The Employment Rights Act 2025 (“ERA 2025”) received Royal Assent on 18 December 2025 and represents one of the most significant shifts in employment law for many years. Its impact will be felt across every stage of the employment lifecycle; how organisations recruit, engage, manage and dismiss staff, and how they plan their future workforce.
The Act introduces enhanced family leave rights, updates key areas of equality law and strengthens trade union protections. Implementation will take place between 2025 and 2027, with many of the detailed requirements to be shaped through consultation and secondary legislation.
To help you stay ahead, we’ve set out clear, practical guidance on what these changes mean in practice and how your business can prepare. From timelines and insights to podcasts, webinars and hands‑on HR support, we offer the right solutions at the moment you need them, ensuring you remain compliant, informed and commercially ready for what’s ahead..
Key proposed changes and impact
Statutory Sick Pay
Currently
Qualifying employees receive Statutory Sick Pay (SSP) from their fourth day of sickness absence and must earn above the statutory Lower Earnings Limit (LEL) threshold (as set each year).
What is changing
The three-day waiting period will be removed, meaning SSP will be payable from day one of absence. Eligibility extended to those earning below the Lower Earnings Limit (LEL) (payable at 80% of earnings up to the SSP flat weekly statutory amount).
Impact
This change will have a significant impact on sickness absence costs for employers. Greater internal focus on absence management processes will be needed which should include better reporting and tracking of absences, training for managers around spotting poor absence and why management is so important.
When
April 2026
Family leave
Currently
Eligible employees must be continuously employed for 26 weeks to qualify for paternity leave and for 12 months to qualify for parental leave. Also, if an employee has taken Shared Parental Leave (SPL) first, they forfeit their right to take paternity leave.
What is changing
Statutory paternity and parental leave will become day one leave rights (eligibility requirements for statutory paternity pay remain, parental leave remains unpaid). Removal of the anomaly regarding the taking of paternity leave and SPL.
Impact
Employers will need to revisit their family leave policies and update. Training advised for managers on new leave obligations. The paternity leave / SPL anomaly removal will mean that those eligible can flex when they take SPL and paternity leave but also mean we need clear internal triggers.
When
April 2026
Bereavement Leave
Currently
No statutory right to take bereavement leave (save in situations where statutory parental bereavement leave applies).
What is changing
Introduction of a day one right to (at least) one week’s unpaid statutory bereavement leave (eligibility/details awaited), including for miscarriage/pregnancy loss before 24 weeks.
Impact
Unlikely to create significant new costs as many employers will currently offer discretionary leave in these cases; however, policies will need to be revisited and updated and awareness raised of new rights. Also, watch out for the introduction of Partner Bereavement Leave from February and April 2026.
When
2027
Increased dismissal protection (pregnancy and maternity
Currently
There are specific requirements to offer any suitable available vacancy to those employees ‘at risk’ of redundancy who are pregnant / on maternity, adoption, neonatal care or shared parental leave, and for a period of time after they return to work (this is 18 months after the child’s birth / placement and for SPL / neonatal care leave, this right applies after returning from leave of at least six continuous weeks).
What is changing
Expect additional regulations preventing employers from dismissing women during pregnancy / maternity leave and for six months following a return to work (except in specific circumstances). Details awaited and are currently being consulted upon. Options in the consultation include removing certain potentially fair statutory dismissal grounds (for example, redundancy) thereby making it unlawful to dismiss for certain statutory grounds (except in – as yet defined – exceptional circumstances) or to have a separate test of ‘fairness’ which employers will have to meet when dismissing a pregnant woman / recent maternity returner. Also note that this change could also be extended to cover those on adoption or shared parental leave (and maybe paternity and neonatal care leave).
Impact
Potential to add complications to redundancy / reorganisation or other internal performance management and disciplinary processes. Audit staff prior to key workplace restructures and ensure managers are aware of new rights and processes so that dates are not missed.
When
2027
Equality actions plans
Currently
Employers with 250 and over employees must report their gender pay gap annually but no requirement to implement an action plan to reduce any identified pay gap.
