What is the Employment Rights Act 2025?
The Employment Rights Act 2025 is the biggest update to UK workplace rules in decades. It shifts the balance of rights by making many benefits available to workers from their first day on the job. For your business, this means you'll need to update your contracts and policies to stay compliant. Most of the new rules won't start until April 2026 or 2027, giving you time to prepare your HR processes.
What are the new rules for unfair dismissal firings?
Employees will have the right not to be unfairly dismissed after six months of employment.
While the government originally suggested this should be a 'day-one' right, the final Act includes this six-month qualifying period, which starts in January 2027.
Crucially, the Act also removes the statutory cap on unfair dismissal compensation. Previously, payouts were limited to a year's pay or a set statutory amount. Now, an unfair dismissal claim could cost your business significantly more, making it vital that you follow a fair and 'light-touch' probation process during those first six months. The exact date for this change is not yet clear.
What are the new parental job protections?
It will be unlawful to dismiss employees throughout pregnancy, maternity, adoption, or shared parental leave, and within six months of their return to work, unless there are exceptional circumstances. This is an extension of the current maternity leave job protections. Further details on what counts as 'exceptional' will be released before these rules take effect in 2027.
How does the Act change fire and rehire?
The Act aims to further restrict fire and rehire practices. From October 2026, it will be automatically unfair to dismiss an employee for refusing to agree to key employment contract changes that affect their:
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pay
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work hour requirements
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pension
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holiday entitlement, or
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anything else defined within future regulations
It will also be automatically unfair if an employee is dismissed because the employer wants to hire someone else on these varied terms or to replace the employee with another person who is not an employee (ie a consultant or agency worker). However, this will likely not be applicable where an employer is responding to financial difficulties.
What are the new collective redundancy rules?
A new threshold test is being established to trigger collective redundancy consultations, in addition to the current threshold. From 2027, a collective redundancy consultation will be triggered if 20 or more employees are being made redundant in a single site or workplace, or where the new threshold of employees being made redundant is met across multiple sites or workplaces.
The penalties for not complying with the collective redundancy requirements will also be doubled as of April 2026, resulting in a maximum protective award of 180 days' pay for each affected employee.
What are the new rules on harassment?
From October 2026, ‘all reasonable steps’ must be taken by employers to prevent sexual harassment in the workplace. This includes protecting staff from third parties, such as customers or contractors. Additionally, from April 2026, sexual harassment will be treated as a 'qualifying disclosure' for whistleblowing.
Non-disclosure agreements (NDAs) or any confidentiality provisions will be void (ie invalid) if they prevent any employees or workers from disclosing any harassment or discrimination, and any response the employer provides in relation to that harassment or discrimination. It is unclear when this will be enforced, but future regulations are expected to provide a clearer date.
How will flexible working change?
From 2027, flexible working will be a right from day one of employment. This means employees will be able to submit a Flexible working request on their first day of work. Employers will only be able to refuse such requests if their refusal is reasonable and falls within one of the eight business grounds. A written explanation must be provided to the employee showing why the refusal is considered reasonable.
What is changing with zero-hour contracts and for zero-hour workers?
While zero-hour contracts are not banned by the Act, their exploitative use is being stopped. If a worker with a Zero-hour contract regularly works more than their minimum hours over a 12-week period, they are entitled to an offer of a new contract with guaranteed hours which reflect their actual work pattern.
Employers will also need to provide workers (including workers with zero-hour contracts or irregular hours) with reasonable notice if they are required to work or where their shift has been cancelled or changed. If a worker’s shift has been cancelled or changed at short notice, the worker will be entitled to a set payment.
These rules are due to start in 2027.
How are family rights changing?
The changes to family rights are designed to make it easier for working parents and prioritise families in the modern working world.
Will paternity leave and unpaid parental leave become day-one rights?
Service length requirements are being removed for unpaid parental leave and paternity leave, making it a day-one right from 1 April 2026. This will mean employees no longer need to wait for the qualifying 26 weeks of employment before being able to take paternity leave, or one year for unpaid parental leave. Fathers and partners will be able to give notice of their intention to take leave from their first day in a new job.
How will paternity leave entitlements change?
From 1 April 2026, employees will be able to take paternity leave and pay, even if they have already taken shared parental leave and pay. Under existing rules, any remaining entitlement to paternity leave and pay is lost if shared parental leave is taken first. This restriction will be removed to provide families with more flexibility in how they share care.
