Football’s stake: Employment law reform and ERA levels the playing

The Employment Rights Act 2025 (ERA 2025), representing the most significant overhaul of English employment law in a generation, is being implemented in stages across 2026 and 2027.

It is set to be a game changer for players and other club staff. The updated legislation shifts the balance of power firmly towards employees, making it harder for clubs to sidestep their obligations.

Key changes include a more robust unfair dismissal regime, the removal of the compensation cap, an extended period for bringing claims to the Employment Tribunal, a strengthened duty to prevent third-party harassment, and a ban on non-disclosure agreements (NDAs).

Collectively, these reforms will require clubs to operate with greater transparency and accountability, limiting reliance on procedural loopholes, short limitation periods, and the silencing effect of NDAs.

Unfair dismissal

Currently, employees must have at least two years’ service to bring a claim of unfair dismissal in the Employment Tribunal. Such a claim may arise where an employee challenges whether there was a fair reason for dismissal and/or whether the employer followed a fair process. Compensation for a successful claim is currently capped at the lower of 52 weeks’ pay or £118,223.

What’s changing?

Shorter qualifying period

From 1 January 2027, employees will be able to bring an unfair dismissal claim after only six months’ service. This right will apply retrospectively, meaning individuals employed within the six months prior to that date will also benefit.

This is particularly significant for managers and coaches, whose tenures are often shorter than the current two-year qualifying period. Clubs will therefore need to factor in the increased risk associated with dismissing coaching and playing staff when making management decisions.

Removal of the compensation cap

Alongside the reduced qualifying period, the ERA 2025 will abolish the cap on compensatory awards for unfair dismissal. This presents a material risk for football clubs, given the high salaries commanded by certain players and coaching staff.

In practice, this means that an unfair dismissal award could, in some circumstances, reach into the millions, rather than being limited to 52 weeks’ pay or £118,223.

Extended limitation period

The time limit for bringing claims to the Employment Tribunal will increase from three months less a day to six months from October 2026.

In reality, as players must first go through ACAS Early Conciliation before issuing a claim, which can add several months to the process, the effective lifespan of a claim could extend to around 10 months.

While this helpfully provides additional flexibility for players who may be negotiating contracts or seeking contracts with a new club, it introduces a longer period of uncertainty for clubs, and presents challenges both financially and operationally, which must be reflected in their strategic planning.

Duty to prevent third-party sexual harassment

As it stands, Clubs are only liable for third-party harassment if certain conditions are met, including (a) the employee/worker was being harassed by a third party in the course of their employment, (b) the club knew of at least two previous incidents of third party harassment of that employee/worker (or another employee/worker) before the incident giving rise to the claim, and (3) the club failed to take reasonable steps to prevent further harassment.

From October 2026, clubs will be liable for harassment of players and staff by third parties (such as guests or fans) unless they can demonstrate that they have taken all reasonable steps to prevent it. This duty extends to all forms of harassment, including sexual harassment.

Under the current position, clubs are only liable for third-party harassment where specific conditions are met, including (a) the employee being harassed by a third party in the course of their employment, (b) the club had knowledge of at least two previous incidents of third party harassment of that employee before the incident giving rise to the claim, and (c) the club failed to take reasonable steps to prevent further harassment.

Going forward, the emphasis shifts to prevention rather than reaction. Clubs will be required to take proactive steps to anticipate and mitigate the risk of third-party harassment.

Failure to do so could expose clubs, within an industry that has traditionally handled such matters through private arbitration, risks being exposed in public Employment Tribunal proceedings and significant financial and reputational risk.

In practice, for many professional clubs, meeting this duty will be challenging, particularly for clubs hosting large crowds where factors such as crowd behaviour and alcohol consumption may increase the risk of incidents.

Drawing on the combined expertise of HCR Law’s Employment, HR and Immigration team and our dedicated Sports sector, we are seeing first-hand how these reforms will reshape decision-making for clubs, as they adapt to the changing landscape.