TRANSPARENCY
Joint and Several Liability (JSL): How TRANSPARENCY Can Help You Audit, Analyse, and Stay One Step Ahead
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Ross Gylanders
June 18, 2026
The Employment Rights Act 2025 represents a cornerstone of the government’s “Plan to Make Work Pay.” For agencies and umbrella companies, it transforms how temporary workers are treated, moving away from “one-sided flexibility” towards a baseline of security from the first day of an assignment.
This shift has also led to the creation of the Fair Work Agency (FWA), designed as the central pillar of the 2025 Act’s enforcement strategy.
Established as a single regulator, combining the authority of HMRC’s Minimum Wage Unit, the Gangmasters and Labour Abuse Authority (GLAA), along with the Employment Agency Standards (EAS) Inspectorate.
These combined powers come with a clear directive. To create a level playing field.
They will do this by aggressively targeting non-compliant operators whilst simultaneously providing a single point of contact for workers and legitimate businesses.
Armed with new civil penalty powers, the FWA can issue Notices of Underpayment -not just for wages but now for holiday pay – and bring proceedings to an Employment Tribunal on behalf of workers.
For us as an umbrella company and you as a recruitment agency, the FWA showcases the government’s shift towards a more “proactive” enforcement; they will not just wait for a complaint to be filed, but will use data-driven strategies to audit supply chains, ensuring that every worker receives their statutory Day One rights and that holiday pay is correctly calculated and paid.
These significant changes, coupled with the Joint and Several Liability legislative changes (also rolled out in April 2026) have reshaped the needs and demands of end-clients, agencies and workforce management.
The 2025 Act represents a significant “re-balancing” of power, largely repealing the restrictive Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023. The trade union position is one of strengthened access and simplified collective action.
While the government originally proposed a pure Day One right, the final Act settled on a compromise to balance worker security with business flexibility. Employees now have protection from unfair dismissal after six months of service (down from two years). However, the "Day One" element persists through a new Statutory Probation Period, where employers must follow a "light-touch" but formal process to dismiss for performance or suitability.
In one of the most significant changes for high-volume recruitment, the three-day waiting period has been scrapped. Workers are now entitled to SSP from the very first day of illness. Additionally, the Lower Earnings Limit has been removed, making SSP accessible to lower-paid and part-time workers, with payments tapered at 80% of earnings for those below the previous threshold.
The 26-week qualifying period for paternity leave and unpaid parental leave has been abolished. Fathers and partners can now take leave immediately upon starting a new role. Note that while the leave is a Day One right, statutory pay (SMP/SPP) still carries service requirements.
The right to time off for bereavement has been expanded beyond just parents, becoming a universal Day One right for all employees grieving a close family member.
The act creates new measures to halt the exploitative use of “one-sided flexibility.” This new stance applies directly to traditional workforces, temporary agency workers, and umbrella company professionals alike.
The controversial practice of dismissing employees and re-engaging them under inferior terms to cut corporate costs is now heavily restricted under UK law. Under the 2025 Act, any dismissal executed because an employee refused to agree to a core contractual change will be deemed automatically unfair.
Following a specified reference period, employers must extend a formal Guaranteed Hours Offer to any worker on a zero-hours or low-hours contract. This offer must accurately reflect the actual hours consistently worked during that reference period.
If a scheduled shift is cancelled, moved, or shortened by an employer at short notice, the worker is legally entitled to financial compensation to cover lost earnings and reasonable costs.
If a scheduled shift is cancelled, moved, or shortened by an employer at short notice, the worker is legally entitled to financial compensation to cover lost earnings and reasonable costs.
The 2025 Act represents a significant “re-balancing” of power, largely repealing the restrictive Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023. The trade union position is one of strengthened access and simplified collective action.
Unions now have a statutory right to enter workplaces (that are not private dwellings) to meet, recruit, and organise. Agencies must ensure that their end-clients are aware of these access rights to avoid friction at the host site.
The "40% threshold" for industrial action in key public services has been removed. Mandates for strike action now last for 12 months (instead of 6), and the notice period for industrial action has been standardised to 10 days.
Much like the "Written Statement of Particulars," employers are now legally required to inform all new workers of their right to join a union as part of their onboarding documentation.
New protections prevent employers from subjecting workers to any "detriment" (such as reducing hours or denying shifts) for participating in protected industrial action.
The 2025 Act means the “Cost of Hire” may change due to higher compliance and SSP obligations. To help you navigate this as you enter conversations with end-clients, you must consider these 3 basic principles:
Ensure your Terms of Business allow for the pass-through of increased statutory costs (e.g., SSP and pension changes).
Partner only with umbrella companies that have already integrated these "Day-One" protections into their employment contracts.
Ensure your dispute resolution and dismissal processes for temporary workers are aligned with the new codes of conduct, as the threshold for "unfair dismissal" is now much lower.
Got questions? We are here to help.
ere are a few of our most frequently asked questions.
The Act removes the previous three-day waiting period, making Statutory Sick Pay (SSP) a day-one entitlement from the first day of an employee’s illness. Additionally, the Lower Earnings Limit (LEL) has been abolished, extending SSP eligibility to low-income and part-time temporary workers who previously did not earn enough to qualify.
The Act significantly reduces the qualifying service period for ordinary unfair dismissal claims from two years down to just six months (scheduled to take effect from 1 January 2027). Furthermore, the statutory cap on unfair dismissal compensatory awards has been completely removed, substantially increasing the financial risk profile for mismanaged employee terminations.
Workers on zero-hours or low-hours contracts gain a new right to a guaranteed hours contract if their actual working patterns show regular hours over a specific reference period. The Act also mandates that employers provide reasonable notice of shifts and financial compensation if a scheduled shift is cancelled or cut short at short notice.
The Employment Rights Act 2025 makes dismissing an employee for refusing to agree to worse contractual terms (such as variations to pay, hours, or holiday) automatically unfair. Employers can only rely on “fire and rehire” or “fire and replace” tactics if they can conclusively prove severe, immediate financial hardship that threatens the business as a going concern.
