The Employment Rights Act represents one of the most significant shifts in UK employment law for many years. While much of the focus has been on employee protection and fairness, the practical implications for management consulting firms are substantial. The Act introduces new risks, new responsibilities, and new expectations around process and culture.
This article is not a legal manual. Rather, it is intended to prompt discussion and action among consulting firms that want to continue hiring confidently while staying ahead of regulatory and reputational risk.
The key points are:
- “We couldn’t have done any more”
- Demonstrate pro-active steps and be on the front foot
- Every decision (or non-decision) should be through the lens of a forthcoming tribunal hearing. Even if you’ve never had one.
Why this matters to Management Consulting firms
Management consulting firms operate in a highly competitive talent market. The ability to hire quickly, respond to client demand and remain agile has always been a commercial advantage. However, the new framework places greater emphasis on predictability, fairness, and robust documentation.
This does not necessarily reduce flexibility, but it does mean that flexibility must now be managed more transparently and thoughtfully. Firms that treat compliance as a strategic capability rather than an administrative task are likely to gain a competitive advantage.
Key points to consider when hiring
1. Day-one rights fundamentally change the risk profile
From 6 April 2026, several employment rights become available from the first day of employment. These include statutory sick pay, paternity leave and unpaid parental leave. This is a significant shift in mindset.
Historically, many organisations assumed a “low-risk” early period for new hires. That assumption is no longer valid. New employees will have greater protection and entitlement from the outset.
For consulting firms, where new hires are often deployed quickly onto client engagements, this requires more robust onboarding and workforce planning. It also means that absence management, wellbeing and support should be considered early, not after probation.
2. Increased focus on culture and conduct
The Act strengthens expectations around harassment prevention, including liability for behaviour by clients or third parties. In consulting environments, this is particularly important. Consultants frequently work on client sites, and firms may previously have assumed that responsibility sat primarily with the client organisation.
Going forward, employers must take all reasonable steps to prevent harassment, including from clients. This raises questions such as:
- How do you manage difficult client behaviour?
- Are consultants trained to report issues?
- Do engagement leaders know how to respond quickly?
A strong culture of reporting and early intervention will be critical.
3. Shorter qualifying period for unfair dismissal
The reduction of the qualifying period for unfair dismissal from two years to six months significantly changes hiring risk. Employers must expect scrutiny of their processes much earlier.
In addition, the removal of the compensation cap increases the financial stakes. For senior hires in consulting, this could be material.
This means probation periods remain important but are no longer a shield against poor process. Decisions must be documented, reasonable and evidence-based.
4. Increased transparency and predictability
New rights around predictable working patterns and guaranteed hours reflect a broader shift towards employee voice. While consulting firms may not rely heavily on zero-hours contracts, they often use contractors, associates or project-based staff.
This raises important questions:
- Do contractual arrangements reflect reality?
- Are working patterns consistent with what has been agreed?
- Are expectations around availability and workload clear?
Mismatch between practice and contract will become a greater risk.
5. Consultation and engagement
Restrictions on “fire and rehire” and strengthened collective redundancy rules reinforce the importance of consultation. Firms facing market downturns must engage meaningfully with employees before implementing contractual changes.
This will require earlier workforce planning and more transparent communication with staff.
What Consulting Firms should be doing
Review employment contracts
Contracts must be aligned with current practice. This includes:
- Flexible working arrangements
- Client-site expectations
- Predictable working patterns
- Probation and performance management frameworks
Clarity and consistency will reduce future disputes.
Strengthen policies and training
Harassment, whistleblowing and grievance procedures should be reviewed. Managers must understand their responsibilities and know how to respond to concerns.
Manager capability is becoming a frontline compliance issue. Firms should not assume that experienced consultants automatically have people management skills.
Improve documentation and process
The shift in unfair dismissal law makes documentation critical. Firms should ensure that:
- Performance concerns are raised early
- Conversations are documented
- Support and feedback are structured
Even in fast-moving consulting environments, process discipline will be essential.
Align workforce strategy with regulation
The Act signals a broader trend towards fairness, predictability and employee voice. This should be reflected in:
- Workforce planning
- Contractor and associate models
- Project staffing
- Internal mobility and career development
Firms that integrate compliance into their people strategy will be better positioned to attract and retain talent.
Critical timescales
Understanding the phased implementation is key to prioritisation.
6 April 2026
The first major changes come into force, including day-one rights and expanded protections around redundancy consultation. Organisations should ensure contracts, onboarding and absence processes are updated before this point.
6 April 2026 onwards
Voluntary gender pay gap and menopause action plans are introduced, signalling future mandatory requirements. Forward-thinking firms may wish to begin building capability early.
October 2026 (or later in the year)
New harassment duties and tribunal time limits are expected. This is a critical deadline for policy and training review.
1 January 2027 and beyond
The reduction in unfair dismissal qualifying periods, changes to compensation, and fire-and-rehire restrictions take effect. Further consultation on zero-hours contracts, flexible working and redundancy rules will shape the next phase.
This staged approach gives firms time, but it also requires a structured plan rather than a reactive response.
Scenario One: The “New Starter”
The first scenario illustrates how several changes interact in practice.
A new employee becomes ill shortly after joining. Under the new rules, statutory sick pay applies immediately. This removes a previous distinction between established and new staff.
The employee later experiences inappropriate behaviour from a client. The employer initially dismisses the concern, prioritising the commercial relationship. Under the strengthened duty to prevent harassment and increased liability for third-party behaviour, this approach exposes the firm to significant risk.
Finally, the employee is dismissed after several months due to declining performance linked to stress. With the reduced qualifying period for unfair dismissal, the individual may now bring a claim.
The key lesson is that early employment no longer carries low legal risk. Culture, wellbeing and process must be embedded from day one. Firms should review contracts and policies immediately and ensure they meet the higher prevention standards ahead of the October deadline.
Scenario Two: Workforce Flexibility
The second scenario focuses on a fast-growing consultancy relying heavily on casual and short-term staff. Several risks emerge.
First, a worker on a casual contract requests predictable hours after working regular shifts for an extended period. The firm must assess the reality of the working pattern and provide a reasoned response. A refusal based on convenience rather than genuine operational need may be unlawful.
Second, an employee raising concerns about workload is dismissed without a structured process. The new framework increases exposure to unfair dismissal claims and highlights the need for early documentation and separation of wellbeing concerns from performance issues.
Third, the organisation seeks to impose contractual changes without meaningful consultation. The restrictions on fire and rehire increase both legal and reputational risk.
The broader lesson is that contracts must reflect reality. Manager capability, transparent communication and proactive engagement become central to risk management. Employee voice and predictability are no longer optional.
Final Thoughts
The Employment Rights Act is not simply a legal update. It represents a shift in expectations around leadership, culture and workforce strategy.
For consulting firms, the challenge is to maintain agility while demonstrating fairness and accountability. Those that respond early, invest in management capability and align their people strategy with these changes are likely to strengthen both their employer brand and their ability to attract high-quality talent.
The key question is not whether the Act creates constraints. It is whether firms use this opportunity to build stronger, more resilient organisations.
For advice please email Emma Peacock, Partner at Sherrards: [email protected] mentioning this guide.
The author is indebted to Claire Williams MD at recruiters Angela Mortimer for arranging the workshop on the above. [email protected]
