Employment Rights Act 2025: What Employers and Employees Need to Know

The Employment Rights Act 2025 became law on 18 December 2025, and its changes are rolling out across the UK throughout 2026 and into 2027. The Act introduces some of the most significant reforms to UK employment law in a generation, covering everything from day one sick pay and paternity leave rights to new protections against exploitative zero-hours contracts, unfair dismissal and “fire and rehire” practices. Whether you are an employer trying to understand what is expected of you, or an employee keen to know what additional rights you will gain, now is the time to get to grips with what is changing and when.

Big changes to employment law do not come around often. When they do, it can be difficult to know which changes apply to you, when they take effect, and what practical steps you need to take in response. The Employment Rights Act 2025 is a landmark piece of legislation that has been described by the government as the biggest upgrade to workers’ rights in a generation, with over 15 million people across the UK expected to benefit. The changes are being introduced gradually between now and 2027, giving both employers and employees time to adjust. This article sets out the key changes, when they apply, and what they mean in practice.

Some provisions of the Employment Rights Act 2025 came into force immediately on 18 December 2025, with further changes taking effect on 18 February 2026.

The rules on minimum service levels during strikes have been removed, and from 18 February 2026, dismissal for taking part in lawful industrial action is automatically unfair, with the previous 12-week limit abolished. Notice periods for industrial action have been reduced from 14 days to 10 days, and industrial action mandates now last for 12 months rather than six. These changes primarily affect unionised workplaces and are largely relevant to larger employers across the UK.

Some provisions of the Employment Rights Act 2025 came into force immediately on 18 December 2025, with further changes taking effect on 18 February 2026.

Currently, employees must wait three days before Statutory Sick Pay (SSP) begins, and must earn above a lower earnings limit to qualify. From 6 April 2026, both of these restrictions are removed. SSP will be payable from the first day of illness, and all employees will be eligible regardless of their earnings.

Up to 1.3 million low-paid workers are expected to benefit, including many who work part-time or in insecure employment. For employers, this means a higher SSP liability and a need to update sickness absence procedures accordingly.

Where an employer fails to properly consult employees during a collective redundancy process, the maximum protective award will double from 90 days’ pay to 180 days’ pay. This significantly increases the financial risk for employers who do not follow the correct consultation process when making 20 or more redundancies within 90 days.

Sexual harassment will become a qualifying disclosure under whistleblowing law from 6 April 2026. This means that employees who report sexual harassment in the workplace will receive additional protection against detriment or dismissal as a result of making that disclosure.

A new Fair Work Agency will be established on 7 April 2026. It will bring together existing enforcement bodies and take on enforcement of employment rights including holiday pay and statutory sick pay. Employers should be aware that the landscape for enforcement is becoming more structured and robust.

From October 2026, employers will be liable for harassment caused by third parties, such as customers or clients, unless they have taken all reasonable steps to prevent it. This applies to all forms of harassment, not just sexual harassment. Employers should review their policies, training and complaints procedures well in advance of this date.

Time limits for bringing employment tribunal claims will increase to six months for all claim types. Most claims currently have a three-month limit. This change will give employees more time to seek advice and take action, and employers should ensure their records are maintained accordingly.

Currently, employees must have worked for their employer for two years before they are entitled to claim unfair dismissal. From 1 January 2027, that qualifying period drops to six months. This is one of the most significant changes for employers, as it significantly narrows the period in which a dismissal is largely uncontested. Robust and well-documented performance management processes will become even more important.

Dismissing an employee and rehiring them on less favourable terms, sometimes called “fire and rehire” or “fire and replace”, will become automatically unfair dismissal in most circumstances from 1 January 2027. This closes a loophole that some employers have used to reduce employment costs or change working conditions without agreement.

A further range of changes are expected during 2027, though precise dates for many are still subject to government consultation.

• Zero-hours contracts: Workers on zero-hours and low-hours contracts will gain the right to request a guaranteed-hours contract reflecting their actual working pattern, if they choose to do so.
• Shift cancellation pay: Workers will have the right to payment if a shift is cancelled at short notice, moved or cut short by the employer.
• Reasonable notice of shifts: Employers will be required to give reasonable advance notice of working hours and any changes to them.
• Bereavement leave: A new statutory right to unpaid bereavement leave will be introduced, expected to benefit up to 2.7 million employees a year.
• Enhanced pregnancy and maternity protections: Protections for pregnant workers and those returning from maternity leave will be strengthened.
• Flexible working: Employers who refuse a flexible working request on genuine business grounds will need to clearly state their reasons from a prescribed list and explain why their refusal is reasonable.

The phased introduction of these changes is designed to give employers time to prepare, and that time should be used wisely. Here are the most important practical steps.

• Review your employment contracts: Ensure contracts and offer letters reflect the new day one rights to paternity leave, parental leave and sick pay.
• Update HR policies and staff handbooks: Policies covering sickness absence, flexible working, harassment and redundancy will all need to be reviewed.
• Strengthen your performance management processes: With unfair dismissal protection arriving at six months, early and well-documented management of performance issues becomes essential.
• Review redundancy procedures: Given the doubling of the collective redundancy protective award, thorough and properly documented consultation is more important than ever.
• Take legal advice: The interaction between UK-wide legislation and day-to-day employment management can be complex. Taking professional advice early is always preferable to dealing with a claim later.

Employment law is rarely straightforward, and the arrival of the Employment Rights Act 2025 adds a further layer of complexity for employers and employees alike. At Pomphreys, our experienced employment law team takes a clear, practical approach to helping clients understand their rights and obligations. Whether you are an employer preparing for the changes ahead or an employee who needs advice on how the new legislation affects you, we are here to help.

If you have questions about how the Employment Rights Act 2025 affects your business or your position as an employee, get in touch with Pomphreys today for straightforward, jargon-free advice.

Employees on low pay or in insecure work stand to gain the most. From April 2026, Statutory Sick Pay will be available from day one of illness regardless of earnings, and paternity and parental leave become day one rights. From January 2027, unfair dismissal protection will kick in after just six months in a job rather than two years. Workers on zero-hours contracts will also gain stronger protections in 2027.

No, zero-hours contracts will not be banned outright. However, from 2027, workers on these contracts will have the right to request a guaranteed-hours contract that reflects the hours they regularly work. They will also be entitled to compensation if shifts are cancelled at short notice. The aim is to reduce the insecurity associated with these arrangements rather than eliminate them altogether.

The Fair Work Agency will be established on 7 April 2026. It brings together existing enforcement bodies and takes responsibility for enforcing a range of employment rights, including those relating to holiday pay and Statutory Sick Pay. Its creation signals a more coordinated and proactive approach to employment rights enforcement in the UK.

If you are an employer, reviewing your contracts and policies in light of the changes is strongly advisable. The cost of getting it wrong, particularly in areas like collective redundancy or unfair dismissal, can be significant. If you are an employee who believes your rights have not been respected, speaking to a solicitor can help you understand your options. Pomphreys’ employment law team is here to help.

Sarah Lynch is the Managing Partner at Pomphreys. Sarah studied at Dundee University, achieving a 2:1 LLB Honours degree in Scots Law. She then moved back to Glasgow to study the Diploma in Legal Practice, being one of only a small number of students to be offered a funded position for academic excellence achieved during the LLB. Sarah then secured a traineeship concentrating on Personal Injury before deciding to broaden her scope of work to all civil litigation. We recently caught up with Sarah to discuss her role in Pomphreys.

Tel: 01698 373 365

Email: sl@pomphreyslaw.com

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