The Employment Rights Act 2025: what changes for employers

One of the most significant recent overhauls to UK employment law comes in the form of the Employment Rights Act 2025. Employers need to be on top of these reforms, which cover a whole remit from unfair dismissal, redundancy, and statutory sick pay to family leave, sexual harassment, and the rights of trade unions. 

But understanding what the legislation changes is only half the battle. It’s just as important to know when each change takes effect, what the changes actually mean, and how to prepare for them.

While the act received Royal Assent on 18 December 2025, changes are being introduced in phases throughout 2026 and 2027. Some are already law, while others are awaiting start dates or further regulations. 

No, but it does amend and extend existing employment legislation, which includes the 1996 Act, along with other legislation that oversees workplace protections, collective redundancy, and trade unions.

The Employment Rights Act 1996 is still a central part of the UK’s employment law, providing a framework for rights including protection against unfair dismissal, redundancy payments, notice periods, and statutory employment protections. The 2025 Act strengthens this by introducing amendments to this framework on existing rights, while creating new obligations for employers.

The most significant changes are:

• Reducing the qualifying period for ordinary unfair dismissal claims down from two years to six months.
• Removing the statutory cap on compensatory awards for unfair dismissal.
• Doubling the maximum collective redundancy protective award from 90 to 180 days’ pay.
• Strengthening protections against fire and rehire.
• Introducing new rights for low hours and zero hours contracts.
• Extending statutory sick pay eligibility and removing waiting days.
• Making paternity leave and unpaid parental leave day one rights.
• Strengthening sexual harassment prevention duties and introduceing liability for third party harassment.
• Establishing the Fair Work Agency to strengthen employment rights enforcement.
• Extending trade union rights and protections.
• Introducing new bereavement leave, as well as enhanced pregnancy and maternity protections.
• Strengthening flexible working requirements.

Not all of these measures take effect immediately, so let’s look at what’s already happened and what employers need to prepare for.

18 December 2025: The repeal of the Strikes (Minimum Service Levels) Act 2023 was one of the first reforms to take place straightaway.

What employers need to do: Review industrial relations policies and ensure managers understand the changing framework around industrial action and trade union engagement.

18 February 2026: Further trade union reforms include stronger protection against dismissal for taking part in industrial action. The 12-week limit on protection against unfair dismissal for participating in industrial action was removed. Notice requirements for industrial action were reduced from 14 to 10 days, and industrial action mandates were extended from six to 12 months. Other changes simplified ballot and industrial action procedures.

What employers need to do: Assess industrial relations policies, disciplinary procedures, and management training to ensure that employees who exercise their rights to industrial action are treated fairly and lawfully. 

6 April 2026: In order to widen access to sick pay, particularly for lower-paid and part-time workers, statutory sick pay became payable from the first day of sickness rather than the fourth day. Additionally, the lower earnings limit was removed, meaning eligible employees no longer need to earn a minimum amount to qualify.

What employers need to do: Update payroll systems, absence management procedures, and employment policies. Also check that all eligible workers receive the correct entitlement from the first day that they qualify for these changes.

6 April 2026: Paternity leave and ordinary unpaid parental leave became day-one rights, meaning they apply from the first day an employee starts work. It no longer requires any minimum length of service. The restriction that prevented employees from taking paternity leave after shared parental leave was also removed.

What employers need to do: Update family leave policies and ensure managers understand that length of service is no longer a qualifying requirement.

6 April 2026: A huge change for those employers who are dealing with redundancies is the increase in the maximum collective redundancy protective award, doubling from 90 days to 180 days’ pay for those business leaders who fail to comply. This massive increase certainly raises stakes with regards to the financial consequences of failing to consult with your team properly.

What employers need to do: Thoroughly review redundancy procedures, consultation arrangements, and HR documentation, and don’t wait until redundancy decisions have been made before involving employee representatives. For those companies planning a restructure, the increased financial exposure makes early workforce planning and outplacement support more crucial than ever.

6 April 2026: Workers who report sexual harassment can now benefit from whistleblowing protections against detriment and unfair dismissal, as sexual harassment disclosures now qualify under whistleblowing.

What employers need to do: Review whistleblowing policies and reporting procedures, ensuring that the workplace is a safe space for all employees… and especially for those raising concerns. Managers also need to understand how to respond appropriately without dismissing, victimising, or penalising those individuals who speak up. 

7 April 2026: This new department brings together existing employment rights enforcement functions and strengthens compliance, with responsibilities including enforcing areas such as statutory sick pay and holiday pay.

What employers need to do: Check payroll, holiday pay, and employment records. You should be able to demonstrate that you’re adhering to statutory obligations, and not just relying on internal policies.

25 August 2026: Trade union members gained the ability to vote electronically or at their workplace in statutory ballots if the employer and trade union agree.

What employers need to do: Ensure HR and employee relations teams understand these updated ballot arrangements, and are prepared to engage with trade unions.

