The Employment Rights Act 2025

After much debate, the Employment Rights Bill became law on 18 December 2025. Whilst many details remain subject to further consultation and phased implementation, our employment law specialists are on hand to advise you.

This guide covers how to manage the impact on your business as we navigate the biggest change to employment protections for a generation.

Preparing now will help ensure your business remains compliant while maintaining the trust and confidence of your workforce.

When will the Employment Rights Act changes take place?

The Employment Rights Act 2025 introduces additions and amendments to existing legislation, including the Employment Rights Act 1996. Changes will be enacted over a period of 2 years, with most happening throughout 2026-2027. See our Employment Rights Act roadmap for further detail.

Some changes have already taken effect, and rules around ‘minimum service levels’ for strike action to take place were removed on 18 December 2025. February 2026 saw further strengthening of trade union protections, while April 2026 saw many more changes.

We appreciate that all these changes can be daunting. Our specialist employment law team are on hand to help you prepare: both to stay on the right side of the law and to generate positive outcomes for your business and employees.

Read on or use the links below to find out about the changes, and how as an employer you can adapt to your new responsibilities.

Paternity leave and unpaid parental leave

From April 2026, eligibility requirements for paternity leave and ordinary parental leave have been removed and entitlement to leave has become a ‘day one right’. This allows someone to give notice of leave from the first day of employment. Previously, employees must have had 26 weeks’ continuous service to qualify.

Another change in April 2026 was the removal of the restriction on taking paternity leave after shared parental leave. This replaced the situation where employees would lose their entitlement to paternity leave and pay if they opted to take shared parental leave first.

Sick pay

From April 2026 statutory sick pay should be paid from the first day of illness, instead of the fourth day. The lower earnings limit has been removed, meaning that workers no longer need to earn a minimum amount to be eligible for statutory sick pay.

Flexible working

Since 2024 all employees have had the right to request flexible working from day one of their employment. Employers must give a decision within two months of the request being made, and can refuse it for one of eight statutory reasons. There will be an amendment to flexible working law in 2027 to tighten up the rules on employer refusals, placing a greater responsibility on the employer to justify their decision.

If an employer rejects a flexible working request because of a genuine business reason, they must:

• state the reasons
• explain why the refusal is considered reasonable

Most employers do this as a matter of good practice, but it will become a legal requirement to do so from 2027.

Increased pregnancy and maternity rights

The Employment Rights Act 2025 will strengthen protections against dismissal for pregnant workers and those returning from maternity leave. A consultation on this was opened on the 23 October 2025 and concluded on the 15 January 2026.

Since April 2024, pregnant employees have had the right to be offered suitable alternative employment in a redundancy situation from the moment they advise their employer of their pregnancy – where such suitable alternative employment is available. This protection continues throughout pregnancy until 18 months after the child is born.

From 2027, it will be unlawful to dismiss a pregnant employee or one returning from maternity leave within six months of their return (with the exception of certain limited circumstances – for example, gross misconduct). The enhanced protection from dismissal will not only relate to redundancy, but to any dismissal.

Bereavement leave

There will be a new right to statutory bereavement leave from 2027, which will extend to leave for non-parents and early pregnancy loss.

It is not known yet whether this will be paid or unpaid leave, but it will cover a wider class of family members. A consultation on this was opened on the 23 October 2025 and concluded on the 15 January 2026.

Employment tribunal time limits (October 2026)

Time limits for making a claim to an employment tribunal will increase to 6 months for most claims. The current time limit for most claims is 3 months.

Collective redundancies

Previously, a collective redundancy situation happened when an employer proposes to dismiss 20 or more employees at one establishment within a 90-day period. Employers were required to consult with the representatives of affected employees. Minimum consultation periods applied, as did specific notification requirements.

Beginning in April 2026, the maximum ‘protective award’ – for failure to consult in a collective redundancy situation – has doubled from 90 days’ pay to 180 days’ pay per affected employee. This increases the financial risk for failure to comply with consultation requirements significantly.

From 2027, the following changes to collective redundancy laws will apply:

• employers will need to consider the total number of redundancies across their whole organisation rather than individual workplaces
• increased collective redundancy protection for workers on ships that regularly operate from British ports but are registered outside Great Britain

Dismissal and rehire

Dismissing someone then rehiring them on worse terms and conditions (‘fire and rehire’ practices) will be automatically unfair in most cases from October 2026.

Unfair dismissal (1 January 2027)

Protection from unfair dismissal will become a right after six months of being in a job. Currently, someone must have worked for their employer for two years before claiming unfair dismissal. This will apply retrospectively which means that anyone employed prior to 1st January 2027 will be protected from unfair dismissal provided they have six months continuous service. So it’s important to start reviewing your contracts and policies now.

The cap on compensation in a successful claim will be removed.

Tipping (October 2026)

Tipping law will change in October 2026. Employers will need to consult with workers or their representatives before creating a tipping policy. They will need to update their tipping policy every three years.

Zero-hours contracts (2027)

Workers on zero-hours contracts will get the right to guaranteed working hours which must be offered at the end of every reference period, if they want them.