What is changing
New requirements for employers with 250 and over employees to implement equality action plans, including information to address their gender pay gap and to support employees going through menopause.
Impact
More work will be required of employers. Scope and implementation of action plans could become grounds for dispute in claims of discrimination. Expect further reporting on disability and ethnicity pay gaps (details awaited under separate legislation).
When
Voluntary action plans from April 2026, mandatory from 2027.
Flexible working
Currently
Universal, day one right for employees to request statutory flexible working. A statutory framework and an ACAS Code of Practice apply. A request may be rejected on one (or more) of the eight ‘statutory grounds’.
What is changing
An employer’s refusal must be reasonable, and the employer must write to the employee explaining why it is reasonable and the statutory ground relied on.
Impact
Greater emphasis on evidence and reasoning where a request is refused is going to be necessary. This will involve engagement from managers as well as tighter internal processes. Likely to open up another battleground when an employer rejects a request. Reviewing processes and manager training a must.
When
2027
Fire and re-hire and 'restricted variations'
Currently
Where an employee fails to agree a contract change, an employer can (subject to complying with rules relating to dismissal / fairness / collective rights / 2024 Code of Practice) dismiss an employee by giving them correct notice and offering re-engagement on new / less favourable terms before notice expires.
What is changing
Where an employer is proposing to make ‘restricted variations’, it will be automatically unfair to dismiss an employee for refusing to accept these changes unless the employer can show dire financial straits and no alternative available. Restricted variations would include changes to pay, time off work, hours, shifts and pensions. It also includes seeking to amend contracts to include a variation clause in the contract which would enable the employer to make a restricted variation to the contract without the employee’s agreement. Similarly, dismissing an employee and replacing them with another employee or an agency worker / self-employed contractor will also be automatically unfair. Dismissal in the case of other contract changes could still be unfair, and the employer will need to satisfy new / additional Employment Tribunal ‘fairness tests’.
Impact
Employers will have narrower grounds on which to force through contract changes, even in times of business difficulty, and the process will become riskier. Review contracts now, take advice and consider when pay reviews are.
When
October 2026
Sexual harassment'
Currently
The Worker Protection (Amendment of Equality Act 2010) Act 2023 places a positive and proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment, including by third parties. Failure to comply can lead to increased compensation in discrimination and harassment claims (up to 25%).
What is changing
Increasing the burden on employers to take ‘all reasonable steps’ when it comes to preventing sexual harassment at work. Also, Regulations (expected late in 2027) to give guidance as to what constitutes “all reasonable steps”.
Impact
Employers will find it more difficult to discharge the burden of having taken ‘all’ reasonable steps to prevent sexual harassment. This will become an area of challenge in claims. A key area of focus for employers. Revisit risk assessments, training (a must area), awareness, complaint processes, and monitoring.
When
October 2026
Third party harassment
Currently
No standalone claim for workplace third party harassment under the Equality Act 2010.
What is changing
Employers will be liable to their employees for workplace third party harassment (i.e., from clients, customers, the public) where they have not taken all reasonable steps to prevent it. Also includes liability for third party sexual harassment.
Impact
This change will be hugely significant in terms of claims and risks. Employers will need to include third party harassment in their risk assessments, policies, and training as well as revisit commercial terms and contracts with third party providers and clients.
When
October 2026
Non-disclosure agreements
Currently
In most cases, non-disclosure agreements (NDAs), including settlement agreements, may include confidentiality clauses preventing an employee discussing claims / issues which have arisen during their employment / termination (save for qualifying ‘protected disclosures’).
What is changing
Proposed ban on NDAs (including settlement agreements) preventing employees discussing / raising allegations of workplace harassment / sexual harassment / discrimination. Any clause purporting to ‘gag’ an employee will be void.
Potential exception: where the NDA is requested by the employee (having received independent legal advice).
Impact
Defending rather than settling harassment claims may be preferable where there is a substantial risk of the employee going public even in a settlement.
