When the Employment Rights Bill first appeared in 2024, it was viewed as a major but still unrealised reform. At the time, commentators were trying to work out what its proposals might mean for employers. Now that the Bill has passed into law and become the Employment Rights Act 2025, its implications are no longer theoretical.
Some of the early changes have already taken effect. Key industrial action provisions were updated in February 2026, and several day one rights are now available for employees. Looking ahead to April 2026, further changes begin, including the expansion of family leave rights, sick pay from the first day of illness and an increase in the penalties for employers who fall short during collective redundancies.
Although these reforms differ slightly from the assumptions made in 2024, the direction of travel is clear. The Act increases the obligations attached to permanent employment and reduces the room to manoeuvre for organisations that rely on flexible staffing. The article published in 2024 anticipated that sectors such as IT would respond by increasing their use of contractors. That prediction now appears well founded. The Act amplifies the original concerns by making several entitlements available sooner and by raising the stakes for employers who misjudge a recruitment decision. Contractors, by contrast, remain outside many of these expanded requirements and continue to offer a cleaner, more flexible way to bring in capability when it is needed.
For organisations delivering digital and transformation programmes, this matters in practical terms. Programmes often require specialist skills for defined periods. They also depend on the ability to strengthen or streamline teams at short notice. When permanent employment becomes more regulated and more tightly bound to immediate rights, it becomes harder to adjust the size and shape of internal teams without facing delay, cost or compliance risk. Contractors allow organisations to access high calibre expertise without creating long term commitments or triggering the wider obligations that now accompany permanent roles.
This shift is not only about risk management. It is about maintaining momentum. Many of the Act's new provisions, such as the enhanced rules taking effect in April 2026, will require organisations to revisit policies, rework internal processes and strengthen their HR frameworks. Those changes take time to implement. In the meantime, project delivery cannot slow down. Contractor talent gives leaders the ability to continue delivering while internal systems catch up with the new requirements.
The introduction of the Employment Rights Act marks a structural change in how organisations will think about staffing. The conversations that began in 2024 about the rising importance of contractors are now becoming decisions. More leaders are reassessing which roles genuinely require permanence and which are better served by targeted, project-based expertise.
This is no longer a question of preference. It is a question of operational resilience.
Malikshaw is supporting our clients through this transition. Our interim and contractor networks give organisations immediate access to experienced professionals who can stabilise, strengthen or accelerate delivery without adding the commitments that permanent employment now entails. For leaders who want to remain confident in their programme outcomes while absorbing the changes introduced by the Act, this support is becoming essential.
If your organisation is reviewing its workforce strategy in light of the Employment Rights Act, Malikshaw can help you design a contractor model that protects delivery, reduces exposure and gives you access to the skills that matter most.
