Andy Burnham Inherits Britain's Biggest HR Overhaul

Andy Burnham walked into Downing Street on Monday as Britain's seventh prime minister in a decade. Every HR director in the country should read his in-tray, because the largest overhaul of employment law in a generation is now his to deliver, half-built.

Burnham takes office with the Employment Rights Act 2025 mid-rollout. In his victory speech he promised to "put the care of people at the heart of everything I do". He now owns the law that makes every employer do the same. 

What lands, and when

The Act reaches England, Scotland and Wales in phases across 2026 and 2027, with the government confirming the timetable only last week. Three dates matter most.

• 1 October 2026. The window to bring an employment tribunal claim doubles, from three months to six.
• 30 October 2026. A new duty on employers to take "all reasonable steps" to prevent sexual harassment takes effect, with stronger union access and recognition rights alongside it.
• 1 January 2027. Unfair dismissal protection begins after six months of service, not two years. Then the cap on compensation disappears.

Rain Newton-Smith, CEO of the Confederation of British Industry, says industry "will welcome Andy Burnham's clear focus on growth", but the group has branded the employment reforms "damaging" and priced their cost to employers at an extra £5bn (US$6.4bn) a year.

A Chartered Institute of Personnel and Development study found four in five employers bracing for higher costs under the new rules.

The changes with teeth

From January, a worker can claim unfair dismissal after six months rather than two years, so probation is no longer a formality but the whole test. Then the cap comes off. An ordinary claim is limited today to £123,543 (US$158,000); from 2027 a tribunal can award whatever it judges fair.

The average payout ran at about £14,000 (US$18,000) across 2023 and 2024. Lawyers expect that number to climb sharply for senior staff, who will fold lost bonuses and share awards into their claims.

For HR, the guesswork is over. "The focus for employers now needs to shift from preparation to compliance," says Peter Cheese, CEO of the CIPD, who calls the reforms "far reaching, from the expansion of day one family-related rights to changes to statutory sick pay".

Where employers are most exposed

In an Acas survey of more than 1,000 British decision-makers, changes to statutory sick pay topped the list of hardest reforms to absorb, but day-one paternity leave came close behind, named by roughly a quarter as their toughest adjustment.

It is a rota and cover problem as much as a legal one, since employers lose the qualifying runway they once planned around.

The October harassment duty may reshape daily management most, since it asks employers to prevent rather than punish, stretching even to harassment by customers or contractors. For CHROs, the to-do list writes itself.

• Tighten probation and performance processes before January.
• Rewrite harassment policies ahead of October.
• Brief line managers, who carry most of this in the room.

Burnham won office on the politics of care. Turning that into policy now falls to HR, where the firms that move before the autumn will pay far less than those still waiting for the new government to blink.