Make UK responds to the UK Employment Rights Act 2025

The manufacturers trade body shares concerns about the government's revised impact assessment of the Employment Rights Act 2025,

The Act has been published following its passage through Parliament and is due to come into force in April 2026.

A new report examines its legal and economic implications. 

However, Make UK says manufacturers remain concerned that the assessment does not fully capture the cumulative and long-term costs for employers.

Jamie Cater, Senior Policy Manager – Employment and Skills, Make UK, says: ‘Following the passage of the Employment Rights Act, it is welcome that the government has revised its impact assessment of the legislation. However, the new assessment appears to give only a partial picture of the true costs facing employers.

‘While retaining a six-month qualifying period for unfair dismissal will reduce costs, the impact is unlikely to be as significant as suggested, particularly given the lack of clarity around the removal of the compensation cap. Other costs, including those linked to guaranteed hours, also remain uncertain pending further policy decisions.

‘With employment costs already a major risk to manufacturers' growth in 2026, the government should work with industry to provide additional support, starting with a statutory sick pay rebate for SMEs - one of the highest direct costs to employers.’

The Employment Rights Act part one, touches on zero-hour contracts, flexible working, statutory sick pay, entitlements to leave, protection from harassment and discrimination, dismissal.

Part two deals with redundancy procedures, public sector outsourcing: protection of workers, duties of employers relating to equality, annual leave records.

While part three encompasses pay and conditions in particular sectors and part four deals with trade unions and industrial action.

Finally, part five deals with enforcement of labour market legislation.

A factsheet on the provisions of the act is also available online.