The Employment Rights Act 2025 introduces one of the most significant updates to UK workplace law in a generation and affects almost every employer, regardless of size.
With major provisions already in force and further changes scheduled for October 2026 and 2027, the reforms affect contracts, policies, payroll, day-to-day management and the potential cost of employment disputes.
This guide explains which changes are already in force, what is coming next and the decisions HR, Legal and Finance should prioritise.
Where your business is planning a restructure, contractual change or sensitive dismissal, or is unsure how the timetable applies, early advice can help avoid expensive corrections later. If you're unsure how these changes will affect your organisation or want help reviewing your HR policies, our employment law solicitors are here to support you.
Contents:
What has already changed?
The Act strengthens worker protections, modernises enforcement and changes parts of the industrial-relations framework.
The main April 2026 reforms are now in force. Employers should have updated sickness and family-leave arrangements, reviewed collective-redundancy governance and considered whether their employment records are ready for greater regulatory scrutiny.
The Fair Work Agency is also operational. It can investigate employers, require corrective action and use enforcement powers within its statutory remit. Its current responsibilities include National Minimum Wage enforcement, employment agencies, labour-provider licensing, serious labour exploitation and enforcement of unpaid tribunal and Acas awards.
Key dates and what changes when
April 2026: major reforms now in force
Statutory Sick Pay
Statutory Sick Pay is payable from the first qualifying day of sickness rather than after a three-day waiting period. The lower earnings limit has also been removed, bringing more lower-paid and part-time employees within the scheme.
Employers should confirm that payroll systems, sickness policies and manager guidance reflect the new rules and correctly apply the statutory rate or earnings-based cap.
Family leave as a day-one right
Paternity leave and unpaid parental leave are available as day-one rights for eligible employees. Paternity leave may also be taken after a period of shared parental leave.
Contracts, handbooks and intranet guidance should no longer contain superseded qualifying periods. Managers should understand the eligibility and notification rules before dealing with requests.
Collective redundancy
The maximum protective award for failures in collective-redundancy consultation has doubled, increasing the financial exposure where information and consultation obligations are not handled properly.
Businesses contemplating larger restructures should allow sufficient time for planning, employee-representative arrangements, meaningful consultation and senior sign-off.
Whistleblowing and sexual harassment
A disclosure concerning sexual harassment can qualify for protection under whistleblowing law. Workers who raise concerns may therefore have protection against detriment or dismissal.
Whistleblowing and harassment reporting routes should work together, and managers should understand the additional risk created by retaliation or mishandling of a complaint.
Fair Work Agency
The Fair Work Agency is now operational. Employers should identify the areas of their business that fall within its enforcement remit and confirm that responsibility for record-keeping, responding to enquiries and correcting underpayments is clearly allocated.
Trade union changes during 2026
A number of trade union and industrial-action reforms began taking effect during 2026, following the repeal of the Strikes (Minimum Service Levels) Act 2023 and changes to parts of the Trade Union Act 2016.
Further provisions relating to recognition, workplace access, ballots and industrial action may depend on commencement regulations and secondary legislation. Employers with recognised unions, active employee forums or a material industrial-relations risk should check the current position before responding to a request or dispute.
October 2026: further workplace protections
Preventing harassment, including by third parties
Employers are due to be required to take all reasonable steps to prevent sexual harassment.
Further provisions address harassment by third parties such as customers, suppliers, contractors and visitors. This will be particularly relevant to businesses with public-facing teams, events, shared workplaces or employees who regularly work at client sites.
Employers should review workplace risk assessments, reporting routes, training and contractual arrangements with relevant suppliers and venues. The focus should be on proportionate measures based on the risks employees actually encounter.
Employment tribunal time limits
The time limit for bringing most employment tribunal claims is scheduled to increase from three to six months.
Longer claim periods increase the importance of preserving documents, retaining relevant emails and recording the reasoning behind employment decisions. Employers should also consider whether their retention practices allow evidence to be located several months after an employee has left.
What is planned for 2027?
Unfair dismissal
From 1 January 2027, the qualifying period for an ordinary unfair dismissal claim will reduce from two years to six months.