1 October 2026: The time limit for bringing employment tribunal claims increased from three to six months, granting employees more time to pursue claims and meaning employers need to retain relevant records for a longer period. It’s worth noting that on 9 November 2026, the time limit for breach of employment contract claims in Scottish employment tribunals increased to six months.

What employers need to do: Overhaul arrangements on retaining records, investigation procedures, and legal escalation processes.

30 October 2026: The onus on employers to prevent sexual harassment increased from taking “reasonable steps” to taking “all reasonable steps.” The legal requirements also included the fact that employers are liable for harassment of employees by third parties, such as clients, customers, or suppliers, unless the employer has taken all reasonable steps to prevent this.

What employers need to do: Carry out updated workplace harassment risk assessments, review policies, provide training, and establish clear protocols for dealing with harassment from colleagues and third parties.

30 October 2026: Further trade union reforms took effect, such as strengthened rights of access to workplaces, protections for workers taking industrial action, and additional rights for trade union equality representatives.

What employers need to do: Review trade union recognition arrangements, access policies, and facilities for representatives. Ensure managers understand the distinction between lawful trade union activity and conduct that can be addressed through normal procedures.

The legislation for the Employment Rights Act changes carry on into 2027, so it’s wise to plan ahead.

1 January 2027: One of the most significant reforms is that employees will be able to bring unfair dismissal claims after working continuously for six months, rather than two years. The statutory cap on compensatory awards will also be removed. 

For example, a manager who’s considering dismissing an employee who has been there for nine months will have to consider whether it’s for a fair reason, or whether suitable alternative employment could have been found, and whether a fair process was followed.

For those employers recruiting in sectors where tips are part of the role, they will be obliged to consult workers when creating or reviewing tipping policies, share an anonymised summary of consultation feedback, and review policies at least once every three years. 

March 2027: There will be stronger protections against fire and rehire, making dismissals for failing to agree to certain contractual changes automatically unfair in most cases. An exception will be for businesses experiencing severe financial problems when there is genuinely no alternative. The aim of this is to restrict the ability of the employers to dismiss and then re-engage employees on less favourable terms 

April 2027: A statutory right to unpaid bereavement leave, including for miscarriage, will take effect. Collective redundancy rules will also change, with employers considering the total number of proposed redundancies across the entire organisation, rather than just looking at individual establishments. It means that a business looking at 12 redundancies at one site and 15 at another must consider the combined number when assessing collective consultation obligations.

Other changes will make plans on the gender pay gap and menopause action mandatory for private and voluntary sector employers that employ 250 or more workers.

A summary of further reforms include:

• September 2027: Restrictions that prevent the misuse of non-disclosure agreements in cases involving workplace harassment or discrimination.
• October 2027: Changes to flexible working refusals, which require employers to explain why a refusal is reasonable, along with strengthened pregnancy and maternity dismissal protections.
• December 2027: The regulation of umbrella companies.

This new legislation has implications for organisations undergoing restructuring, offboarding workers following redundancies, or implementing business change. With 113,000 people made redundant in the UK between June and August 2026, following legally compliant redundancy processes and having a considered approach to supporting employees is the way to go.

How an organisation manages redundancies can have a lasting impact on trust, morale, and reputation. Research from Careerminds in the US pinpoints a significant gap in the perception of redundancy communication, with 83% of HR leaders believing that redundancy communications were empathetic, compared to just 64% of employees. 

This is a clear reminder that employers shouldn’t measure the success of a redundancy programme by whether the process was completed on time or met all of the legal requirements. Clear communication, meaningful consultation, and career transition support can make a world of difference to those employees leaving, as well as those who are staying.

For international organisations, it’s important to recognise that employment protections differ between jurisdictions.

With some reforms already in force, and further changes scheduled throughout 2027, employers should treat the Employment Rights Act 2025 as a programme of ongoing organisational preparation.

Practical priorities to consider include:

• Audit existing policies: review policies on redundancy, dismissal, absence, family leave, whistleblowing, harassment, and flexible working.
• Update payroll and HR systems: check SSP, family leave entitlements, and record-keeping arrangements.
• Train managers: ensure that those who are responsible for recruitment, performance management, employee engagement, and dismissals understand the new requirements.
• Review redundancy processes: strengthen consultation, selection, and redeployment procedures, particularly in light of the increased protective award.
• Prepare for shorter unfair dismissal qualifying periods: improve probation management, performance documentation, and early intervention.
• Monitor future commencement dates: keep track of government updates, consultations, and the implementation of regulations, particularly where dates remain subject to change. 

The Employment Rights Act 2025 is more than a legislative update, as it puts the onus on employers to really consider how they recruit, manage, support, and, if necessary, release members of staff. The organisations best prepared for this will be the ones that translate legislative changes into practical policies, consistent management decisions, and a more considered employee experience.

If you’re planning a restructure or reviewing your approach to workforce change, is your current strategy ready for the employment rights changes that have happened and are yet to come?