in some parts of the labour market.

Finally, let’s close off with a quick timeline from the Act:

• Dec 2025 – Employment Rights Act 2025 becomes law (Royal Assent), with powers to bring changes in over 2026–27.
• Jan 2026 – First commencement regulations set up the framework for guaranteed hours, notice of shifts and pay for cancelled shifts (detailed worker rights come later). 
• Feb 2026 – Trade union changes start: shorter notice for industrial action, longer mandate for strike ballots, and dismissal for taking part in industrial action becomes automatically unfair.
• Apr 2026 – Fair Work Agency starts operating, and the first wave of reforms such as Statutory Sick Pay from day 1 and broader access to SSP for low‑paid/part‑time workers begins.
• From Apr 2026 (by regulations) – Paternity and unpaid parental leave move towards day‑one rights; new unpaid bereavement leave is introduced, including for pregnancy loss.
• Aug 2026 – Electronic/workplace balloting becomes possible for industrial‑action ballots (subject to conditions).
• Oct 2026 – Tribunal time limits start moving to 6 months, employers face tighter harassment duties, including liability for third‑party harassment unless they take all reasonable steps.
• Jan 2027 – Major switch‑on: unfair dismissal qualifying period drops to 6 months and the cap on compensation is removed, ‘fire and rehire’ is heavily restricted and collective redundancy rules tighten (organisation‑wide headcounts).
• During 2027 (dates tbc) – Detailed rights for zero/low‑hours staff to request guaranteed hours, notice and compensation for cancelled shifts, stronger flexible working refusal test, clearer “reasonable steps” standard on sexual harassment, NDA limits, mandatory gender‑pay and menopause action plans for larger employers.

Let’s sum what we ran through today:

• This is a major shift in UK employment law, strengthening worker protections across hours, pay, dismissal, and workplace rights.
• The industry’s reliance on “flexibility” (long hours, short contracts, weak HR) is being directly challenged.
• Employers will need to justify decisions more carefully, especially around dismissal, flexible working, and contract terms.
• Workplace culture matters more than ever, with stronger rules on harassment, equality, and transparency (including limits on NDAs).
• Enforcement is getting tougher, with a new Fair Work Agency and longer tribunal windows, so compliance can’t be treated lightly.
• Changes will be phased over the next coming years through to year 2027.