Football’s Stake in the ERA 2025

The new Employment Rights Act will make sports clubs more transparent and accountable, but unless the right processes are followed, clubs could find themselves facing a range of new onerous claims, including unfair dismissals which could cost millions.

The Employment Rights Act 2025 (ERA 2025), signals the biggest shake up of English employment law in a generation. It’s being implemented in stages through 2026 and 2027 and is a game changer for both players and club staff.

The updated legislation tips the balance of power towards staff, making it harder for clubs to sidestep their obligations. Key changes include a more robust unfair dismissal regime, scrapping the compensation cap, a longer window to bring claims to the Employment Tribunal, a reinforced duty to prevent third party harassment, and an outright ban on non-disclosure agreements (NDAs).

The reformed legislation pushes clubs to be more transparent and accountable, and prevents reliance on procedural loopholes, short limitation periods, and/or 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.

A claim for unfair dismissal arises if an employee wishes to challenge the existence of a fair reason for the termination of their employment or the employer has not followed a fair process to terminate their employment. A successful unfair dismissal claim is currently capped at the lesser of 52 weeks’ pay or £118,223.

What’s changing?

Shorter qualifying period

On 1 January 2027, a club’s employees will be able to make a claim for unfair dismissal after only six months of employment. This will be a retrospective right, therefore anyone employed within six months prior to this date will also benefit from the reformed law on that date.

This is particularly beneficial for managers and coaches whose tenure may often be less than the current requisite two-year length of service to bring an unfair dismissal claim. Clubs will need to factor into their management decision-making the greater risk arising from the dismissal of coaching and playing staff.

No compensation cap

As well as shortening the qualifying period, the new ERA will also abolish the cap on compensatory awards for unfair dismissal. This poses a serious problem for football clubs given how high salaries are for certain players and coaching staff. For example, an unfair dismissal award could in theory end up costing the club millions now, instead of the lesser of 52 weeks’ pay or £118,223.

Longer limitation period

Another change is the lengthening of the limitation period to bring claims. As it stands, for most claims players and club staff have three months less a day to bring a claim to the Employment Tribunal, measured from the date of dismissal or other act complained of.

From October this year, this will increase to six months. Practically, as players must go through ACAS Early Conciliation before lodging a claim, which can add up to an extra four months to the process, the lifespan of a potential claim may be stretched by up to ten months.

This extra time will help players who are busy negotiating contracts or trying to secure a new club but will present challenges for clubs who now need to factor in a longer period of budget and operational uncertainty as part of their operational and strategic planning.

Duty to prevent third party sexual harassment

From October 2026 onwards, clubs will be liable for harassment from third parties (e.g. guests, fans etc.) towards players and club staff unless they have taken all reasonable steps to prevent it from happening. This applies to all types of harassment, including 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.

Moving forward, clubs will be obliged to anticipate and prevent third-party harassment, instead of responding to it. If they fail to do this, an industry which traditionally resolved disputes of this nature through private arbitration, risks being exposed in public Employment Tribunal proceedings and facing significant financial repercussions.

In practice, many professional clubs will find it difficult to uphold and monitor this duty in practice, particularly those that host large numbers of fans and permit alcohol consumption. Meeting the requirements of the Employment Rights Act will take time and planning, but the clubs that face the challenge head on should have a lot less cause for concern.