10 of the most asked questions from business owners about the Employment Rights Act

The Employment Rights Act achieved Royal Assent on 18 December 2025. Here, our Head of HR Advisory, Simon Obee, has answered 10 of the most asked questions we have received about the new legislation. 

For a full in-depth look at the Employment Rights Act 2025, what it means in practice and how employers can start preparing now, download our free Employment Rights Act 2025 guide here.

1. What are possible grounds for refusing a flexible working request in the Employment Rights Act? Will employers have to provide evidence of why it is not reasonable to the requester?

The new laws will not change the possible grounds for refusing a flexible working request. The eight grounds for refusing a flexible working request remain the same as is the case now. 

These are:

• The burden of additional costs.
• Detrimental effect on ability to meet customer demand.
• Inability to reorganise work among existing staff.
• Inability to recruit additional staff.
• Detrimental impact on quality.
• Detrimental impact on performance.
• Insufficiency of work during the periods the employee proposes to work.
• Planned structural changes.

For more information, see paragraph 9 of the Acas Code, here: https://www.acas.org.uk/acas-code-of-practice-on-flexible-working-requests/html)

What the Act changes is to require a refusal of a flexible working request to be reasonable, rather than it being a  completely subjective test. In other words, the employer must act reasonably in deciding that the flexible working request cannot be agreed on one of the above grounds.

Employers will also now have to explain to employees why it was reasonable to refuse a request, although there is no specific requirement to provide evidence. .

These changes will come into effect in 2027. 

2. Does the Employment Rights Act ban “fire and rehire”? What recourse does a company have if employees refuse a new working pattern after consultation?

The Employment Rights Act does not ban “firer and rehire” outright, but will make it unlawful to dismiss an employee (or threatening to dismiss an employee) for refusing certain important variations to their employment contract (concerning pay, hours, time off, etc).  

It will also be unlawful to dismiss an employee in these circumstances and rehire them to do the same role with amended terms and conditions (or to hire another employee, agency worker or contractor in their place).

One exception where “fire and rehire” will still be allowed (even where changing terms of the contract regarding pay, hours or time off) will be where this is required due to severe financial difficulties the employer is facing – although this will be a hard test to meet.

This change is expected to be implemented in 2027.

3. With the new rules about offering employees on zero-hours contracts guaranteed hours of work, could you instead give someone a fixed-term contract?

There isn’t an automatic exclusion for employees on fixed-term contracts under the new provisions which deal with offering employees on zero hours contracts / low hours contracts a guaranteed number of hours, based on the hours they work over a particular “reference period”. The length of the “reference period” is still to be set by future regulations, but the government has suggested that it may be a 12 week period. 

It would seem to follow that if the “reference period” over which the guaranteed hours are calculated is prescribed by regulations as being 12 weeks, and an employee is engaged on a fixed-term contract for 10 weeks and then their employment ends, this will mean that there won’t be an obligation to offer them guaranteed hours at all (as they will not longer be an employee after the 12 week reference period).

The employee could then potentially be offered a new fixed-term contract (with zero or lower numbers of guaranteed hours)

Although the Act does have “anti-avoidance” provisions to stop employers improperly avoiding these new provisions, it would seem if there is a genuine need to engage an employee on a short fixed-term basis, where they will work a pattern of hours that an employer will not realistically be able to offer on an ongoing basis, using a number of short fixed-term contracts may be a way for employers to manage variations in working patterns. Particularly those that involve short periods of heightened demand. 

The guaranteed hours duty will apply from some point in 2027.

4. In seasonal businesses, it is usual for employers to have employees on a variable hours contract. How would a guaranteed hours contract affect our ability to increase and decrease hours seasonally?

This is one area of concern that many commentators have raised with the Act, as it will obviously be a challenge to have to offer guaranteed hours in sectors affected by seasonal variations (retail, leisure, hospitality) where workers tend to work much longer hours at certain times of the year than in others.

If an employer has to offer guaranteed hours based on the employee’s hours during a busy seasonal period, this isn’t going to align with the number of hours an employer would ordinarily require the employee to work in a quieter period.

As explained above, the Act does seem to envisage that in some circumstances it will be possible to engage an employee on a fixed-term contract without guaranteed hours where it is reasonable to do so (which could feasibly cover seasonal workers). 

