Employment Rights Act 2025: Implementation

Kate Dearden Excerpts

Tuesday 30th June 2026 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

The UK Government are today announcing further progress in the implementation of their landmark Employment Rights Act 2025, as part of the plan to make work pay. This update includes the launch of a public consultation on holiday pay compliance and enforcement, and three Government responses—detriments for workers taking industrial action, electronic balloting, and tipping. Further detail on each is provided in this statement.

As laid out in the “Implementing the Employment Rights” publication, we will not build a robust and growing economy through employment insecurity. Instead, we are building an economy based on fair competition between businesses, greater productivity in the workplace, job security for workers, and fair reward for hard work. The implementation of the Employment Rights Act is a vital step towards doing this, creating the best environment for doing business, maximising job security to raise productivity, improve skills and cut the costs of staff turnover. Meanwhile, offering opportunity and security for working people requires profitable businesses that are supported to invest and grow.

The Government have committed to delivering this change in partnership with businesses, trade unions, public sector employers, and civil society. That is why we are undertaking full and comprehensive consultation with these groups on key changes. By delivering this change together, we are backing businesses that do the right thing and giving hard-working people the job security and opportunities that they deserve.

Consultation 1: Holiday Pay Compliance and Enforcement

The Employment Rights Act enables the expansion of state enforcement to a wider range of pay rights, including holiday pay. The Government want to build a compliance and enforcement framework that is fair, proportionate and effective for both workers and employers. As a part of our framework, the right to holiday pay will, for the first time, be backed by state enforcement, with the Fair Work Agency promoting compliance, investigating non-compliance and taking enforcement action where employers fail to meet their obligations.

The Government will be consulting on the proposed approach to enforcing holiday pay from 2027, as well as consulting on a number of important design features and how the Fair Work Agency can support employers to comply with their obligations.

This consultation will be open for 12 weeks, closing on 22 September 2026.

Government Response 1: Detriments for workers taking industrial action

The Government believe that industrial relations should be conducted with integrity, fairness and mutual respect. Although it should always be treated as a last resort, if workers do choose to express their collective voice through industrial action, it is important that they are treated fairly and respectfully.

The Employment Rights Act introduced new legislation that provided protection for workers from detriments that employers might enact to penalise, prevent or deter them from taking industrial action. This legislation gave the Government the power to introduce secondary legislation to either prohibit all detriments, the Government’s lead option, or to create a prescribed list of prohibited detriments. A consultation ran between 26 February and 23 April seeking stakeholder views on these two options.

The Government response, published on 23 June, sets out that following this consultation the Government will be introducing regulations, coming into force in October 2026, that will ban all detriments and enable awards to be adjusted by up to 25%.

Government Response 2: E-balloting

The Government have been clear that trade union law must be brought into the 21st century. Under current legislation, almost all trade union statutory ballots must be conducted solely by post, which is outdated and risks limiting participation. We are therefore introducing electronic and workplace balloting for certain statutory trade union ballots in a phased approach. In this first phase, electronic balloting will be permitted for all ballots except statutory recognition and de-recognition ballots, while workplace balloting will be extended to industrial action ballots. This will make participation easier and will align with modern voting practices already used widely across political parties and listed companies, supporting the commitment we set out in our plan to make work pay.

To support the introduction of these new voting methods, we are also issuing a new statutory code of practice. The code will provide clear and detailed guidance on how electronic and workplace ballots should be conducted, giving all parties confidence that union ballots are carried out to a high standard.

A consultation on a draft of the code ran from 19 November 2025 to 28 January 2026, seeking views from employers, trade unions, scrutineers and workers to ensure that the guidance is clear, balanced and workable in practice.

The Government response to this consultation, published on 22 June, outlines the changes made to the draft code in the light of the feedback received. At the same time, the updated draft code of practice has been laid in Parliament alongside the necessary secondary legislation to enable electronic and workplace balloting. Both the code and the legislation will be subject to parliamentary scrutiny and will come into effect following approval by both Houses.

Government Response 3: Tipping

The Employment Rights Act strengthens the law, adding a requirement that employers must consult with their workers—if possible, via trade union or other elected workplace representatives—when developing or reviewing their written policy on tipping.

The Government ran a public consultation between 5 February and 1 April. We sought views from stakeholders about how best to implement the new requirements, to support worker participation in the distribution of tips, and enhance the voices of workers. We also sought views about any improvements to the existing statutory code of practice on fair and transparent distribution of tips, to ensure that it remains clear, helpful and effective for workers and employers.

The Government response sets out the feedback received during the consultation, and the changes to be made to the statutory code of practice. The new measures are expected to come into effect in October 2026.

Next steps for consultation

The Government continue to work in collaboration with a wide range of stakeholders to implement their reforms to workers’ rights at pace. Continued engagement with employer and worker representatives is critical to shaping the practical implementation of these plans, helping the Government to deliver reforms that are both effective and inclusive. The Government will continue to keep Parliament updated on the implementation of the Employment Rights Act and the plan to make work pay.

A further package of consultations and Government responses, to follow over the coming weeks, is expected to include a consultation on a new code of practice for fire and rehire, as well as Government responses regarding fire and rehire regulations, trade union access, trade union recognition, and a duty to inform.

[HCWS158]