Understand what’s coming, what’s changing for your workforce, and what employers need to do now to stay compliant and protected.
The Employment Rights Act 2025 is now law. While much of the commentary around it has been noisy, political and often misleading, the reality for employers is far more straightforward. This is the most significant reform to UK employment law in a generation, and it is being rolled out in stages between 2026 and 2027.
For employers, this is not a moment for panic. It is a moment for preparation. The organisations that will struggle are not those affected by the changes, but those that delay understanding them.
This article sets out what is changing, when it is changing, and what employers should be doing now to stay compliant and protected.
What Is the Employment Rights Act 2025?
The Employment Rights Act 2025 updates the Employment Rights Act 1996, the core piece of legislation that governs unfair dismissal, sickness absence, family leave, flexible working and many other fundamental employment rights.
Until now, much of this framework had remained largely unchanged for nearly 30 years. The 2025 Act modernises those rules, shifting the balance towards earlier employee protection while placing greater emphasis on fair process, consistency and documentation.
Importantly, these changes are being phased in. Employers have time, but only if they use it.
Key Changes Employers Need to Understand
1. Statutory Sick Pay: Day One Entitlement (From April 2026)
From April 2026:
- Statutory Sick Pay (SSP) becomes a day one right
- The current three-day waiting period is removed
- The lower earnings threshold is abolished
This means employees — including part-time, lower-paid and zero-hours workers — will be entitled to SSP from their first day of sickness absence.
What this means for employers:
SSP costs are likely to increase, and absence management will require greater consistency. Employers should review trigger points, return-to-work processes and record-keeping now.
2. Paternity and Parental Leave: Day One Rights (From April 2026)
Paternity leave and unpaid parental leave will become day one employment rights.
However, statutory pay is not aligned with this change. Employees will still need sufficient qualifying service to receive statutory paternity pay.
What this means for employers:
Policies must clearly distinguish between entitlement to leave and entitlement to pay. Recruitment and onboarding conversations will need to be handled carefully and lawfully.
3. Sexual Harassment: ‘All Reasonable Steps’ Duty (From October 2026)
Employers will be required to take all reasonable steps — not just reasonable steps — to prevent sexual harassment at work, including harassment by third parties such as customers, clients and site visitors.
This includes:
- Risk assessments
- Training and refresher training
- Clear reporting routes
- Evidence of consultation and monitoring
What this means for employers:
A policy alone will not be enough. Employers must be able to demonstrate ongoing, active prevention measures.
4. Unfair Dismissal: Qualifying Period Reduced to Six Months (From January 2027)
From January 2027:
- The qualifying period to claim unfair dismissal reduces from two years to six months
- Compensation for unfair dismissal becomes uncapped
Earlier proposals for day-one unfair dismissal rights were dropped, but this is still a substantial shift.
What this means for employers:
The informal “probation safety net” many employers rely on will effectively disappear. Fair process, investigation and documentation will be required much earlier in employment.
5. Flexible Working: Higher Evidential Burden (2026–27)
Flexible working remains a day-one right, but employers will be required to:
- Consult meaningfully
- Evidence decision-making
- Demonstrate the impact on teams and service delivery
Refusing a request without proper consultation will carry increased risk.
6. Zero-Hours and Irregular Workers: Guaranteed Hours and Shift Protection
Key changes include:
- A right to guaranteed hours based on a 12-week reference period
- Compensation where shifts are cancelled or changed at short notice
What this means for employers:
Time recording, payroll alignment and contractual terms must be reviewed to avoid inadvertent breaches.
What Isn’t Changing
Despite some headlines, several things remain true:
- Employers can still manage poor performance and misconduct
- Redundancy processes are not fundamentally altered
- Claims must still be proven
- Tribunals will continue to assess reasonableness
- There is no requirement for mass dismissals or rushed decisions
Good employers doing the right things properly will continue to be protected.
What Employers Should Be Doing Now
This is the key point: waiting until 2027 is too late.
Employers should be acting now to:
Review and Update Policies
- Sickness absence
- Family leave
- Flexible working
- Disciplinary and capability procedures
Strengthen Early-Stage Management
- Clear probation and onboarding processes
- Early performance management
- Consistent documentation
Train Line Managers
- Handling absence and capability
- Managing flexible working requests
- Conducting fair investigations
Check Contracts and Payroll Alignment
- SSP provisions
- Variable hours
- Notice periods and service calculations