From 6 April 2026, new employment rights are expected to come into force under the Employment Rights Act 2025 (ERA 2025).

This article highlights two major changes — collective redundancy consultation protective awards and the creation of the Fair Work Agency — and explains what employers should be doing now to stay compliant.

Collective Consultation During Redundancy

Under the ERA 2025, the maximum protective award for failing to carry out proper collective consultation will increase from 90 days’ pay to 180 days’ pay per employee.

Although the consultation process itself is not changing, the financial penalties for getting it wrong will double.

Based on data from the Office for National Statistics (ONS), the average daily pay in the UK is £134.20. For employers planning more than 20 redundancies in 90 days, this could mean a potential risk of £480,000 or more, if statutory consultation rules are breached.

What employers should do:

• Plan carefullybefore starting any redundancy process. Ensure collective consultation meets all statutory requirements.
• Review your redundancy policyto check it is current and legally accurate.
• Train managerson correct redundancy procedures and the serious financial risks of non-compliance.

The Fair Work Agency (FWA)

The Fair Work Agency (FWA) is a proposed new single enforcement body that will bring together several existing regulators:

• The Employment Agency Standards Inspectorate
• The Gangmasters and Labour Abuse Authority
• HMRC’s National Living and Minimum Wage team

The aim of the FWA is to simplify enforcement and provide a single point of contact for both workers and employers.

Key proposed powers include:

• EnforcingStatutory Sick Pay (SSP) and certain aspects of holiday pay
• Supporting employersthat want to comply with the law
• Bringing tribunal claimson behalf of workers where necessary
• Providinglegal assistance to workers, with costs recoverable from employers found guilty
• Pursuing up tosix years of underpayments, including holiday pay and sick pay, and applying financial penaltieswhere appropriate

What employers should do:

• Audit employment practices, including payroll, contracts, and policies, to ensure legal compliance.
• Pay close attention to holiday pay, as this will be a new focus for enforcement.
• Keep accurate recordsof hours worked, pay, holiday, and contract terms.
• Ensure employment documentsare clear, consistent, and accessible to all employees and workers.

Preparing for Change

The ERA 2025 introduces significant reforms aimed at grow the economy, raise living standards and create opportunities for all. There is more to come, so employers should act now to update policies and prepare for compliance in these areas prior to April 2026

If you’d like help preparing for the changes, get in touch.