When
No date yet
Whistleblowing
Currently
Workers who make qualifying ‘protected disclosures’ (blow the whistle) are protected from detrimental treatment and dismissal as a result. NDAs are void in so far as they seek to prevent a worker from blowing the whistle. A disclosure only qualifies for protection if it discloses information about one or more of six specified types of malpractice, wrongdoing, or failure.
What is changing
A disclosure of information that sexual harassment has occurred, is occurring or is likely to occur will be a qualifying disclosure attracting whistleblowing protection.
Impact
Employers will need to ensure that they have clear reporting channels and processes if a whistleblowing complaint is raised as well as understanding the risks of dismissal and detriment claims.
When
April 2026
Guaranteed hours for zero (and low) hours and agency workers
Currently
Save for core statutory basic entitlements (e.g., Equality Act 2010 protection, working time and minimum wage), and clauses which seek to prevent workers working for other employers, employers and zero hours workers have contractual flexibility.
What is changing
Employers will be required to offer zero / low hours workers guaranteed hours based on the number of hours regularly worked (based on a (likely) 12-week reference period). The worker does not have to accept the new contract. The need to keep offering contracts reflecting actual hours worked will be ongoing (i.e., businesses will need to review actual hours worked every – we think – 12 weeks and offer a new contract again and again to reflect hours worked). This is not a one-off exercise!
Workers will be entitled to reasonable notice of shift changes and cancellations with employers liable for compensation if not given. These new measures will also be extended to agency workers. Definitions and details awaited and of course, this is an area of challenge by the House of Lords.
Impact
These changes (as well as changes to umbrella companies – see later) are likely to impact the way employers use and engage with workers and agency staff. Record keeping, reviewing commercial agency terms and worker contracts and auditing of staff will be essential.
When
2027
Unfair dismissal qualification periods and removal of compensation cap
Currently
Save for automatic unfair dismissal, employees need at least two years’ qualifying continuous employment to bring an ordinary unfair dismissal claim. There is a cap on compensation for unfair dismissal which is either (currently) £118,223 or 52 weeks’ pay, whichever is the lower amount.
What is changing
Reducing the qualifying period of service to six months. Removal of the compensation cap in its entirety, although the Government have committed to undertaking an impact assessment as to the removal of the cap before it is introduced.
Impact
Day one unfair dismissal rights were a manifesto pledge; however, to get the ERA through and to allow the implementation timetable to move forward, the Government have changed their mind and have accepted a reduction on the current two-year qualifying period to six months service. The impact of reducing the service qualification period and changes to the compensation regime should not be underestimated as there will be a greater burden on employers from increased claims and compensation, particularly for higher earners. Expect compensation and schedules of loss to become more complicated with claims for bonuses, shares, pensions and other incentive schemes. Employers will need to revisit probation periods and processes, ensure managers are trained in how to manage probation and performance management more generally. Review recruitment plans, contracts of employment and onboarding.
Remember too that ending of a fixed term contract is still a ‘dismissal’. Advice will need to be taken here.
When
1 January 2027
Collective redundancies consultation
Currently
The duty to consult collectively arises when an employer proposes twenty or more redundancies at a single establishment within a 90-day period. Collective consultation is with elected employee or trade union representatives, and the Secretary of State must be notified (HR1 form – note this has needed to be a digital form from 1 December 2025) in advance. Failure to comply with collective consultation results in protective award of up to 90 days’ full pay per affected employee (failing to notify Secretary of State is a criminal offence).
What is changing
‘One establishment’ will remain but a new (and additional) ‘threshold’ test will be introduced based on the total number of redundancies proposed across the entire business, regardless of location (e.g., 5% or 10%). Expect more small-scale redundancies to be caught. Maximum protective award to double to 180 days’ full pay per affected employee.
Impact
Risks of failing to follow collective processes increase, and possible knock-on impact on settlement levels if employees are unwilling to compromise higher-value claims for less. Planning and monitoring whole business redundancies is crucial.
When
Protective award changes, April 2026. Collective redundancy consultation thresholds, 2027.
Enforcement and employment tribunal limitation periods
Fair Work Agency
The creation of a new enforcement agency to oversee compliance with laws, including minimum wage, holiday pay, SSP and modern slavery, although its remit could be extended. Interestingly, the Fair Work Agency will have the ability to take claims against employers even if the potential claimant does not wish to pursue litigation.
