Are you ready for October’s newest Employment Rights Act changes?

With the Employment Rights Act 2025 coming into law on 18 December 2025, employers across the country have been making arrangements to accommodate new provisions related to holiday pay, statutory rights, employee protections against workplace harassment and more.

The Act represents the biggest changes to UK employment law in decades and is therefore being rolled out in a series of stages. A number of major changes came into play from April of this year, with the next significant batch set to become active in October.

For manufacturers, some of these changes are particularly important – with wide-reaching legal implications and cash outlays required to proactively combat them. We spoke to Carl Johnson, UK Sales Director at manufacturing asset finance specialist Anglo Scottish, and Lisa Branker, Head of Employment Law at Beecham Peacock solicitors, to find out more.

Which changes should you already be aware of? Which are coming soon? How can you prepare and pre-empt your policies? Find out below.

Improve harassment training and policies at all levels

From October of this year, employers will be liable for harassment from third parties, such as customers or clients, unless they have taken “all reasonable steps” to prevent such activity from happening. This will apply to all types of harassment.

Manufacturers will need to be particularly wary of this, given that they face higher operational risk than other sectors. Third parties are often, constantly on site, from contractors to maintenance workers, delivery drivers and more. This, coupled with manufacturing’s male-dominated nature and the fact that agency workers may receive less induction and training to become accustomed to workplace culture, places manufacturers are at risk.

To cover this, says Branker, “manufacturing employers need a clear anti-harassment policy, tailored to their workplace, as well as regular training and simple methods for reporting harassment that are visible across all shifts.”

Johnson continues: “Now, more than ever, it’s worth allocating budget, taking the time to invest in induction training and taking visible action when standards are breached.”

Audit payroll calculations for shift workers

Under new employment regulations, incorrect holiday pay or SSP calculations can lead to increased repayment liabilities and penalties – and, as always, lead to reputational damage. This is another area where manufacturers face a higher level of operational risk, thanks to the commonality of shift work, overtime, shift premiums and more.

In April, during the previous round of employment reforms going live, the Fair Work Agency was established, helping enforce employment rights such as holiday pay and statutory pay.

“So, your business could already be at risk,” says Branker. “Before the next round of employment rights laws come into play, we recommend proactively auditing your payroll calculations, especially if you have a large number of shift workers. Opting to audit payroll – before an inspector does – is likely to save your company money in the long run.”

Johnson adds: “Small errors over statutory payments or holiday pay can easily accumulate into substantial back-pay bills, impacting manufacturing cash flow and spiralling into a six-figure liability for larger manufacturers. If your business works to a financial year-end of 31 December, push to include payroll auditing in the following year’s budget.”

Invest in robust HR policies

“Manufacturing employers need to also be aware that time limits for employment tribunals will double from October 2026,” says Branker. “From October, employees will have twice as long to bring tribunal claims against their employers. Practically, this means manufacturers will have to keep HR records for longer and improve their data handling and documentation processes.”

“Financially, this means manufacturing businesses must plan for a longer period of exposure,” says Johnson. “Employment disputes can last for twice as long, which, in theory, means more expenditure on legal costs, management time and settlement discussions.

“There’s also the worry that key witnesses might come from key production facilities, disrupting ongoing operations. So, investing early in robust HR documentation is the best course of action for manufacturers that wish to protect themselves against budget-busting litigation in the long term.”

Factor employment law into restructuring budgets

Another change that manufacturers must be aware of is the increase in financial penalties for collective redundancies with mishandled consultations. From April of this year, the maximum ‘protective award’ for failure to consult doubled from 90 days to 180 days. This means that the price of a mishandled consultation is now materially higher.

“For manufacturers, this is particularly prudent, given that a huge chunk of sector businesses are investing in increased automation to increase throughput and reduce labour costs,” says Johnson. “When preparing the business case for replacing manual jobs with automated equipment, the cost of collective consultation must be included, alongside traditional considerations like equipment purchase, installation and commissioning.”

Branker adds: “External employment law advice might be required if substantial restructuring is taking place and employees need to be redeployed or retrained. The cost of your investment in legal advice to ensure you meet consultation obligations is likely to be substantially less than protective awards under the new legislation.”

So, is your business prepared? If you have not already made provisions for key points from April’s batch of new laws, you might be lagging behind. And, with more changes slated for 2027, there’s still work to do.