There will be a consultation on this in 2026.

Compensation for cancelled shifts (2027)

Workers will have the right to be paid if a shift is cancelled or postponed at short notice, or cut short by an employer, or where the worker refuses a shift because the employer has not provided reasonable notice.

This will mark a huge shift for businesses who rely on flexible or last-minute staffing.

Read more about changing terms of employment.

Harassment

Raising concerns of sexual harassment has become a ‘qualifying disclosure’ under whistleblowing law from April 2026. This provides protection from detriment and unfair dismissal for whistleblowers making a sexual harassment disclosure.

In other words, it is now unlawful to treat someone unfavourably because they have raised concerns around sexual harassment. Any dismissal because they have done so would be automatically unfair.

Harassment from third parties

With effect from October 2026, employers will be liable for harassment from third parties, for example customers or contractors, unless they have taken all reasonable steps to prevent it from occurring. This will apply to all types of harassment and will be a marked difference to the current position, whereby employers are only liable for discrimination and harassment committed by employees in the course of their employment.

Employers will need to take all reasonable steps to prevent sexual harassment – the current law is limited to “reasonable steps”. From 2027, it’s expected that the law will specify what ‘reasonable steps’ means when preventing sexual harassment.

NDAs

A change to the law around non-disclosure agreements (NDAs) is also expected. This will void confidentiality clauses that would prevent workers from alleging or disclosing work-related harassment or discrimination.

Gender pay gap and menopause action plans

Large employers (those with 250 or more employees) will need to publish annual action plans around menopause support and gender pay gaps. These are voluntary from 6 April 2026, but will become mandatory in 2027, so it would be best practice to start work on these plans now.

Changes to the rules on trade union recognition and enhanced protections for workers taking part in industrial action will likely lead to increased union engagement in the workplace. Some changes have already been applied, and rules around ‘minimum service levels’ for strike action to take place were removed on 18 December 2025.

On 18 February 2026 a raft of changes around trade union activity came into effect, including changes to the notice requirements and voting thresholds for industrial action to be taken.

On 6 April 2026 further laws came into effect simplifying how a trade union can gain recognition in a workplace, allowing trade union members to vote electronically and removing the requirement for a 50% turnout for industrial action ballots.

In October 2026 further changes will include:

• a new duty for employers to inform workers of their right to join a trade union
• updated rules on a trade union’s right of access to the workplace
• a new right to request reasonable accommodation and facilities for trade union representatives carrying out their duties
• a new right to time off for union equality representatives to carry out their duties
• workers taking part in industrial action will be protected against detriment, in addition to unfair dismissal. ‘Detriment’ is when someone is treated less favourably by their employer.

2027 will see further changes to industrial relations law. Examples would be the extension of laws that protect trade union members from discrimination and being blacklisted and a new industrial relations framework, to help employers and trade unions work together.

Fair Work Agency (April 2026)

The Fair Work Agency (FWA) was established on 7 April 2026, to:

• bring together existing enforcement bodies
• take on enforcement of other employment rights, such as holiday pay, national minimum wage and statutory sick pay

The FWA will deal with enforcement functions that are currently carried out by government agencies and HMRC. They have powers that include entering premises and bringing claims on behalf of employees.

Public sector outsourcing ‘two-tier code’ (October 2026)

There will be new measures for public sector outsourcing. This is to avoid having different terms and conditions for ex-public sector employees and private sector employees.

New Adult Social Care Negotiating Body (October 2026), and Seafarers’ charter (December 2026)

There will be a new negotiating body for adult social care.

There will also be one change in December 2026 which is specific to the seafarer industry, with a new mandatory charter for seafarers being introduced with higher standards around health and safety, pay, job security and rest breaks.

Regulation of umbrella companies (2027)

The definition of agencies will be expanded to include umbrella companies, which will allow enforcement by the relevant bodies.

As with anything, preparation is key to avoiding mistakes and inadvertently falling foul of the sweeping changes outlined above.

With phased implementation dates and ongoing consultation, it’s easy to feel overwhelmed. Proactive management is key to preparing your business and ensuring not only that it remains compliant, but that by engaging with your workforce you remain a trusted employer who individuals want to work for. This not only minimises the risk of grievances – and, in the worst case, costly and time consuming litigation – but a committed workforce allows your business to grow.

We recommend the following:

• Sign up to our regular Employment Law Briefings to keep up to speed with changes as they are implemented
• Review your existing contracts, policies and procedures and make sure these are updated regularly to ensure compliance and to prepare for upcoming changes
• Offer support and training to managers to ensure they are aware of Employment Rights Act 2025 and the obligations on employers
• Engage with staff, through mediums like regular one-to-ones or the appointment of a staff council. This will help ensure that you’re aware of what’s happening and spot any warning signs or concerns at an early stage.

We recognise that navigating HR and employment law issues can be a minefield.

We work closely with employers to help reduce risk. We enable business owners to focus on growing their business and the things that matter to them.

Contact us on 03456 465 465.

If you want to engage a commercially-minded team to provide you with employment law and HR advice on an ongoing basis, ask us about our bespoke Employment Law Retainer Service today.