The Second Phase of the Employment Rights Act 2025
In April, we wrote about the employment law changes that required firms to update their employee handbooks. Those changes, covering day one rights to statutory sick pay, paternity leave, and parental bereavement leave, were the first phase of the Employment Rights Act 2025. The second phase lands in October, and it is more demanding, requiring your firm to comply immediately.
There are two dates that all employers must be aware of: From 1 October 2026, the time limit for bringing most employment tribunal claims doubles from three months to six. From 30 October 2026, the duty to prevent sexual harassment is upgraded from “reasonable steps” to “all reasonable steps”, a new liability for third-party harassment comes into force, and firms will be required to give all staff a written notice of their right to join a trade union.
These are not optional policy updates or best-practice guidance. They are statutory changes that apply to your firm as an employer from the dates they take effect, and a firm that has not prepared for them will be non-compliant from day one.
The Harassment Duty: From Reasonable Steps to All Reasonable Steps
The current duty, introduced in October 2024 under the Worker Protection (Amendment of Equality Act 2010) Act 2023, requires employers to take reasonable steps to prevent sexual harassment in the workplace. From 30 October 2026, the Employment Rights Act 2025 replaces “reasonable steps” with “all reasonable steps”. The one-word change may seem insignificant, but it sets a materially different standard.
Under the current duty, a tribunal asks whether the employer took reasonable steps. Under the upgraded duty, the question becomes whether there was anything more the employer could reasonably have done and did not do. That is a higher bar, and it changes what counts as compliance. Having an anti-harassment policy and giving staff the right to complain will no longer be enough. Tribunals will look for every practical, preventive measure to have been taken.
In practice, that means firms need to be doing three things they may not be doing now.
First, carrying out a documented sexual harassment risk assessment. This should be reviewed at least annually, and before any event or situation that changes the risk profile, such as a firm social, a conference, or a period of client entertainment. Firms that have not embraced regular risk assessments are exposed.
Second, delivering training that sets out what constitutes unacceptable behaviour and makes the firm’s zero tolerance approach clear. An annual e-learning module and a signed policy acknowledgement will not satisfy the “all reasonable steps” standard. The training needs to be scenario-based, delivered at all levels including management, and refreshed regularly.
Third, enforcing the policy when it is breached. A policy that exists on paper but is not applied when someone crosses the line will not protect the firm at tribunal.
Third-Party Harassment: The Duty Now Extends Beyond Colleagues
The second harassment change arriving on 30 October is the one that catches many businesses off guard, because it requires you to think about people you do not employ.
From that date, employers will be liable for harassment of their employees by third parties unless they have taken all reasonable steps to prevent it. A third party can mean anyone who is not the employer or a fellow employee: clients, suppliers, barristers, expert witnesses, opposing parties, court staff, and anyone your staff come into contact with, in the course of their work.
For law firms, the client relationship is the obvious pressure point. A client who makes sexually inappropriate comments to a member of staff during a meeting or a phone call is now within the scope of the duty. So is a client or guest who behaves inappropriately at a firm event. The firm does not need to have known about previous incidents. A single occasion is enough if the employer failed to take all reasonable steps to prevent it.
Your risk assessment needs to cover this. So does your working environment policy. And your training needs to make clear that sexual harassment does not have to be physical. Being party to a conversation that is sexually charged and inappropriate can amount to misconduct, whether the person responsible is a colleague, a client, or a contractor.
Tribunal Time Limits: Three Months Becomes Six
From 1 October 2026, the time limit for bringing most employment tribunal claims increases from three months to six months. This gives employees a further three months from the date of the act they regard as inappropriate, whether that is unfair dismissal, constructive dismissal, or discrimination, to bring a claim.
The practical consequence for firms is that matters you might previously have regarded as closed could resurface. An employee who left three months ago and appeared to have moved on now has until the six-month mark to file. That extends the window of exposure, and it makes the quality of your documentation, your exit processes, and your record-keeping more important than it was before.
Trade Union Notice
From 30 October 2026, firms will be required to provide a written notice to all staff that they have a right to join a Trade Union. Regulations are expected to set out the content, form, and frequency of the statement, but the obligation itself is confirmed. For most law firms this is a straightforward administrative step, but it needs to be done.
What Has Already Changed and What Is Still Coming
It is worth stepping back and seeing October in context, because it sits in the middle of a programme of reform that stretches across three years.
The April 2026 changes, which we covered in our previous article, ‘Is Your Employee Handbook Still Compliant?’, introduced day one rights to statutory sick pay with no earnings threshold, day one rights to paid paternity leave, and day one rights to unpaid parental bereavement leave. Those are now in force and should already be reflected in your handbook and contracts.
From April 2027, a further round of changes is expected, including:
- The time period by which employees will be able to make a claim for unfair or constructive dismissal will be reduced from 2 years to 6 months.
- Zero-hour contracts will be banned.
- The current cap on damages for unfair dismissal will be removed.
- Refusal of flexible working will be limited to one of eight statutory grounds.
- Large employers (250 staff+) must publish mandatory pay gap data and have a menopause policy.
- Enhanced protection expanding dismissal safeguards for pregnant workers and new mothers.
- Introduction of statutory bereavement leave rights, including provisions for specific pregnancy loss.
Taken together, these represent the largest set of employment law reforms in a generation. Each phase builds on the last, and a firm that falls behind on one set of changes will find the next set harder to absorb.
How RACO Can Help
For firms on our Compliance Essentials service, we will update your working environment policy to reflect the new duties on sexual harassment, including the third-party harassment provisions. We will also update the template sexual misconduct risk assessment, and provide you with a trade union notice that can be issued to staff.
If you have obtained an employee handbook from us and subscribed to our Employee Handbook Drafting and Maintenance service, we will provide a revised handbook incorporating all the changes. No action is needed on your part other than letting us know if you would like to discuss any aspect of the updates.
For firms not currently on these services, the October changes are a good reason to review where you stand.
Training. If your firm has not provided equality, diversity, and sexual misconduct training in 2026, we recommend booking it now. Under the “all reasonable steps” standard, firms that cannot show they have trained their staff will struggle to defend a harassment claim. RACO delivers a course specifically tailored to law firms, covering the full scope of the new duties. Pricing starts at £800 for an online course and £1,200 for an in-person course. There is no limit on the number of delegates, and each course includes a detailed handout, live delivery, and a post-course Q&A session. Contact us to book.
Employee handbooks. If your handbook has not been updated, or if it predates the April 2026 changes, it needs attention before October. Our Employee Handbook Drafting and Maintenance Service provides law firms with a handbook built around employment law and SRA expectations, together with staff contracts and an ongoing update service. Download the full service brochure for detailed information.
HR support. For firms that need broader help with employment matters, policies, and people management, our Human Resources (HR) service provides practical, ongoing support.
Speak to Our Compliance Team
To discuss the October employment law changes, book training, or update your employee handbook, please call us on 0203 985 8550, complete the online enquiry form below, or email us at info@regulationandcomplianceoffice.co.uk