Employees who started on or before 1 July 2026 may therefore have acquired the required six months’ service when the new rules begin. Employees will also gain the right to request written reasons for dismissal after six months’ service, and the existing cap on unfair dismissal compensation is due to be removed.
Employers should review probation, performance, conduct and attendance processes during 2026. The priority is not simply to shorten probation periods, but to ensure that concerns are identified, documented and addressed fairly while decisions can still be taken within the relevant timeframe.
Fire-and-rehire restrictions
Significant restrictions on dismissing employees and offering re-engagement on different terms are expected from 1 January 2027.
Businesses planning contractual changes should build in time for early information, meaningful consultation, consideration of alternatives and appropriate approval. Advice is particularly important where the change affects a large group, employee relations are sensitive or the commercial timetable is compressed.
Zero-hours and insecure work
Further regulation of zero-hours and low-hours arrangements is expected during 2027, including greater predictability of hours and protections relating to shifts.
Important detail will continue to come through regulations and guidance. Employers do not need to abandon flexible arrangements automatically, but should understand where their operating model depends heavily on one-sided flexibility or repeated short-notice changes.
Other developing measures
Further provisions relating to bereavement leave, equality action plans and workplace transparency will depend on regulations, consultation outcomes or supporting guidance.
Employers should maintain a watching brief rather than making assumptions based on early proposals.
Board and budget implications
The financial effect will vary significantly between organisations.
Businesses with high absence levels, substantial numbers of low-paid or variable-hours workers, planned restructures, highly paid employees or significant use of flexible staffing are likely to face greater exposure.
For board and budget purposes, employers should assess their own workforce data rather than relying only on national cost estimates. Relevant information may include absence patterns, employee turnover, numbers within their first two years of service, use of zero-hours arrangements, forthcoming restructures and the value of potential senior exits.
What should employers prioritise now?
1. Confirm that the April reforms are embedded
Check that payroll, sickness arrangements, family-leave documents and collective-redundancy governance reflect the rules now in force.
The aim is to identify gaps between the written policy, the payroll system and what managers are doing in practice.
2. Prepare for October 2026
Complete a proportionate harassment risk assessment, focusing on the environments in which employees interact with customers, suppliers, contractors and members of the public.
Review training, reporting routes and evidence-retention arrangements before the new duties and longer tribunal time limits take effect.
3. Review probation and early-service management
Identify employees who will have six months’ service by 1 January 2027 and review how performance, conduct and attendance concerns are handled during early service.
Managers should receive practical guidance on documenting expectations, giving feedback and escalating concerns promptly.
4. Review planned workforce changes
Assess whether any restructure, contractual change or staffing-model review planned for late 2026 or 2027 may be affected by the fire-and-rehire or zero-hours provisions.
Build consultation and legal review into the project plan rather than treating them as final-stage checks.
5. Establish governance and evidence
Assign a senior sponsor and clear owners across HR, Finance, payroll and Legal.
Maintain a rolling implementation plan recording the provision, expected commencement date, business impact, owner, required decision and evidence of completion. This creates a board-ready overview without requiring leadership to manage every technical detail.
When should employers seek legal advice?
Legal input is particularly valuable where the business is planning a restructure, collective redundancy exercise, dismissal of a senior or highly paid employee, contractual change programme or response to serious harassment or whistleblowing allegations.
Advice should also be considered where the timetable is compressed, employee relations are sensitive, multiple jurisdictions are involved or the relevant commencement regulations and guidance are still developing.
October 2026 is expected to bring stronger harassment-prevention obligations and longer employment tribunal claim periods. From January 2027, employers will need to manage the six-month unfair dismissal threshold, uncapped compensation exposure and restrictions on fire and rehire. Further regulation of zero-hours and insecure work will follow.
A rolling plan owned by HR, Legal and Finance will help the business manage compliance, cost and workforce risk without unnecessarily slowing operational decisions or growth.
If you would like a second pair of eyes on your policies, workforce-change plans or board implementation roadmap, our employment law solicitors can help.
