Employment Rights Act 2025: Complete Employer Guide
Employment Rights Act 2025: Complete Employer Guide
The Employment Rights Act 2025 received Royal Assent on 18 December 2025. It is the largest overhaul of UK employment law since the Employment Rights Act 1996. If you employ people in the UK, this affects you.
The changes are being rolled out in phases from early 2026 through to 2027 and beyond. Some are already in force. Others are coming in months. This guide covers every major change, when it takes effect, and what you need to do right now.
Key facts:
- Royal Assent: 18 December 2025
- First wave of changes: 6 April 2026
- Affects approximately 5.5 million UK employers
- Phased rollout continues through 2027
What Is the Employment Rights Act 2025?
The ERA 2025 is the legislative form of the government's Plan to Make Work Pay. It was introduced as the Employment Rights Bill in October 2024 and passed into law in December 2025.
The Act covers a wide range of employment rights, from sick pay and parental leave to trade union access and unfair dismissal protections. Not all changes are controversial. Many are technical updates. But several have significant practical implications for how you hire, manage, and dismiss staff.
The government is phasing in the changes to give employers time to prepare. That said, the first wave arrives 6 April 2026, which is now weeks away for most employers reading this.
Every Change: What It Is and When It Applies
Changes Already in Force
February 18, 2026:
- Trade union law simplified. The majority of the Trade Union Act 2016 was repealed. Requirements around industrial action notices, ballot notices, and political funds were simplified. If you have trade unions active in your workplace, review your recognition agreements and facility time arrangements.
- Paternity leave and parental leave notice. Employees who will become eligible for Day 1 Paternity Leave and Day 1 Unpaid Parental Leave from April 6 could begin giving notice from February 18. You may already have received notice from staff.
April 1, 2026
- Certification Officer levy repealed. Trade unions and employer associations no longer pay this levy. Minor administrative change.
April 6, 2026
This is the main wave. If you have done nothing yet, these changes need action now.
1. Statutory Sick Pay from Day One
The three-day waiting period for SSP is abolished. From 6 April 2026, employees are entitled to SSP from the first day of sickness absence. The Lower Earnings Limit (LEL) is also removed, meaning lower-paid and part-time workers who previously earned below the threshold now qualify.
What to do: Update your sickness absence policy. Remove any reference to waiting days. Review your payroll setup. Check that your written statement of particulars reflects the new rules.
Full guide: SSP from Day One 2026
2. Day One Paternity Leave
Paternity leave becomes a day one right. Employees no longer need 26 weeks of qualifying service to take paternity leave. The notice period has also been reduced: employees must give at least 28 days' notice (previously 15 weeks).
What to do: Update your paternity leave policy. Remove the 26-week qualifying requirement. Ensure your managers know that new starters can take paternity leave from day one.
Full guide: Paternity Leave Changes 2026
3. Day One Unpaid Parental Leave
Unpaid parental leave (up to four weeks per year, capped at 18 weeks per child) is now a day one right. The 26-week qualifying period is removed.
What to do: Update your parental leave policy. Managers should not refuse or delay parental leave requests from new starters on the grounds that they have not completed 26 weeks' service.
4. Collective Redundancy: Protective Award Doubled
If you make 20 or more redundancies within 90 days without following the collective consultation process, the maximum protective award has doubled from 90 days to 180 days' gross pay per employee.
This is a significant financial risk. An employer making 20 redundancies at an average weekly wage of £600 who fails to consult properly could face a tribunal award of £1.56 million.
What to do: Review your collective redundancy process. Ensure you know the consultation rules. Read the step-by-step guide below.
Full guide: Collective Redundancy Protective Award 2026
5. Whistleblowing: Sexual Harassment Added
Raising concerns about sexual harassment in the workplace is now a qualifying protected disclosure. This means employees who report sexual harassment are protected as whistleblowers, with access to uncapped compensation and protection from detriment.
What to do: Update your whistleblowing policy to include sexual harassment as a qualifying concern. Ensure your managers understand that any retaliation against someone who reports sexual harassment is a serious legal risk.
