Employment Rights Timeline Provides Clarity, But Cost Concerns Remain

The Government has unveiled its comprehensive roadmap setting out how it will deliver its new package of workers’ rights through the plan to Make Work Pay.

Landmark changes delivered through the Employment Rights Bill including sick pay for up to 1.3 million of the lowest earners and day one rights to parental and paternity leave will be introduced for the first time from early next year.

It also announces that the new Fair Work Agency will launch from early next year, creating a level-playing field so rogue employers cannot undercut good businesses who comply with the law.

Informed by more than 190 pieces of engagement with businesses and other crucial stakeholders over the last 12 months, a phased approach was taken to give workers clarity and employers time to prepare. Key measures in the Bill will come into effect in 2026 and 2027, whilst further consultations are planned from this year into next.

The reforms are a key part of the Government’s Plan for Change – the mission to make the country fit for the future by kick-starting economic growth and boosting productivity.

The measures, and when they are set to be introduced, include:

• April 2026: Changes to statutory sick pay, changes to paternity and parental leave, and trade union recognition.
• October 2026: Tipping laws tightened, strengthened employers’ duty to prevent sexual harassment.
• 2027: Introducing rights to guaranteed hours, strengthen existing rights to request flexible working, changes to an employees’ right to claim unfair dismissal.

UKHospitality emphasised the need to use these timelines to constructively engage with businesses on the policy detail.

Some of the first changes to come into force in April 2026, particularly Statutory Sick Pay, could be a significant cost for businesses. The Government must take into consideration the cumulative cost burden facing the sector during consultation periods, particularly on the back of the £3.4 billion additional annual cost that hit the sector in April.

Kate Nicholls, Chief Executive of UKHospitality, said:
“Clear and precise timelines on when aspects of this legislation, and the processes to deliver them, will come into force is essential, and it was important that the Government embark on providing clarity.

“There are substantial and expensive changes for businesses in the Employment Rights Bill and it’s right that the Government is using the appropriate implementation periods for the most complex issues for hospitality, in order to get the details right for both businesses and workers.

“We have been clear with the Government that the changes regarding guaranteed hours and predictability of shifts will be the most complex for hospitality businesses, and therefore necessitates a significant implementation period. I’m important that it has acted on our concerns and it must now use this time to work with businesses on an appropriate policy framework and clear guidance.

“Businesses are understandably wary about the cost and complexity of the more immediate changes in the Employment Rights Bill, particularly alongside increases to NICs, employment costs and business rates.

“Hospitality businesses have absolutely no more capacity to absorb costs and the Government must not increase the sector’s cost burden once again.”