Employment Rights Act 2025

Previously, employees were required to have two years’ continuous service before gaining the right not to be unfairly dismissed. While the Government initially committed to making unfair dismissal a ‘day one’ right, parliamentary compromise has reduced the qualifying period to six months.

This change is expected to come into effect from 1 January 2027.

The practice of dismissing employees and offering to re-hire on new, less favourable terms will be slightly restricted under the Act.

Save in circumstances where an employer is facing serious financial difficulty, it will be automatically unfair to dismiss an employee for refusing to agree to certain contractual changes, even where the employer offers to re-hire them under the new terms. 

Employers will also be prevented from dismissing employees and replacing them with contractors, agency workers, or other non-employees to carry out the same work.

These changes were originally expected to come into effect in October 2026, but will now not come into force until January 2027.

While zero-hours contracts will not be banned, employers will be required to offer guaranteed hours in certain circumstances. 

The Act also introduces new rules requiring fair notice of shift changes and cancellations. This will have a significant impact on sectors such as hospitality and retail, which traditionally rely on zero-hours and variable contracts.

These changes are expected to come into effect in 2027.

Employers only be able to refuse a flexible working request where it is reasonable for them to do so. Where a request is refused, employers must clearly set out the grounds for refusal.

These changes are expected to come into effect in 2027.

Employers will have to inform workers of their right to join a trade union, and unions will gain new rights of access to workplaces. These measures will take effect from October 2026.

Further reforms are still under discussion, but unions are pressing for a reduction in the membership threshold required for statutory recognition, from the current 10% to 2% of workers in a proposed bargaining unit. The outcome of this proposal remains to be seen.

Additionally, the requirement for 50% of union members to participate in a strike ballot will be removed, making it easier to call industrial action.

These changes are expected to take effect in 2027.

Paternity leave and unpaid parental leave will become ‘day one’ rights under the Act. 

The Lower Earnings Limit for Statutory Sick Pay and the requirement to serve three unpaid ‘waiting’ days before qualifying for Statutory Sick Pay will also be removed.

These changes are set to apply from 6 April 2026.

Further reforms are expected, including enhanced protections for employees returning from maternity leave and the introduction of a new right to bereavement leave, which includes pregnancy loss before 24 weeks. 

These changes are subject to consultation on and are expected to take effect in 2027.

Where an employer fails to properly inform and consult on collective redundancies involving 20 or more employees, the maximum protective award will increase from 90 days’ gross pay to 180 days’ gross pay. 

This change is expected to come into effect on 6 April 2026.

Additionally, the current requirement to consult where 20 or more redundancies are proposed at a single establishment will be replaced with a new test. This will likely involve counting employees across the employer’s entire organisation and may be based on a percentage threshold. 

Further details are expected by 2027.

From 2027, employers with 250 or more staff will be required to publish an equality action plan, setting out steps to address the gender pay gap and to support employees experiencing menopause.

Workers will also gain new rights to bring claims against their employer where they are harassed by a third party in the course of their employment, if the employer has failed to take all reasonable steps to prevent such conduct. The duty to prevent sexual harassment will also require employers to take reasonable preventative steps from October 2026.

Employers will be unable to use confidentiality clauses to prevent individuals from making allegations or disclosures relating to harassment or discrimination. Such disclosures will be protected as whistleblowing.

A timetable has not yet been set for these changes, but further detail is expected in 2027.

The Employment Rights Act 2025 signals a clear shift towards enhanced employee protections and will have far‑reaching implications for how employers manage employee relations and workforce planning. 

While many of the reforms will be implemented on a phased basis, employers must not delay in preparing for the new legal landscape. Reviewing contracts, policies and internal practices will be key to meeting the higher thresholds introduced by the Act, minimising legal risk and ensuring ongoing compliance as the changes take effect.

For more detailed advice on what the changes mean for you, please contact a member of our employment team.