Employment Rights Act 2025

Ruth Campbell
Trainee Solicitor
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April 2026 Changes Explained

In March 2026, the Government published commencement regulations bringing a number of changes under the Employment Rights Act 2025 (ERA 2025) into force on 6 April 2026. Three of the changes — the doubling of the protective award for collective consultation failures, the extension of whistleblowing protection to sexual harassment disclosures, and the simplification of trade union recognition — had been widely anticipated.

One had not. Tucked into the regulations, with no formal Government announcement and no mention in the Department for Business and Trade’s own implementation timeline, was a new statutory duty requiring all employers to keep records of holiday entitlement and holiday pay for six years — with non-compliance a criminal offence. Employment lawyers only identified the measure after the regulations were published, leaving employers little more than a week to prepare.

This guide explains each of the four changes, who they affect, and the practical steps employers should be taking now.

What Changed on 6 April 2026

Several significant changes under the Employment Rights Act 2025 came into force on 6 April 2026. The table below summarises each one, what it means in practice, and who it affects.

Enforcement context matters here too: the Fair Work Agency — a new enforcement body with powers to investigate employers and inspect workplaces — was established the following day, on 7 April 2026.

Change 1: Protective Award for Collective Consultation Failures Doubles to 180 Days’ Pay

Where an employer proposes 20 or more redundancies at a single establishment within a 90-day period, the duty to collectively consult is engaged. Where an employer fails to comply with that duty, affected employees’ representatives can bring a claim for a protective award.

Key points:

• From 6 April 2026, the maximum protective award doubles from 90 days’ pay to 180 days’ pay per affected employee.
• There is no cap on the amount of a day’s pay for this purpose — the award is based on gross pay.
• The increase applies to dismissals taking effect on or after 6 April 2026.

Why it matters: this dramatically raises the financial stakes of getting collective consultation wrong. For a workforce of 50 affected employees on average pay, the potential exposure has doubled overnight. Employers planning restructures should build consultation compliance into project timelines from the outset, rather than treating it as a procedural afterthought.

Change 2: Disclosing Sexual Harassment Now Amounts to Whistleblowing

From 6 April 2026, sexual harassment is expressly added to the list of ‘relevant failures’ in whistleblowing legislation. A worker who discloses that sexual harassment has occurred, is occurring or is likely to occur — whether relating to themselves or to others — may now make a protected disclosure.

Workers who make a protected disclosure are protected against:

• Detriment — any adverse treatment because the concern was raised, such as hostility, exclusion or being denied opportunities; and
• Unfair dismissal — dismissal for making a protected disclosure is automatically unfair, with no minimum service requirement and no cap on compensation.

Previously, a worker disclosing sexual harassment had to show the disclosure fell within an existing category of wrongdoing — such as a criminal offence or a health and safety risk — which could be a tenuous fit. The change removes that uncertainty. The usual conditions for whistleblowing protection still apply, including the requirement that the worker reasonably believes the disclosure is in the public interest and that it is made to an appropriate person.

Why it matters: a sexual harassment complaint may no longer sit solely within grievance or conduct procedures — it may simultaneously engage whistleblowing protections. How managers respond to such a complaint now carries additional legal risk, and mishandling could give rise to both Equality Act and whistleblowing claims.

Change 3: Easier Statutory Recognition for Trade Unions

Changes simplifying the statutory trade union recognition procedure also took effect on 6 April 2026, making it easier for trade unions to obtain statutory recognition. Employers — particularly those in sectors with active union organising — should be aware that the procedural landscape has shifted in unions’ favour, and may wish to take advice if approached about recognition.

Change 4 (The Surprise): A Duty to Keep Holiday Records for Six Years

The change that caught employers off guard. The commencement regulations brought into force section 35 of the ERA 2025, which amends the Working Time Regulations 1998 to impose a new record-keeping duty on all employers from 6 April 2026.

What must be recorded

Employers must keep records ‘adequate’ to demonstrate compliance with statutory annual leave obligations, including:

• Workers’ statutory holiday entitlement (the minimum 5.6 weeks per leave year, comprising the 4 weeks’ basic and 1.6 weeks’ additional leave);
• Leave actually taken;
• Holiday pay calculations and payments made, including variable pay elements such as overtime, commission and bonuses where relevant;
• Payments in lieu of untaken statutory leave on termination, including for leave carried over from a previous holiday year.

