Draft regulations signal October rollout of limited ET time limit extensions
The government published draft regulations that will bring into force, on 1 October, a limited roll out of the extension of ET time limits from three months to six months. The government previously stated that most ET time limits will increase “no earlier” than October 2026. The draft legislation now provides for a 1 October extension of the following time limits.
• Contractual claims - regulations will extend time limits for contractual claims brought before an ET in England and Wales, including claims for damages for breach of a contract of employment or for sums due under that contract. The amendments will apply only where the effective date of termination falls on or after 1 October 2026. (We anticipate corresponding regulations will follow soon for Scotland.)
• Statutory claims - regulations will extend ET time limits for a range of statutory claims across England, Wales and Scotland namely:
• less favourable treatment of part time workers;
• less favourable treatment of fixed term employees;
• breaches of the Information and Consultation of Employees Regulations;
• detriment connected with trade union blacklists;
• discrimination in NHS recruitment linked to whistleblowing allegations; and
• unlawful treatment relating to prohibited exclusivity clauses in zero hours and low hours contracts.
The regulations will apply these changes only where the relevant act or failure to act occurs on or after 1 October. Where a complaint relates to a series of acts or failures to act, the regulations will apply the extended time limits only if the final act or failure occurs on or after that date. Although the government has not indicated that it will introduce wider extensions to ET time limits on 1 October, the limited and piecemeal nature of this confirmed extension strongly suggests that a broader October roll out is likely.
Trade bodies warn ERA guaranteed hours protections could damage the labour market
Four UK trade bodies have written jointly to the government to warn that “guaranteed hours” reforms under the ERA risk damaging jobs, reducing flexibility and undermining labour market resilience if the government implements them without business engagement. From 2027, the ERA will change how employers use zero and low hours contracts (with the government yet to confirm the definition of “low hours”) by introducing new rights to:
• receive reasonable notice of shift changes;
• receive payment for shifts that employers cancel, move or curtail at short notice; and
• be offered guaranteed hours.
In a letter dated 24 April to the Secretary of State for Business and Trade, the British Retail Consortium, Food and Drink Federation, Recruitment and Employment Confederation and UK Hospitality describe the proposals as a “substantial threat to good jobs”. The trade bodies argue that, in a period of weakened demand, poorly designed guaranteed hours measures could become a tipping point by prompting employers to reduce hiring, limit hours or withdraw flexible roles altogether. They add that employers may also move towards less secure or more casual engagement models. The trade bodies caution that these outcomes could create a “double whammy” of rising unemployment and fewer young people entering the labour market. The organisations warn that the measures risk stripping away flexibility that support labour market resilience. The letter calls on the government to make targeted changes, including setting a longer reference period of six to twelve months to assess regular hours, setting the low hours threshold at eight hours, and recognising the distinct regulatory framework that already governs agency workers. The organisations also urge the government to engage immediately with business to refine the proposals before implementation. For employers, the intervention highlights ongoing uncertainty about how employers will need to apply guaranteed hours obligations in practice and reinforces the importance of monitoring developments closely, particularly for organisations that rely on flexible, seasonal or agency workforces. The government will consult on the ERA’s zero and low hours working measures in due course.
Phase one reforms to Senior Managers & Certification Regime
The government, the Financial Conduct Authority and the Prudential Regulation Authority have confirmed their intention to reform the Senior Managers and Certification Regime through a multi stage package of reforms. They signal a shift towards a more proportionate and flexible accountability framework while preserving core standards. In response to a consultation that closed in October last year, the Treasury acknowledges that, after a decade of operation, elements of the SM&CR impose administrative burdens without delivering equivalent governance or conduct benefits. The government therefore intends to streamline the regime to support growth and competitiveness while maintaining strong accountability. The government plans to:
• remove the Certification Regime from legislation, including annual recertification, and allow regulators to set a more flexible and proportionate framework in their rulebooks;
• reduce pre approval requirements for senior managers by allowing regulators to permit notification based appointments in defined circumstances;
• simplify Statements of Responsibilities by removing prescriptive statutory rules and leaving the detail to regulators;
• streamline the Conduct Rules by removing statutory breach notification and training requirements while retaining regulator set standards; and
• increase regulatory flexibility over senior manager approvals, including time limited or conditional approvals that do not trigger statutory notice requirements.
Alongside these changes, the FCA and PRA announced the first phase of rule changes to reduce unnecessary regulatory burdens. These include changes that took effect on 24 April, such as updates to criminal record checks and the process firms use when recertifying individuals as Fit and Proper. The regulators will introduce further changes from 10 July, including reforms that remove overlapping multiple certifications within the Certification Regime, which account for approximately 15% of all roles. The FCA also expects to consult on a second phase of reforms later this year. For regulated firms, these developments signal a clear policy direction towards simplification while reinforcing the need to monitor further legislative and regulatory changes as reforms progress through 2026. Anne Sammon, Employment & Incentives Partner, commented, “Given the nature of the changes to the rules around regulatory references, firms may wish to review their current policies and procedures to ensure that they remain compliant – both in terms of the speed with which regulatory references will need to be issued and due to the amendments to the approach to responding to fitness and propriety questions, in particular”.
Employment & Reward UK promotions
We are delighted to announce the promotions of several of our colleagues. Stephanie Paton, Richard Allen and Francis Keepfer are promoted to Managing Senior Associate, and Gemma Herbertson to Senior Practice Development Lawyer. Please join us in congratulating them on this fantastic achievement and wishing them continued success!