What is the new bereavement leave right?
A new entitlement to one week of bereavement leave from the first day of employment will be introduced. This aims to expand the scope of bereavement leave beyond the current parental bereavement rights, which will remain available. Further regulations will determine which personal relationships will qualify for this new bereavement leave. It isn’t clear whether this leave will be paid or not. This will be introduced in 2027.
How is statutory sick pay (SSP) changing?
From April 2026, statutory sick pay (SSP) will be paid from day one of an eligible employee’s illness rather than day four. The minimum earnings threshold will also be removed, meaning employees will no longer need to earn a minimum amount per week to be eligible for SSP.
What are the new holiday pay record rules?
Employers will be subject to a new obligation to keep records to demonstrate their compliance with statutory holiday entitlements. Records must be kept for six years, and non-compliance will be considered a criminal offence, and the Fair Work Agency (more on this below) will have the power to inspect these documents to ensure workers are receiving the correct pay and leave. It’s not yet clear when this new duty will come into force.
How are gender pay gap and menopause reporting affected?
Employers with more than 250 employees will be required to produce:
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a gender pay gap report and action plan
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a menopause support action plan, to help employees going through menopause
Employers can voluntarily produce these plans from April 2026, but they will become mandatory by 2027.
What are the new Employment Tribunal time limits?
From October 2026, the time limits for bringing claims to the Employment Tribunal will be extended from three to six months. This applies to common claims such as unfair dismissal, harassment, and discrimination. This change is intended to give workers more time to seek advice and gather evidence before starting legal action.
What is the Fair Work Agency?
The Fair Work Agency is a new enforcement body that will be established in April 2026. It will bring together existing regulators to oversee rights such as:
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national minimum wage
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SSP
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holiday pay and compliance
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labour exploitation and modern slavery
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tribunal awards and penalties
The Agency will be granted extensive powers to conduct unannounced inspections, issue civil penalties, and publicly name non-compliant employers. It will also be able to take enforcement action on behalf of workers without them needing to raise a tribunal claim themselves.
How are strike and trade unions affected?
The Employment Rights Act 2025 expands trade union powers and simplifies how they organise. While most changes will be phased in from 2026, the government has already removed certain restrictions on strike action.
What has happened to the Strikes (Minimum Service Levels) Act 2023?
The government has repealed the Strikes (Minimum Service Levels) Act 2023. This means that requirements for minimum service levels that limit the number of workers striking within key sectors have been removed, allowing for more strike action.
How will industrial action be simplified and protected?
From February 2026, dismissing an employee for participating in lawful industrial action will become automatically unfair. This change will remove the current 12-week limit on protection, meaning workers will be protected for the full duration of a strike.
Industrial action will be simplified for trade unions by repealing several sections of the Trade Union Act 2016. These changes will take effect in February 2026 and will include:
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reducing the amount of information trade unions need to provide employers about industrial action and ballot (ie a vote for industrial action) notices
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only requiring a simple majority (50%) to vote for industrial action
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increasing industrial action mandates (ie the trade union’s authorisation for industrial action after a successful ballot) from six to 12 months
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reducing the notice period for industrial action from 14 days to 10 days
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the removal of requirements for picket supervisors
Additionally, from April 2026, trade union members will be permitted to vote electronically in statutory ballots. This digital voting is intended to modernise the process alongside traditional postal ballots.
What are the new duties for employers regarding trade unions?
From April 2026, the process for trade unions to gain recognition in a workplace will be simplified. From October 2026, additional duties will be placed on employers, including:
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a duty to explicitly inform all new employees and workers of their right to join a trade union when they receive their written statement of employment particulars
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a new statutory right for trade unions to access workplaces (both physically and digitally) for recruitment and organising purposes
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a requirement to reasonably accommodate trade union representatives, including providing paid time off for 'union equality representatives'
New laws will also be introduced from 2027 onwards to protect trade union members from workplace discrimination and 'blacklisting'.
Employment reforms timeline
Staying on top of these changes is crucial for employers. It's a good idea to review your current policies and contracts to make sure they're ready for when the new laws take effect. If you're unsure whether your existing documents are compliant, you can use our Document review service to have a lawyer check them for you. Should you need to make updates, you can easily make an Employee handbook and new Employment contracts to stay compliant. If you have any questions or concerns about how these changes affect your business, don't hesitate to Ask a lawyer.