The finer details of how all this will work will be set out in future regulations and we will be providing further details about this as soon as they become public.

5. Will statutory sick pay (SSP) be paid from day one of absence??

Statutory sick pay (SSP) is currently paid from the fourth day of absence.Going forward, SSP will be paid from the first day of absence. Employees won’t need to be off for four days in order to be paid SSP. The lower earnings threshold to be eligible for SSP will also be abolished (although low-earning employees will only be eligible to a lower related rate of SSP). 

Statutory Sick Pay will become a day one right from April 2026.

6. Are there any changes in the Act for maternity leave?

The Employment Rights Bill will give the Government power to introduce regulations to prevent other dismissals (i.e. that are not redundancies) taking place during pregnancy, maternity leave or following return to work. 

Since the release of the Employment Rights Act, this has been extended to pregnancy and all statutory family leave, with a likely automatic unfair dismissal protection until at least 6 months post-return. 

The Bill also makes clear that this enhanced protection will apply to other family leave e.g. shared parental leave. Whilst the detail is still unclear, the explanatory notes to the Bill suggest that these changes will ban dismissals of women who are pregnant, on maternity leave, and during a six month return to work period, except in specific circumstances. We do not yet know what “specific circumstances” means.

Protections extended to pregnancy and all statutory family leave will be effective from 2027.

7. Which provisions in the Bill relate to equality and inclusion?

The strengthening of flexible working obligations for employers obviously supports a level playing field being created for employees who have traditionally benefited from flexible working arrangements (parents, carers, people with a disability, etc).

The provisions of the Bill which will allow the government to make Regulations requiring employers with 250 or more employees to publish equality action plans (on gender pay gaps, support with employees who are going through the menopause or support for employees suffering from menstrual difficulties) are aimed at creating more equality for women in the workplace.

Similarly, given women are more likely to suffer from sexual harassment than men in the workplace, the provisions in the Bill that increase obligations regarding preventing sexual harassment will further gender equality in employment.

Equality Action Plans are required from businesses with 250+ employees from 2027.

8. How should we consult staff about implementing the changes set out in the Bill?

We would say that best practice would be to consult with staff as early and as broadly as possible about any changes that may affect them, and to ensure that you consult with staff that are absent from the business too (for example those on family leave).

Consider that employees may have different working patterns and preferred methods of communication. They may not feel comfortable raising concerns in a group setting so think about different ways in which they can communicate with you (can you offer individual meetings if someone wants to discuss an issue and/or allow them to raise matters by phone or email?). Remember too that English may not be the first language of all of your employees so think about whether you need to distribute information in a way that will cater for this. Also encourage managers to discuss matters in team meetings and one-to-ones.

Employees are likely to feel supportive of any changes if they are told why the business is considering making changes, and if the employees are able to have a voice in decisions that impact the workforce.

9. Will the potential changes to flexible working and unfair dismissal rights apply to PAYE Agency Workers?

Agency workers employed directly by an employment agency (but who work in a “host” employer) cannot currently claim unfair dismissal against their host employer, but can of course claim it against the direct employer (ie the agency).

This will not change under the Employment Rights Bill. Agency workers will be able to claim unfair dismissal against their agency employer from day one of employment.

However, if the reason the agency needs to terminate their employment is because the host employer no longer requires them, this will generally provide a valid reason to terminate their employment and avoid a successful unfair dismissal claim, subject to the employment agency following the correct process prior to terminating the employment.

The potential changes to flexible working apply equally to employees of employment agencies – the fact that they are employed by an employment agency makes no difference.

Unfair dismissal qualifying period will be reduced to 6 months according to the Employment Rights Act 2025 and will take effect from January 2027.

10. What is the timeline for the Employment Rights Bill to come into effect?

The government has said there will be a phased 2026–2027 timeline for the changes. Learn more about specific dates for each of the changes in our Employment Rights Act 2025 guide. 

Stay up to date with Employment Law changes with Employment Hero

Staying up to date with legislation is difficult for any business and it can often feel like a bit of a minefield. This is why we are trying to make staying compliant less daunting. 

At Employment Hero we’ll be providing lots more blogs, guides and webinars as the changes from the Employment Rights Act 2025 come into place.  

If you’re still feeling confused about what the Employment Rights Bill means for your business, get in touch with one of our HR Advisors today.

Why not take a look at our Employment Rights Act 2025 timeline?