When
The Fair Work Agency will be ‘created’ from April 2026; however, it will not become operational until a later date.
Extension of the limitation period to bring all employment tribunal claims
The limitation period to issue an employment tribunal claim will increase from three to six months. This will have a huge impact on how businesses manage claims and litigation strategy, on evidence and also on witnesses. As well as this change, the Government has also introduced an increase to the ACAS Early Conciliation period, from six to 12 weeks, from 1 December 2025, which could mean, once the limitation period increases, that employers will have to wait as long as 10 months, or even 12 months, before a claim is issued. Whilst a longer Early Conciliation period may seem a good idea, as it gives parties’ greater opportunity to settle claims in advance of issuing an ET1, the increase does not change the burden on ACAS, or the employment tribunal system for that matter. Another issue to think about is document retention periods and data protection policies as retention periods will probably need to be increased, for recruitment documents in particular.
When
October 2026
Trade union rights
Watch out for increased powers, changes to balloting / industrial action rules and time limits, new rights of access to workplaces by trade unions and obligations on employers to tell staff about joining a union.
Impact
The extension of trade union rights will be something for employers to watch, especially where businesses are already unionised. If a business is not currently unionised, is there an opportunity to engage with staff now through employee forums? The increasing time limit to bring employment tribunal claims will burden an already ‘creaking’ system and will impact litigation strategy.
When
Throughout 2025-2027.
Other changes to watch
- Equality action plans and tipping legislation – October 2026
- Regulation of umbrella companies – 2027
How can we help you?
The Employment Rights Act 2025 brings some of the most significant workforce changes in years. We help employers cut through the complexity, understand the risks, and take practical steps to stay compliant and commercially protected. Our support covers immediate actions, strategic planning and hands‑on guidance for HR teams and managers.
Practical steps and expert guidance
- Identify compliance gaps: We review your workforce profile, engagement models and risk areas, including zero‑hours arrangements and umbrella company engagements, and advise on where changes may be needed.
- Strengthen equality and harassment compliance: With new duties and expanded liability, we help you assess risk, update policies and deliver targeted training to meet your preventative obligations.
- Review contracts and terms: We assess whether your employment contracts offer the flexibility and protection your business needs, and guide you on making lawful, timely updates.
- Improve probation and performance processes: We help you build robust, consistent probation frameworks and train managers to manage early performance issues confidently, reducing risk under the new unfair dismissal regime.
- Update policies and handbooks: We ensure your policies reflect ERA 2025 requirements across family leave, sickness, probation, flexible working and absence management.
- Understand sickness absence impacts: We review your absence processes, costs and manager capability to help you prepare for day‑one SSP and build a compliant, sustainable framework.
- Refresh settlement agreements and NDAs: We ensure your agreements remain legally compliant, balanced and fit for purpose in light of the new legislative landscape.
- Support workforce planning and scenario testing: We help you model different workforce scenarios, assess recruitment or resourcing pressure points and identify opportunities to restructure or adapt.
- Manage implementation timelines: We work with you to build an internal roadmap, allocate responsibility and ensure ERA 2025 changes are delivered on time.
- Train your HR and management teams: Our training strengthens capability, supports compliance, and equips managers to handle new duties, workplace conversations and performance decisions with confidence.
The Employment Rights Act 2025 will reshape workforce management, risk exposure and operational costs. We will help you understand the commercial impact, prioritise action and implement changes efficiently to protect productivity and minimise disruption.
We assess workforce structures, identify compliance gaps and highlight areas where contractual, policy or process changes will reduce legal and financial risk. We will help you strengthen equality, harassment and performance frameworks, prepare for day‑one SSP costs, and ensure your probation and absence processes support sound decision‑making.
We also work with leadership teams to model workforce scenarios, pressure‑test resourcing strategies and plan implementation. Through focused training, we build manager confidence and capability, supporting better decisions, reduce litigation risk and strengthen organisational resilience.
