Whilst some of you might have missed it, the Government passed their flagship Employment Rights Act 2025 (ERA 2025) which gained royal assent on 18 December 2025. Whilst this is set to include a number of significant changes, it should be noted that currently the scheduled timeline for implementation of these changes has pushed back some of the most significant changes by quite some distance with ERA 2025 to be delivered in phases across a two-year period. This is good news for employers as it will afford more time to prepare. It also gives employers a chance to potentially take actions whilst the lower thresholds on dismissals within the first 2 years of employment, still apply. Anticipated timeline from the government for the implementation of the changes as follows: 2026 Changes April 2026: Collective redundancy protective award – doubling the maximum period of the protective award (90 days’ pay to 180 days’ pay). ‘Day 1 rights’ for Paternity Leave and Unpaid Parental Leave. Strengthening whistleblowing protections so that protected disclosures explicitly include sexual harassment (that has occurred, is occurring or is likely to occur) in relation to disclosure qualifying for protection. Fair Work Agency body established by bringing together existing state enforcement functions including regulations for employment agencies and employment businesses, the unpaid employment tribunal award penalty scheme, enforcement of the National Minimum Wage, statutory sick pay and holiday pay. Statutory Sick Pay (SSP) – remove the Lower Earnings Limit and waiting period so SSP payable from first day of illness, instead of the fourth day. Simplifying trade union recognition process (including the removal of the requirement that a union demonstrates that it has 10% membership of the proposed bargaining unit on application to the Central Arbitration Committee (CAC) and replacing this with references to the ‘required percentage test’ (which means 10%, but can be amended to a percentage of between 2% and 10%). October 2026: The changes to ‘fire and rehire’ legislation have been pushed back until October 2026 (dismissing someone and then rehiring them on worse terms and conditions will become an automatically unfair dismissal in most cases unless the statutory exemption applies. This exemption will only apply if the employer can show that the variation was required to eliminate, prevent, significantly reduce or mitigate the effects of financial difficulties which, at the time of the dismissal, impaired the employer’s ability to carry on the business). Increase in Employment Tribunal time limits for making claims from three months to six months. Introducing an obligation on employers not to permit the harassment of their employees by third parties. An employer permits such harassment only if it happens during the course of employment and the employer fails to show they took all reasonable steps to prevent it. 2027 Changes 2027: The major news is that the proposed change to the 2-year unfair dismissal qualifying period has not only been pushed back to 1 January 2027, but also reduced to a 6 month qualifying period rather than being abolished entirely. Note that the cap on the compensatory award for unfair dismissal is being removed (currently the cap is the lower of 1 years’ gross salary or £118,223). This is good news for employers. No further consultation is due although the government has promised an impact assessment on the removal of the compensatory award cap. Expected April or October 2027 – new rights for qualifying workers on zero hours contracts and extending rights to agency workers. Includes the right to be offered guaranteed hours that reflect the number of hours worked in a reference period, to be given reasonable notice of shifts, to be given reasonable notice of cancellation or change of shift and to be given payment for short-notice cancellation, movement or curtailment of shifts. This delay is to allow consultation during 2026 Expected April or October 2027 – introducing a power to enable Regulations to specify steps that are to be regarded as “reasonable” when considering whether an employer has complied with the duty to take all reasonable steps to prevent sexual harassment. Again, this is welcome guidance which is beneficial to employers. In Conclusion As always, this advice is general in nature. As an RMI member you have access to industry experts including Barristers and Solicitors who are fully qualified and specialised in issues affecting the motor and petrol retail industry. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate on 01788 538 399. Motor Industry Legal Services Motor Industry Legal Services (MILS) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.