6. Bereaved Partners' Paternity Leave
A non-Plan to Make Work Pay measure also takes effect on 6 April 2026. If a mother or primary adopter dies within the first year of a child's life, the bereaved partner can take up to 52 weeks of paternity leave.
What to do: Update your bereavement and paternity leave policies to cover this scenario. Consider how you would support a bereaved employee practically.
April 7, 2026
Fair Work Agency established. A new enforcement body for employment rights launches. It will consolidate enforcement of minimum wage, holiday pay, sick pay, and labour exploitation laws. Penalties for non-compliance are expected to increase. This is a signal that enforcement is being taken more seriously.
August 2026
Electronic and workplace balloting for statutory trade union ballots. Trade unions can now use electronic and workplace balloting for statutory ballots. For most employers, this is a background change, but it may make it easier for unions to organise industrial action ballots.
October 2026
Several significant changes arrive in October 2026.
1. Enhanced Sexual Harassment Duty
Employers must take "all reasonable steps" (previously "reasonable steps") to prevent sexual harassment of their employees. Additionally, a new duty is introduced: employers must not permit harassment of their employees by third parties (customers, clients, contractors).
What to do: Conduct a risk assessment for sexual harassment in your workplace. Update your anti-harassment policy. Deliver training to managers and staff. Document what steps you have taken. An employer who cannot demonstrate active preventative steps faces enhanced tribunal awards.
Full guide: Sexual Harassment Employer Duty 2026
2. Trade Union Rights Strengthened
From October 2026:
- Employers must inform workers of their right to join a trade union
- Trade unions have a strengthened right of access to workplaces
- New rights and protections for trade union representatives
- Unfair practices in the recognition process are tightened
What to do: Review your contracts of employment and written statements. Ensure you are providing required information about trade union rights. Understand what strengthened access rights mean for your business.
Full guide: Trade Union Rights Employer Guide
3. Fair Pay Agreement: Adult Social Care
Regulations to establish a Fair Pay Agreement for Adult Social Care in England. A Negotiating Body will be created to set pay and conditions for the sector. If you operate in adult social care, this is a significant change requiring dedicated planning.
4. Tipping Law Tightened
Minor tightening of the tipping allocation rules. Employers in hospitality must ensure tips are distributed to workers in a fair and transparent way.
October 2026 (No Earlier Than)
Employment Tribunal Time Limits Extended. The current three-month time limit for bringing most employment tribunal claims is expected to be extended to six months. This gives employees longer to pursue claims. Review your record-keeping practices now: you will need to retain documentation for longer.
January 2027
1. Unfair Dismissal Qualifying Period Reduced to Six Months
This is the biggest change coming for most employers. The two-year qualifying period for unfair dismissal is being reduced to six months, for dismissals from 1 January 2027.
This does not technically create "day one" unfair dismissal rights, but it is a fundamental change in how you manage underperforming or unsuitable employees. Staff you hire from July 2026 onwards will have unfair dismissal protection after just six months.
Compensatory awards are also being uncapped.
What to do: Review your probationary period policy. A well-designed six-month probation, with documented performance reviews, formal warnings, and a clear process for extension or termination, is now your primary protection. You cannot simply dismiss someone at five months and 29 days with a free hand. You need a process.
Full guide: Day One Unfair Dismissal: What Employers Need to Prepare For
Full guide: Probationary Periods After ERA 2025
2. Fire and Rehire Protections
From January 2027, dismissing an employee and offering re-engagement on inferior terms will be significantly restricted. Changes to terms and conditions of employment will require genuine business justification and a proper process. The days of issuing redundancy notices as leverage in negotiations over pay cuts are largely over.
What to do: Review any planned changes to employment terms. If you are considering changing contracts, start the consultation process early and document genuine business reasons.
