Your Guide to The Employment Rights Act 2025

Next month, more elements of the Employment Rights Act 2025 come into effect. It’s perhaps the biggest change to employment law we’ve seen in years and reaches into several different areas of how employers manage both their employees and their business. Needless to say, HR consultants like me have been busy! Now is the time for clear, up-to-date advice and practical support as employers get to grips with the new employment landscape. Not to mention putting processes in place to stop them making a mistake that could cost time, money, reputation and team morale. Today, I wanted to give you a quick rundown of the key changes coming, and what they mean for employers like you.

Please note however, that the Employment Rights Act 2025 covers many things. To keep this blog a reasonable length, I’ve decided to talk about the changes that are most relevant to the kinds of businesses I work with – SMEs with teams who want the best for their employees. If I haven’t covered an area of the Act you’re worried about, do give me a call and I’ll be happy to talk it through.

What is The Employment Rights Act 2025?

The Employment Rights Act 2025, which became law on 18 December 2025, introduces major reforms to UK employment law, with more changes phasing in during 2026 and 2027. 

Unsurprisingly, the Act covers a pretty broad range of reforms. From dismissal rights, parental and bereavement leave and zero hours contracts to flexible working, collective consultative rights, enforcement by a new body and more, the Act looks at almost every element of employment. It’s a lot to take in, but the key changes are staged which hopefully will reduce the overwhelm on employers.

The Key Changes

As a very quick overview, here are the major changes from the Act that you’ll need to be aware of if you employ people:

• Unfair dismissal: The current two-year qualifying period for claims of unfair dismissal is being reduced down to six months which will bring a whole new level of importance to good recruitment and managing onboarding and probationary periods.

  
  

• Zero-hour contracts: This is all yet to be finalised however it is likely that a number of new requirements will be implemented. For example, making an offer of guaranteed hours after a qualifying period, giving reasonable notice of cancellation or movement or shifts and giving employees the option to ‘opt out’ of further offers of guaranteed hours.

  
  

• Flexible working: As is currently the case, employers can only refuse requests for flexible working on the basis of one of eight fair reasons for refusal.  Moving forwards, if an employer wants to refuse a request for flexible working, they will now need to meet a test of ‘reasonableness’, this means that they must ‘prove’ the reason for the refusal and justify why it was reasonable to do so.

  
  

• Day one rights: Both Paternity leave and Parental Leave are becoming day one rights for eligible employees.

  
  

• Statutory Sick Pay: this is to be payable from day one of absence rather than from day 4.  Also the lower earnings threshold is to be removed.

  
  

• Stronger enforcement: A new ‘Fair Work Agency’ enforcement body is being created, which is designed to act as a single, unified enforcement body for workers' rights. It will consolidate the enforcement of the national minimum wage, statutory sick pay, holiday pay, and agency worker rules, with the power to penalise non-compliant employers. They will also have the power to inspect documents and computers, request individuals attend interviews and issue penalties. 

What’s Happening When?

Whilst the government does like to keep us on our toes with dates, we do now have a proposed timeline and roadmap for implementing these changes. While some of these might shift around, here’s an idea of what it should look like.

April 2026

The first wave of changes is due just next month! April 2026 will bring in:

Collective redundancy protective award: Doubling the maximum period of the protective award, taking it from 90 days to 180 days. So, if an employer fails to consult properly in a collective redundancy, the maximum penalty rises significantly.

Day 1 paternity leave: The current laws require 26 weeks of service before an employee can claim paternity leave. The Act will remove this qualifying period so that employees can take paternity leave from the first day of their employment.

Day 1 unpaid parental leave: Similarly to paternity leave, employees will have the right to take unpaid parental leave from day 1, rather than waiting the current one-year qualifying period.

Whistleblowing protections: Existing rules will be expanded so that disclosures around sexual harassment and other broader wrongdoing will quality for whistleblower protections. This means more risks for employers if they dismiss whistleblowers in retaliation.

Fair Work Agency established: A new regulatory body will be created to oversee the enforcement of multiple employment rights (like holiday pay, SSP and so on), as well as provide a central focus for compliance and oversight.

