Overview
The Employment Rights Act 2025 (the Act) received Royal Assent in December 2025 and represents the most significant set of changes to UK employment law in a generation.
Although the Act received Royal Assent late last year, the legislative changes are not being implemented all at once. To help employers manage the transition, the reforms will be introduced in phases over the next two years. A number of consultations are currently underway, with others still to come, and the outcomes of these will shape the detailed guidance and final form of several of the changes outlined below.
Changes that have already taken place
Trade Unions
- Legislation introduced by the previous Government requiring minimum service levels in key public sector services during industrial action was repealed.
Changes expected in April 2026
Collective Redundancy
- Protective awards are the penalty that can be awarded to employees by a Tribunal when collective redundancy consultation is not properly carried out. The maximum limit on these awards is doubling from 90 to 180 days’ pay.
Family Leave
- Paternity Leave and unpaid Parental Leave are to become Day 1 rights and will no longer require a minimum period of service.
Sick Pay
- The lower earnings limit for entitlement to Statutory Sick Pay will be removed and the first 3 days of sickness will no longer be “waiting days”. SSP will therefore be payable from the first day of absence and to a larger number of individuals.
Enforcement of Rights
- The Fair Work Agency is to be created on 7 April 2026 and will oversee compliance on key employment rights – including holiday pay, Statutory Sick Pay and minimum wage.
Whistleblowing
- Disclosures regarding to sexual harassment are to be expressly recognised as a specific category of protected disclosure.
Trade Unions
- Trade union changes continue with simplification of the process for union recognition and the removal of turnout thresholds in industrial action ballots. The introduction of electronic and workplace balloting was due to be implemented in April 2026, but this has now been pushed back to August 2026.
Changes expected in October 2026
Sexual Harassment
- Employers are currently under a proactive duty to take reasonable steps to prevent sexual harassment of staff. This duty will be enhanced to “all reasonable steps”. A power will also be introduced that will enable Regulations to specify what steps may be regarded as reasonable in this context.
Third Party Harassment
- Laws will be introduced that could make employers liable for harassment of their staff by third parties.
Tipping
- Strengthening of current rules, including a need for staff consultation where an employer creates or revises a tipping policy.
Tribunal Time Limits
- Time limits for raising Tribunal proceedings will increase from 3 to 6 months. Time limits will still pause for Acas Early Conciliation in the usual way.
Trade Unions
Further changes include:
- A right not to be subject to detriment for taking industrial action;
- A need for employers to inform staff of their right to join a union; and
- Rights to reasonable accommodation and facilities for union officials.
Looking ahead to 2027
Unfair Dismissal
- The qualifying period for unfair dismissal protection is to be lowered from 2 years to 6 months. The upper cap on compensatory awards is to be abolished.
Fire and Re-hire
- The practice of terminating an individual’s employment and immediately offering them re-engagement on alternative terms (as a means of facilitating a contractual change in the absence of agreement) is generally viewed as an option of last resort by employers. Even so, the Government plans to further tighten the rules in this area, effectively meaning that it will only be a valid option in situations where an employer is in significant financial distress. As well as applying to “fire and re-hire”, these rules will also apply to “fire and replace” scenarios where existing staff are dismissed and others are brought in to do the same work on different terms.
Pregnancy and Maternity
- Enhanced protections against dismissal are to be introduced for pregnant workers and new mothers.
Harassment
- The Government will have power to introduce Regulations that set out “reasonable steps” in the context of the prevention of sexual harassment.
Bereavement Leave
- New rights to bereavement leave are to be implemented.
Zero Hours
- Zero and low hours staff will have a right to be offered guaranteed hours after a set reference period. Rules are also to be introduced requiring reasonable notice of shifts, as well as compensation for cancelled shifts.
What should employers consider going forward?
Whilst there is currently a clear framework for the implementation of the 2025 Act’s provisions, not all areas are set in stone. Some of the changes require secondary legislation and there are a number of consultations either in progress or scheduled to take place to inform the finer details of the proposed changes.
In the meantime, employers should familiarise themselves with the detail of confirmed changes and keep a watchful eye on ongoing consultations so that they can take any necessary steps to comply come the relevant implementation date.
Practical steps all employers are advised to take now include:
- Audit your staff handbook/policies and procedures and contracts of employment to see what changes or updates are required; and consider how those changes will be communicated to staff
- Review absence management processes so that managers and payroll understand the new SSP rules.
- Consider how robust your hiring practices are and how probation periods are used ahead of the 2027 changes to unfair dismissal.
- For larger employers, ensure that HR teams fully understand the collective consultation regime so as to avoid the risk of now very high protective awards.
- Audit your Training & Development to ensure it adequately covers the areas it should – including specifically harassment training.
If you have any questions regarding the Employment Rights Act, please get in touch with our team to discuss further.