Full guide: Fire and Rehire: New Restrictions for UK Employers
2027 (Dates to Be Confirmed)
The following measures are expected in 2027, with exact dates subject to consultation:
- Flexible working: Stronger provisions making flexible working a more entrenched default right
- Guaranteed hours for zero hours workers: Employers will need to offer guaranteed hours to workers who consistently work regular hours
- Bereavement leave: Including pregnancy loss leave
- Enhanced dismissal protections for pregnant women and new mothers
- Regulation of umbrella companies
- Collective redundancy consultation threshold change
Full guide: Zero Hours Contracts Employer Guide 2026
What Employers Should Do Right Now
Immediate Actions (Before 6 April 2026)
- Update your sick pay policy. Remove the three-day waiting period. Update payroll.
- Update your paternity and parental leave policies. Remove the 26-week qualifying service requirement.
- Brief your managers. They need to know about the day one paternity and parental leave changes before new starters ask.
- Review your collective redundancy process. If there is any prospect of 20+ redundancies, make sure your process is watertight.
- Update your whistleblowing policy. Add sexual harassment as a qualifying disclosure.
Actions Before October 2026
- Sexual harassment risk assessment. Conduct and document it. Commission training for managers.
- Review trade union obligations. Especially if you employ trade union members or have a recognition agreement.
- Extend your disciplinary and dismissal record-keeping. With tribunal time limits extending, keep records for longer.
Actions Before January 2027
- Redesign your probationary period process. Build in documented reviews, formal warnings, and a clear dismissal procedure within six months.
- Review any planned contract changes. If you want to change terms and conditions, start consulting now and document everything.
The Financial Stakes
The ERA 2025 is not just an administrative burden. The financial risks of non-compliance are real:
- Collective redundancy failure: Up to 180 days' gross pay per employee
- Unfair dismissal (from January 2027): Uncapped compensatory awards
- Sexual harassment (from October 2026): 25% uplift on tribunal awards if you had no prevention policy
- Whistleblowing retaliation: Uncapped compensation
An employment tribunal claim costs an employer an average of £8,500 in legal costs alone, before any award. The cost of getting compliant now is a fraction of that.
FAQ: Employment Rights Act 2025
Does the Employment Rights Act 2025 apply to small businesses?
Yes. There are no blanket small business exemptions. Some measures have thresholds (collective redundancy applies from 20 employees, for example), but the core changes to SSP, paternity leave, whistleblowing protections, and unfair dismissal apply regardless of business size.
When does the Employment Rights Act 2025 come into force?
In phases. The first major wave was 6 April 2026. Subsequent waves in October 2026 and January 2027. Some measures are expected in 2027 with dates to be confirmed.
Do I need to update my employment contracts because of the ERA 2025?
Possibly. Your written statement of particulars must be accurate and up to date. If your contracts reference waiting days for SSP, or require 26 weeks' service for paternity leave, those clauses are now wrong. Other contract terms will need reviewing as later waves take effect.
What is the Fair Work Agency?
A new enforcement body launched 7 April 2026. It brings together enforcement of minimum wage, holiday pay, sick pay, and labour exploitation under one roof. Its powers will expand over time. The message is that non-compliance with basic employment rights will be actively enforced, not just tribunal-based.
Is the qualifying period for unfair dismissal changing to day one?
No, not day one. It is being reduced from two years to six months, for dismissals on or after 1 January 2027. "Day one" unfair dismissal was discussed during the Bill's passage but the final Act reduced the period to six months, not zero.
Where can I get help reviewing my contracts?
EmployerKit Audit checks your contracts and policies against the ERA 2025 requirements and tells you exactly what needs updating. From £49.
Get Your Contracts Checked
The ERA 2025 changes are not optional, and the phased rollout means the clock is already ticking. Get your employment contracts and policies checked against the new rules before the next wave hits.
EmployerKit Audit from £49. Upload your contract. Get a red/amber/green gap analysis and draft replacement clauses. Know where you stand in 24 hours.
Last updated: April 2026
Get your contracts audited. From £49.
Spot ERA 2025 compliance gaps before they become tribunal claims.
Frequently asked questions
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