What’s the main difference between outsourced HR and HR consultancy?

Outsourced HR handles everyday people management tasks such as contracts, onboarding, and compliance. HR consultancy focuses on long-term strategy, helping you improve culture, leadership, and business performance.

Do small businesses really need outsourced HR?

Yes, especially when HR admin and employment law start taking too much time. Outsourcing gives you professional support without the cost of a full-time HR hire, so you can focus on running the business while staying compliant.

When is HR consultancy more useful than outsourcing?

Consultancy is best when you already have basic HR processes in place but need to make improvements. For example, if you are restructuring, growing quickly, or trying to improve engagement or retention, a consultant helps you make those strategic changes with confidence.

Can a business use both outsourced HR and HR consultancy together?

Yes. Many organisations outsource routine HR work for efficiency and use consultants to support strategy and leadership. The combination gives you both reliable day-to-day management and long-term direction.

How much does outsourced HR cost?

Costs depend on the size of your business and the level of support you need. Most providers offer flexible packages or retained services, so you can scale up or down as your business changes.

Blog

Tracking law changes: Employment Rights Act

6th January 2026

Last updated: 23rd February 2026 at 09:35am

6 min read

Tracking law changes: Employment Rights Act

Following a series of unforeseen delays, the Bill finally completed its journey through Parliament on 16 December 2025. It received royal Assent on 18 December 2025, formally becoming the Employment rights Act 2025. The government can now proceed with its planned implementation timetable.

The Bill was last debated in the House of Lords on 10 December. Peers agreed to all of the Commons’ final amendments, with one exception: the proposal to remove the cap on compensation for unfair dismissal. Instead, the Lords narrowly supported an amendment to retain the cap in its current form.

As anticipated, the Commons rejected this amendment on 15 December and effectively asked the Lords to reconsider. When the Bill returned to the Lords the following day, they accepted the Commons’ position. However, opposition peers did obtain a commitment from the government to carry out an impact assessment before bringing forward the removal of the cap.

As a result, the government’s implementation timetable remains broadly unchanged.

Most of the previous administration’s trade union legislation will be repealed two months after Royal Assent. The first tranche of employment law reforms is scheduled for April 2026, including an extension of statutory sick pay coverage and the removal of qualifying periods for both paternity leave and unpaid parental leave.

Reforms to unfair dismissal law, specifically reducing the qualifying period to six months and lifting the cap on compensation, are not expected to come into force until 2027.

Further information on the government’s proposed implementation timetable below, though some elements may still be subject to change.

Jump to a section:

Changes as the Employment Rights Bill receives Royal Assent (or soon afterwards)

Area of law under review

What is changing?

Trade unions

Repeal the Strikes (Minimum Service Levels) Act 2023.

Repeal the majority of Trade Union Act 2016.

Protections against dismissal for taking industrial action.

Changes in April 2026

Area of law under review	What is changing?
Sick pay	Right to Statutory Sick Pay (SSP) from day one of sickness, rather than day four, and from the start of employment Removal of the Lower Earnings Limit (LEL) so all eligible employees, regardless of earnings, will have access to SSP Employees to be paid SSP at a rate of 80% of their normal weekly earnings, or the flat rate, whichever is lower.
Collective consultation during redundancy	The maximum period of the collective redundancy protective award will be doubled.
Paternity leave	Paternity leave becomes a day-one right (removing the 26 weeks’ service requirement).
Unpaid parental leave	Unpaid parental leave becomes a day-one right (removing the one year’s service requirement).
Whistleblowing	More explicit definition of whistleblowing protections for workers who make a disclosure relating to workplace sexual harassment, by explicitly stating that such disclosure is a ‘qualifying disclosure’ and can attract rights under whistleblowing legislation.
Fair Work Agency	The establishment of a new enforcement body, the Fair Work Agency (FWA). The aim is to offer a single place where workers and employees can seek help.
Gender pay gap and menopause action plans	Voluntary requirement for employers with 250+ employees to publish action plans on gender pay gaps and menopause.

Changes in August 2026

Area of law under review

What is changing?

Trade unions

Simplifying trade union recognition process.

Electronic and workplace balloting.

