Employment Rights Act 2025 explained - what it means for employers and employees

Employment Rights Act is formally approved

The final legislative tussle in the House of Lords, involving a final amendment and a last-minute “ping-pong”, concluded when opposing peers withdrew their objection, finally paving the way for enactment.  Prime Minister Sir Keir Starmer hailed this as a “major victory for working people in every part of the country.” 

What does the Employment Rights Act mean for employers and employees

The Act introduces significant reforms, including 

• Day-one access to statutory sick pay and paternity leave
• A ban on zero-hour contracts
• Enhanced parental and bereavement leave
• And more

Crucially, employees will now gain the right to claim unfair dismissal after six months of employment, an increase from the Governments original proposal of immediate eligibility.

When will the Employment Rights Act come into force?

Most provisions will require secondary legislation before coming into force, meaning 2026 will be a busy year for the Government as it works to implement these changes. The revised unfair dismissal rules will apply from January 2027, covering employees who begin work from July 2026. The only measure taking effect immediately is the repeal of the Strikes (Minimum Service Levels) Act 2023.

Most of the measures within the Act will require secondary legislation before coming into force. Meaning 2026 will be a busy period for the Government attempting to implement the provisions, and the changes to unfair dismissal coming into effect in January 2027, with employees beginning employment from July 2026 being covered by the legislation. The only provision that has come into force immediately is the repeal of the provisions introduced by the Strikes (Minimum Service Levels) Act 2023.

Following today’s granting of Royal Assent, attention now turns to forthcoming consultations and impact assessments, particularly regarding the removal of the unfair dismissal compensation cap.

How our Employment team can help you

Whether you're an employee or employer, our specialist employment solicitors have the know-how to handle any dispute or other legal problem you encounter.  Covering Bromley, London, Kent, West Wickham and Sevenoaks, our employment solicitors do more than provide authoritative advice - they also ensure legal advice is delivered in way that is simple for clients to understand.  If you have any questions about the Employment Rights Act and what it might mean for you, please contact one of our employment team on 020 8290 0440.