New UK employment rights reforms coming into force in April 2026 are prompting mixed reactions from the retail sector, with industry leaders warning that implementation details will shape their impact on jobs, flexibility and business costs.
The British Retail Consortium (BRC) said it supports stronger worker protections under the Employment Rights Act, but raised concerns about specific measures, including trade union reforms and guaranteed hours proposals.
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The legislation introduces a wide range of changes, including day-one rights to sick pay and parental leave, alongside reforms to trade union access and future plans for guaranteed working hours.
Retail backs worker protections but flags risks
Retailers have broadly welcomed measures aimed at improving employment standards. The BRC said “many of these changes… will make a meaningful difference to people’s lives,” pointing in particular to reforms on parental and bereavement leave.
The sector employs millions of workers across the UK and is heavily reliant on part-time and flexible roles. Around 55% of retail jobs are part-time, significantly higher than the national average, reflecting demand from students, parents and those balancing other commitments.
However, the BRC stressed that reforms must be applied in a way that maintains this flexibility. It said employers are “committed to offering fair, secure and flexible jobs”, highlighting the need to balance worker protections with operational realities.
Concerns over trade union and guaranteed hours changes
The retail body identified specific risks linked to changes in trade union rules and the planned expansion of guaranteed hours for workers on low or variable contracts.
It warned that removing trade union recognition thresholds could “undermine that balance” between workforce representation and employer operations.
Proposals on guaranteed hours are also under scrutiny. These reforms aim to provide more predictable income for workers, particularly those on zero-hours contracts. Yet retailers argue that poorly designed rules could limit the availability of flexible roles.
“Implementation… must be carefully considered so they work in practice for both employers and employees,” the BRC said.
Industry analysis suggests more than half of retail roles could be affected by guaranteed hours policies, raising concerns about reduced hiring flexibility.
Rising costs and pressure on employment
The Employment Rights Act reforms come at a time of increasing cost pressure for UK retailers. Higher wages, tax changes and wider economic uncertainty are already affecting hiring decisions and pricing strategies.
The BRC said businesses are facing “significant cost pressures”, citing rising employment costs and geopolitical factors impacting supply chains and prices.
Recent surveys show many retailers are reviewing staffing levels, reducing hours or slowing recruitment in response to higher labour costs and regulatory changes.
The organisation warned that getting the policy balance wrong could have wider labour market effects. “There is a real risk of reducing job opportunities and limiting the flexible roles that millions of people rely on,” it said.
Outlook for UK employment rights reforms
The Employment Rights Act represents one of the most significant updates to UK labour law in recent years, with further measures due through 2026 and 2027, including changes to unfair dismissal rules and flexible working rights.
For the retail sector, the focus remains on how these reforms are implemented in practice. Employers are calling for clarity on key details, such as thresholds for guaranteed hours and timelines for assessing working patterns.
The debate reflects a wider tension between improving job security and maintaining labour market flexibility. As the reforms take effect, their impact on hiring, job quality and business costs will be closely monitored across the UK economy.