Changes in October 2026

Area of law under review	What is changing?
Trade unions	Strengthen trade unions’ rights of access. New rights and protections for trade union reps. Extending protections against detriments for taking industrial action.
Tribunals	Extending the time limit to bring tribunal claims from three months to six months (no earlier than October 2026)
Sexual harassment	Requiring employers to take “all” reasonable steps to prevent sexual harassment. Please note, this is a further change in addition to the changes under the Worker Protection (Amendment of Equality Act 2010) Act 2023 to take “reasonable steps” to prevent sexual harassment that comes into force on 26 October 2024.
Protection from harassment	Introducing a new provision requiring employers to not permit harassment from a third party (such as a client or customer).
Tipping	It will be mandatory for employers, when developing their tipping policies, to consult with workers at the place of business. Employers will also be required to review their tipping policy at least once every three years.

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Changes in 2027

Area of law under review	What is changing?
Trade unions	Extend measures to address the malpractice of blocklisting (or Blacklisting” as it is referred to in the roadmap).
Collective consultation during redundancy	New threshold test whereby employers proposing 20 or more redundancies ‘at one establishment’ OR a certain number/percentage of employees are affected across the employing entity must carry out collective consultation. This new threshold test is yet to be determined and will be set out in regulations.
Sexual harassment	Introduction of a power to enable regulations to specify steps that are to be regarded as “reasonable”, to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
Unfair dismissal	Replace the two-year unfair dismissal qualifying period, with a six-month qualifying period. The compensation cap for unfair dismissal will also be lifted.
Fire and rehire	Severely restrict employers’ ability to use fire and rehire by a change to the law so that, where employees are dismissed for failing to agree to a variation in their terms of employment, those dismissals will be treated as automatically unfair. There will be a very narrow exception if the employer can show evidence of financial difficulties that would mean the business could not carry on as a going concern without varying the contractual terms.
Zero hours and agency workers contracts	Give zero-hours and ‘low-hours’ workers a right to a guaranteed hours contract which reflect the hours they regularly work. This will be based on a set reference period which is likely to be 12 weeks The reference period and definition of a low- hours worker will be set out in future regulations. The bill will also give zero hours and low-hours contract workers a right to reasonable notice of changes to shifts or working hours. Workers will also have a right to compensation that is proportionate to the notice given for any shifts cancelled or curtailed. These rights will also be extended to agency workers.
Flexible working	An employer can only reject a flexible working request where it is reasonable to do so on one (or more) of the existing 8 statutory business grounds.
Gender pay gap and menopause action plans	Mandatory requirement for employers with 250+ employees to publish action plans on gender pay gaps and menopause.
Rights for pregnant workers	Becomes unlawful to dismiss a woman, while pregnant, on maternity leave and within six months of returning to work (with some exceptions).
Bereavement leave	Introduction of a day-one right to at least one week of bereavement leave for employees. Bereavement leave will also be extended so it is available to parents who experience a miscarriage before 24 weeks of pregnancy.

Changes being introduced under the Equality (Race and Disability) Bill – No confirmed date

Area of law under review

What is changing?

Equal pay rights

Introduce the right make equal pay claims to black, Asian and minority ethnic and disabled workers.

Establish an equal pay regulation and enforcement unit with the involvement of trade unions .

Ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay.

Ethnicity pay gap reporting and disability pay gap reporting

Make reporting on ethnicity and disability pay gaps compulsory for employers with at least 250 employees.

Changes being introduced through existing powers and non-legislative routes – No confirmed date

Area of law under review	What is changing?
Paid carers leave	Review of the Carers Leave Act 2023, including the benefits of introducing paid carers leave.

Need help preparing for the 2026–2027 changes?

Our HR experts can help you assess what applies to your business, update your policies and contracts, and create a compliant rollout plan. Learn more about MAD-HR’s Employment Rights Act Readiness Audit.

This article is intended for general information purposes only and does not constitute legal or professional advice. It should not be relied upon as a substitute for advice tailored to your individual circumstances. Please be aware that the law may have changed since the article was published.

Articles may include links to external websites. We have no control over the content, availability or accuracy of these sites, and their inclusion does not imply endorsement or approval of the information or views expressed.

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