Statutory sick pay: Removal of the lower earnings threshold (currently £125) and the three-day waiting period. With this more workers (including low earners) will be eligible for SSP, and payments will start from day 1 of sickness rather than day 4.

October 2026

6 months later, another set of changes is due to come into effect.

Tightening tipping laws: Stricter obligations around how tips and service charges are handled, including consultation and fair distribution, to prevent unfair deductions or misuse.

Duty to inform workers of their right to join a trade union: Certain employers will be required to proactively inform all employees of their union membership rights, which should strengthen union access and worker choice.  This part of the Act also gives strengthened workplace access rights for union officials, and enhanced protection against detrimental treatment for taking industrial action. 

All reasonable steps to prevent Sexual Harassment in the workplace: Employers will be required to take ALL reasonable steps to prevent the sexual harassment of their employees. By adding in ‘all’, the legal standard rises from just reasonable steps to ALL reasonable steps, which means employers need to be even more proactive and diligent in preventing harassment.

All reasonable steps to prevent third party harassment in the course of employment: Not only do employers have more responsibility to prevent harassment by other employees, but they will now have an obligation to prevent the harassment of their employees by third parties. Third parties can include contractors, customers and visitors.

Employment tribunal time limits: The time limit for bringing most employment tribunal claims will be extended from 3 months to 6 months, giving workers more time to bring a claim and requiring employers to keep records for longer.

2027

The final stretch is in 2027, with some more big changes.

Fire and rehire: Restrictions or even a complete ban on the use of ‘fore and re-hire’ tactics (unless there is no other viable option and a company is in grave financial difficulties). This means employers will need hugely stronger justifications and procedures in place if they want to use this practice.

Menopause action plans: Any company with over 250 employees will be required to develop and publish action plans to support any employees experiencing the menopause. This one’s significant, since it recognises menopause as a workplace equality and health issue.

Enhanced pregnancy and maternity rights: The Act will strengthen protections against dismissal for pregnant workers and those returning from maternity leave.

Collective consultation threshold: The threshold number of employees that trigger a collective consultation requirement in redundancy situations will be examined and likely changed. This is a big one, as it means there will be more situations where consultation is mandatory.

Introduction of bereavement leave: There will be a new statutory entitlement to unpaid bereavement leave, giving employees more protections and time off in serious family circumstances.

Ending exploitative zero-hour contracts: Reform measures will be brought in to eliminate ‘exploitative’ practices, meaning that workers who regularly work receive money, security and more predictable hours.

Unfair dismissal: From January 2027 there will be a reduction to the current 2 year timeline for bringing a claim of unfair dismissal down to a period of 6 months.  A word of caution, any new employees who are employed from July 2026 and who is still employed come January 2027, will be covered by this change.   It also means that employers will need far more robust probation and dismissal processes in place.

Flexible Working: There will be an amendment to flexible working law in 2027. If an employer rejects a flexible working request because of a genuine business reason, they will have to state the reason from the current list of 8 and justify why they believe their refusal is reasonable.

What This Means for Small Business Owners

Mainly, quite a lot of reviewing documentation, policies and procedures! Also, an awful lot of training for both managers and staff.  All employment contracts will need reviewing, especially if you use zero hours or variable hours staff. Here you’re looking to see if you offer guaranteed hours, and what the process is for changes. Next, look at your flexible working policy and whether you’re ready to respond to questions with clearer reasons. Then comes your dismissal/termination policies as well as your onboarding and probation reviewing procedures. These will need to be second to none! After all, when the qualifying period for unfair dismissal reduces, your risk exposure will rise.

Keep a good eye on the implementation timeline, you do have time to prepare but you shouldn’t wait to make changes. You can even think of this as a stepping stone for your business. Being known for “good work” and as a business that’s “good to work for” is now a real differentiator in attracting and retaining employees. If you’re already ahead on compliance, you’re already demonstrating that strength.

Phew, that was a lot to take in! If any of it doesn’t make sense or you’d like to ask questions or talk about how to implement the changes, you can always give me a call. I’m working with all of my clients to get them prepared for the first wave of changes, and I’m always happy to help an employer get it right.