Key features of the duty

Here’s a quick-reference summary of what the new holiday records duty actually requires in practice.

The practical trap: data retention policies

Many employers operate GDPR-driven data retention schedules that delete HR records on shorter cycles — commonly two or three years. If it has been your practice to destroy holiday records within a shorter timescale, that practice must now stop in respect of records created from 6 April 2026 onwards. Retention policies should be updated to reflect the six-year statutory minimum for holiday data, and the legal basis for the extended retention documented to keep data protection compliance aligned with the new duty.

Employer Action Checklist

A step-by-step employer action checklist:

1. Stop deleting holiday records. Review data retention and destruction schedules immediately and carve out holiday entitlement and pay records for six-year retention.
2. Audit your record-keeping. Check that your HR and payroll systems can evidence entitlement, leave taken, holiday pay calculations and termination payments — for all workers, including irregular hours and part-year staff.
3. Update whistleblowing policies. Expressly list sexual harassment as an example of wrongdoing capable of amounting to a protected disclosure, and align whistleblowing, grievance and harassment procedures so complaints are triaged correctly.
4. Train managers and HR. Ensure those receiving sexual harassment complaints understand the complaint may also be a protected disclosure, and how to respond without creating detriment or victimisation risk.
5. Build consultation into restructure planning. With the protective award doubled and a day’s pay uncapped, the cost of non-compliance with collective consultation has risen sharply.
6. Review documentation. Identify and amend any policies — most likely expenses of redundancy, whistleblowing, annual leave and data retention policies — that reference the old positions.
7. Prepare for the Fair Work Agency. Proactive inspection is now possible without a complaint, so a defensible audit trail matters more than ever.

Frequently Asked Questions

We’ve set out below the questions we’ve been asked most often about these Employment Rights Act 2025 changes. If you have a query that isn’t covered here, please get in touch with our team.

When did these changes take effect?

All four changes came into force on 6 April 2026, brought in by commencement regulations published in March 2026. The Fair Work Agency was established the following day, 7 April 2026.

Why was the holiday records duty a surprise?

The Government made no formal announcement about it, and the measure did not appear in the Department for Business and Trade’s published implementation timeline. It was identified by employment lawyers in the commencement regulations after publication, with no transitional provisions to give employers time to prepare.

Do the six years apply to historic holiday records?

The duty applies to records created from 6 April 2026 onwards, which must then be retained for six years from the date they were made. However, retaining earlier records where you still hold them may assist in defending historic holiday pay claims.

Is there a prescribed format for holiday records?

No. Records can be kept in any format the employer reasonably thinks fit, but they must be adequate to demonstrate compliance with entitlement, pay and termination payment obligations.

What happens if we don’t keep adequate holiday records?

Failure to comply is a criminal offence punishable by a fine. Inadequate records will also make it harder to defend holiday pay claims or a Fair Work Agency investigation.

Does the protective award increase apply to redundancies already underway?

The increased 180-day maximum applies to dismissals taking effect on or after 6 April 2026.

Does a sexual harassment complaint automatically qualify as whistleblowing?

Not automatically. The usual requirements for a protected disclosure still apply — including the public interest test and disclosure to an appropriate person — but sexual harassment is now expressly a category of wrongdoing capable of protection.

Were any other changes made in April 2026?

Yes. Separately, April 2026 also brought day-one rights to statutory sick pay (with the lower earnings limit removed), and day-one rights to paternity leave and unpaid parental leave, among other ERA 2025 measures.

How Just Employment Law Can Help

If you have any questions about how these changes may affect your business or organisation — from updating whistleblowing and data retention policies to managing collective consultation — or if we can provide support or assistance on any other employment law matter, please do not hesitate to contact a member of the Just Employment Law team on 0141 331 5150.

This article is provided for general information only and does not constitute legal advice. Position stated as at May 2026. For the underlying legislation, see the Employment Rights Act 2025 and the relevant commencement regulations on legislation.gov.uk.

Topics: Employment Rights Act, Employment Rights Bill