Employment Rights Act 2025 (ERA 2025)
The Employment Rights Act 2025 (ERA 2025) is a major overhaul of UK employment law, designed to modernise and strengthen workplace rights.
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1. What Is the Employment Rights Act 2025?
The Employment Rights Act 2025 (ERA 2025) is a major overhaul of UK employment law, designed to modernise and strengthen workplace rights. It received Royal Assent in December 2025 and represents the most significant employment law reform in a generation.Ā
Most of the substantive reforms will be phased in from 2026 and 2027, with implementation delays and detailed regulations expected.Ā
2. Broad Objectives of the Act
The ERA 2025 aims to:
- Improve job security and reduce precarious work.
- Strengthen worker protections against unfair dismissal and harassment.
- Update statutory rights (e.g., sick pay, parental leave).
- Enhance fairness and equality in the workplace.
- Align UK law with modern employment practices.Ā
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A. Unfair Dismissal & Tribunal Changes
Whatās Changing
- The two-year qualifying period for unfair dismissal claims is being reduced to six months (likely effective January 2027).Ā
- The cap on compensatory awards for unfair dismissal is being removed entirely.Ā
- The time limit for bringing claims in an employment tribunal will increase from 3 months to 6 months (effective October 2026).Ā
Practical Considerations
- Update recruitment, probation and performance processes to manage risk under the lower qualifying period.
- Train managers on fair performance management and dismissal procedures.
- Review HR documentation and contracts to reflect new deadlines and claims risk.
B. Statutory Benefits & Leave Enhancements
Statutory Sick Pay (SSP)
- SSP becomes payable from day one (currently day four) (from April 2026).Ā
Parental and Bereavement Rights
- Day-one rights for paternity leave and unpaid parental leave (from April 2026).Ā
- New statutory bereavement leave for death of a family member.Ā
- New right to bereavement leave for pregnancy loss before 24 weeks.Ā
Practical Considerations
- Update leave and absence policies.
- Amend payroll and HR systems to comply with new SSP rules.
- Train HR teams on new leave entitlements and documentation.
C. Harassment, Whistleblowing & Equality Obligations
Duty to Prevent Harassment
- Employers will have a positive duty to take all reasonable steps to prevent sexual harassment, including third-party harassment in the workplace (from April 2026).Ā
Sexual Harassment and Whistleblowing
- Reports of sexual harassment will qualify as protected disclosures under whistleblowing law (from April 2026).Ā
Practical Considerations
- Review and strengthen anti-harassment policies.
- Provide enhanced workplace training.
- Review settlement and confidentiality clause templates.
D. Zero & Low Hours Contracts
Whatās Changing
- Employers must offer guaranteed hours contracts to most zero-hours and low hours workers (including agency workers), based on a reference period (likely 12 weeks).Ā
- Workers may be entitled to compensation for shifts cancelled or moved at short notice.Ā
Practical Considerations
- Audit use of zero and low hours contracts.
- Prepare systems to calculate hours and manage offers of guaranteed contracts.
E. Fire & Rehire
Whatās Changing
- Fire and rehire (dismissing and re-engaging staff on new terms) will become automatically unfair unless a strict financial difficulty exception applies (from October 2026).Ā
Practical Considerations
- Review restructuring strategies and consult early with legal advisors.
- Document financial necessity where relevant.
F. Redundancy & Collective Consultation
Whatās Changing
- Collective redundancy consultation awards will be doubled, from 90 to 180 daysā pay (from April 2026), increasing employer liability significantly if consultation obligations are not met.Ā
Practical Considerations
- Strengthen redundancy consultation processes.
- Provide extra training to HR and restructuring teams.
G. Trade Unions & Industrial Relations
Minimum service level rules for strikes removed (December 2025)
Dismissal for taking part in industrial action becomes automatically unfair (From February 2026).
Notice period for industrial action reduces from 14 to 10 days (From February 2026).
Simple majority required for strike ballots (From February 2026).
No longer a requirement for picket supervisors (From February 2026).
