Employment Rights Act 2025: revised Code of Practice, tipping and umbrella companies consultations

Revised Code of Practice: access and unfair practices during the recognition and derecognition process

The full title is Consultation on (1) the revised Code of Practice on access and unfair practices and (2) unfair practices in electronic ballots.

The consultation paper was published on 4 February 2026 and the consultation period ends on 1 April 2026.

The Government says that a crucial part of its plan to bring employment rights legislation into the 21st century is supporting the right of workers to organise for the purposes of collective bargaining. The current Code of Practice provides practical guidance on how to comply with the existing legal framework around trade union recognition and derecognition. The Act makes several changes to the trade union recognition scheme and unions’ access to workers earlier in the recognition process. Consultation is needed on an updated Code of Practice to reflect the changes to the legal framework being brought in by the Act and this is the first part of the consultation paper.

In the second part, the Government is consulting on potential updates to the law on unfair practices to enable the use of electronic balloting via workplace email addresses for statutory recognition and derecognition ballots. The Government intends to provide for two types of electronic voting. There is “pure” electronic balloting where the voting materials and voting taking place entirely electronically. There is “hybrid electronic balloting where voting materials are distributed by post, but votes can be returned either by post or electronically.

There is a revised Draft Code of Practice: access and unfair practices during the recognition and derecognition process. Once finalised, the Code of Practice will replace the version of the Code of Practice which came into effect on 1 October 2005.

Modernising the agency work regulatory framework

The Government describes the rapid growth of umbrella companies as one of the most significant developments in the temporary labour market. Umbrella companies are payment intermediaries that employ workers, often agency workers, on behalf of recruitment agencies and end hirers. The umbrella companies process payroll but the workers carry out their duties for a third-party client.

There have been long-standing concerns about persistent non-compliance among umbrella companies relating to tax and employment law such as hidden costs for workers, deductions which are not transparent and a lack of clarity about rights.

To tackle these concerns, the Act amends the definition of “employment business” which will be expanded to include the actions commonly undertaken by umbrella companies, specifically the handling of a worker’s pay. The Act will bring umbrella companies within scope of the rules which govern the temporary labour market and they will be regulated by the Fair Work Agency.

The consultation period started on 6 February and ends on 1 May.

In the consultation exercise, the Government is seeking views on how to modernise and streamline the rules which govern the temporary labour market. The aim is “to create a framework that is effective, proportionate, and responsive to the way the modern agency work market operates.” The Government wants to close loopholes, improve enforcement and streamline rules and obligations. Questions are asked around three key issues. These are security, transparency about pay, for example, how the worker will be paid and what type of work they will be doing and finally, choice to ensure that workers cannot be forced to work through, or be paid via, an umbrella company.

The regulation of umbrella companies is expected to be implemented in 2027.

Finally, there is a helpful link to the list of the Government’s open and closed consultations at the end of this article. It is a very useful reminder of where we are with all the consultations and especially useful for employers that may want to respond on an issue particularly relevant to their organisation. We are still waiting for some key consultation papers. These include ending the exploitative use of zero hours contracts and the collective redundancy threshold. Both these measures are to be implemented in 2027.

Useful links

• Government consultations
• Consultation Revised Code of practice on access and unfair practices
• Draft Code of Practice access and unfair practices
• Consultation Strengthening the law on tipping
• Consultation Modernising the agency work regulatory framework