Employment Rights Act 2025
The Employment Rights Act 2025: what your business needs to know now
If you've heard people call the Employment Rights Act 2025 "the biggest shake-up of UK employment law in a generation," that's not marketing hype — it's accurate. And unlike a lot of legislation that arrives with a single start date, this one is rolling out in stages between December 2025 and 2027. Some of it is already law. Some of it lands in the next couple of months. The rest is coming in 2027.
If you run an SME without an in-house HR team, that staggered timeline is actually good news: you don't need to overhaul everything at once. You just need to know what's changed, what's changing next, and what to check in your contracts and policies at each stage. That's what this post is for.
Already in force
A lot has changed since the Act received Royal Assent, most of it from 6 April 2026:
Statutory Sick Pay is now payable from day one of illness, not day four — and the lower earnings limit has been removed, so every employee is eligible regardless of how much they earn. If your sickness absence policy or payroll setup still assumes the old waiting days, it needs updating.
Paternity leave and ordinary parental leave became day-one rights, and the notice period for paternity leave was temporarily cut from 15 weeks to 28 days. Employees no longer have to wait for a qualifying period to take this leave, and the old restriction on taking paternity leave after shared parental leave has gone.
Whistleblowing protection was extended — reporting sexual harassment now counts as a "qualifying disclosure," meaning whistleblowers raising it are protected in the same way as those reporting other wrongdoing.
The Fair Work Agency has been established, bringing enforcement of holiday pay, statutory sick pay, and other rights under one roof. Employers must now keep annual leave and holiday pay records for at least six years — worth checking your record-keeping actually reaches back that far.
If any of these apply to your business and you haven't touched your handbook or contracts since last year, it's worth a review now rather than waiting for an audit or a tribunal claim to flag the gap.
Coming in October 2026
Two changes here matter to almost every employer:
The duty to prevent sexual harassment gets stronger. From 30 October 2026, "reasonable steps" becomes "all reasonable steps" — a higher bar — and, for the first time, employers can be held liable for harassment of their staff by third parties: customers, clients, contractors, anyone your employees deal with in the course of their work. If your policy is a few paragraphs in the handbook and nothing more, this is the moment to build it out: training, a clear reporting route, and a documented process for handling third-party incidents.
Employment tribunal time limits are extending from three months to six for most claims (1 October 2026; Scotland's breach of contract claims move to 9 November 2026). Practically, this means disputes can surface later than employers are used to — all the more reason to document decisions properly and consistently at the time, not rely on memory months down the line.
Coming in January 2027
This is the headline change everyone's been waiting for: unfair dismissal protection, currently available only after two years' service, drops to six months. The government's original plan was a day-one right; it's since settled on six months, alongside the removal of the cap on unfair dismissal compensation.
Alongside it, "fire and rehire" — dismissing someone and rehiring them on worse terms — becomes automatically unfair in most circumstances, backed by an updated statutory Code of Practice.
Six months feels like a long runway, but it isn't, if your current process still leans on "they're not past probation, so we're not exposed." From January 2027, that safety net shrinks by 18 months. Now is the time to tighten up recruitment decisions, probation reviews, and performance management, so you're not scrambling in December 2026.
Coming later in 2027 (dates still to be confirmed)
A longer list of changes is expected through 2027, pending secondary legislation:
Zero-hours and low-hours workers gain rights to guaranteed hours, reasonable notice of shifts, and compensation when shifts are cancelled or cut short
Flexible working refusals must cite one of eight approved business reasons and explain why it applies
A new statutory right to unpaid bereavement leave
Gender pay gap and menopause action plans become mandatory for employers with 250+ staff
Strengthened dismissal protections for pregnant employees and new mothers
NDAs that silence people who've experienced workplace harassment or discrimination become unenforceable
None of these are locked in yet, but they're worth having on your radar so they don't catch you off guard.
What to actually do about it
You don't need to rewrite every policy this week. A sensible order of priority:
Check your sick pay and paternity/parental leave policies and payroll setup reflect what's already in force
Build out your anti-harassment policy and training ahead of the October 2026 deadline, including a plan for third-party harassment
Review your record-keeping to make sure six years of holiday pay data is actually retrievable
Start tightening recruitment, probation, and performance management processes now, so you're ready well before the January 2027 unfair dismissal change
Keep an eye on the 2027 consultations, particularly if you use zero-hours contracts or flexible working refusals regularly
If you'd rather not track every consultation and commencement date yourself, that's exactly what we're here for — get in touch and we'll make sure your contracts, handbook, and policies keep pace as each stage of the Act lands.
This article reflects the implementation timeline as understood at the time of writing (August 2026). Several 2027 changes remain subject to consultation and secondary legislation, so dates may shift — we'll keep this updated as the government confirms them.