The Act includes reforms affecting union rights and industrial action procedures ā though many details depend on secondary legislation and forthcoming regulations.Ā
5. Practical Steps for Employers (Checklist)
Before and during implementation:
- Audit employment contracts and HR policies now.
- Update absence and leave policies.
- Train HR and line managers on new duties (harassment prevention, tribunals, redundancies).
- Review payroll systems for SSP updates.
- Engage early with regulators and respond to consultations (where relevant).
- Monitor guidance and secondary legislation closely.
6. Risks & Considerations
- Increased tribunal claims due to lowered qualifying periods and longer claim windows.
- Higher financial exposure from uncapped awards and redundancy consultation penalties.
- Greater administrative burdens from zero hours and harassment duties.
- Potential impact on workplace flexibility and operational policies.
Being proactive is key ā early preparation and policy updates are essential to minimise legal and financial risk. At Solidaire Solicitors we can provide you with advice and support, including bespoke or template staff handbooks and contracts of employment, to ensure you are compliant with the changes.
Frequently Asked Questions
The Employment Rights Act 2025 (ERA 2025) is a major reform of UK employment law designed to strengthen worker protections and modernise employment practices. It received Royal Assent in December 2025 and introduces wide-ranging changes affecting dismissal, tribunal claims, statutory pay, leave, harassment, zero-hours contracts, redundancy, and trade union rights.
The Act is being introduced in phases rather than all at once:
- Some provisions took effect from December 2025
- Many key reforms will apply from April 2026
- Further changes, including unfair dismissal and fire-and-rehire rules, will apply in October 2026 and January 2027
Employers should prepare early, as detailed regulations and guidance will continue to be published.
The qualifying period to bring an unfair dismissal claim will reduce from two years to six months (expected January 2027).
In addition, the cap on compensatory awards for unfair dismissal will be removed, and the time limit for bringing tribunal claims will increase from three months to six months (from October 2026).
Evidence includes documentation of commercial viability, compliance with regulations, and proficiency of the HR department in managing sponsorship responsibilities.
From April 2026, Statutory Sick Pay will be payable from day one of sickness, rather than day four. This increases payroll costs and requires updates to payroll systems and absence policies.
Yes. From April 2026:
- Paternity leave and unpaid parental leave become day-one rights
- A new statutory right to bereavement leave will apply for the death of a family member
Bereavement leave will also apply for pregnancy loss before 24 weeks
Employers will have a positive legal duty to take all reasonable steps to prevent sexual harassment in the workplace, including harassment by third parties (from April 2026).
Reports of sexual harassment will also qualify as protected disclosures under whistleblowing law.
Employers will be required to offer guaranteed hours contracts to most zero-hours and low-hours workers (including agency workers), based on a reference period (likely 12 weeks).
Workers may also be entitled to compensation for shifts cancelled or changed at short notice.
Fire and rehire will become automatically unfair from October 2026, unless the employer can rely on a narrow financial-difficulty exception. This significantly restricts the use of dismissal and re-engagement as a restructuring tool.
From April 2026, protective awards for failure to comply with collective redundancy consultation requirements will increase from 90 daysā pay to 180 daysā pay, substantially increasing potential employer liability.
Key changes include:
- Removal of minimum service level rules (December 2025)
- Dismissal for taking part in industrial action becomes automatically unfair (February 2026)
- Reduced notice periods for industrial action
- Lower ballot thresholds and removal of picket supervisor requirements
Many details will depend on secondary legislation.
Employers should:
- Audit contracts, policies, and handbooks
- Update sickness, leave, and harassment policies
- Train managers and HR teams
- Review payroll and scheduling systems
- Monitor secondary legislation and official guidance
Early preparation is essential to manage increased legal and financial risk.
For comprehensive assistance with Sponsorship Licence applications, Skilled Worker visas, and immigration law matters, contact Solidaire Solicitors. Our legal experts provide tailored solutions and client-focused results.
The key risks include:
- Increased tribunal claims
- Higher compensation exposure
- Greater compliance and administrative burdens
- Reduced flexibility in workforce management
Proactive planning and legal advice can significantly reduce these risks.
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