Employment Rights Act: What co-operatives need to know
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Key changes expected in 2027

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Unfair dismissal

The two-year service requirement for bringing claims of unfair dismissal will reduce to six months from 1 January 2027. The compensation limits for a successful unfair dismissal claim will be removed. 

Restrictions on 'Fire and rehire'

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Dismissing someone and then reengaging them on less favourable terms and conditions will become an automatically unfair dismissal in most cases. The change was originally expected to come into effect in October 2026.

Zero hour contracts

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Workers employed on zero or low hour contracts will be entitled to be offered a guaranteed hours contract reflecting their usual working hours. They will also be entitled to notice or compensation for shift changes. 

Other changes that are expected to take effect during 2027 are: 

  • Statutory (unpaid) Bereavement Leave will be introduced, and Statutory Parental Bereavement Leave will be extended to cover miscarriages before the 24th week of pregnancy.
  • Employers with 250 or more employees will be required to produce mandatory gender pay gap and maternity action plans
  • Pregnant employees or those on or who have recently returned from maternity leave will have increased protection from dismissal.
  • Employers who refuse an employee’s request for flexible working because of a genuine business reason will need to expressly state which of the 8 acceptable reasons they are relying upon and explain why they think their refusal is reasonable. This change will not amend the list of acceptable business reasons and employers should continue to follow the Acas Code of Practice on flexible working when considering employees’ flexible working requests.
  • The rules around collective redundancy processes will change. To specify that they will apply when an employer is making 20 or more employees redundant within a 90-day period across the whole organisation. Currently the rules apply to individual workplaces only, but the Act will introduce an additional trigger which will be based on total redundancies over 90-days across the entire organisation. The government is consulting on where that organisation-wide threshold should sit. Its preferred option is a single fixed number, somewhere between 250 proposed redundancies to 1,000 proposed redundancies regardless of size. 

    The backup proposal is a tiered approach, whereby the employer would have to collectively consult where there are:
    • 250 redundancies within 90-days for organisations with 0-2,499+ employees;
    • 500 redundancies within 90-days for organisations with 2,500-9,999 employees; and
    • 750 redundancies within 90-days for organisations with 10,000+ employees. 

The consultation closes on 21st May 2026, and the new threshold will apply from 2027, subject to parliamentary approval. 

  • There will be further changes to the laws surrounding trade unions and trade union activity in 2027, including the introduction of electronic voting and a new industrial relations framework.
  • The definition of agencies will be extended to include ‘umbrella companies’, allowing for enforcement by the relevant bodies.