Employments Rights Act 2025

The changes are being introduced gradually over 2026 and into 2027/28.  

Some key changes are coming into force as soon as the 6 April 2026 including the day one rights for employees to parental and paternity leave whilst the removal of the 3-day waiting period for statutory sick pay is expected at the same time. 

The Act’s key provisions:

Dismissal, Redundancy, Time limits and Enforcement

• Unfair Dismissal Qualification: Under current law an employee must have 2 years’ worth of qualifying service in order to bring a claim of unfair dismissal. However, under the ERA this qualifying period has been dropped to six months. This will come into effect on the 1st of January 2027.
• Removal of Compensation Cap: Under current law the compensatory award in ordinary unfair dismissal cases is capped at the lower of £118,223 or 52 weeks’ pay. The ERA will change this so there will no longer be any cap on compensatory awards.
• Fire-and-rehire Restrictions: This is a practice where an employer terminates an employee’s contract and rehires them for the same role effectively but on less favourable terms. This practice will be significantly restricted. The ERA will make it automatically unfair to dismiss an employee for refusing to accept certain changes to key terms and conditions of their employment (save in limited circumstances).
• Extension of Time limits for bringing Tribunal Claims: Time limits apply for bringing claims in the Employment Tribunal and in the main, they need to be brought within three months of the act complained of currently but this is to be extended to six months (expected in October 2026).
• Enforcement: A new public authority (the Fair Work Agency) will be set up to enforce holiday pay records, sick pay, holiday pay, bring employment tribunal proceedings on behalf of a worker, along with being extended other extensive rights.

Zero-Hour Contracts

Zero-hour contracts are for all intents and purposes a type of contract that will not be used by employers going forwards and, in any event, not in their current form.

• Guaranteed Hours: While the Government initially planned to abolish what they considered exploitative zero-hour contracts, this did not fully materialise. However, the practical effect of the ERA’s provisions is similar, as employers are now required to offer qualifying workers guaranteed hours within contracts reflecting regularly worked hours. This change aims to provide workers with greater certainty and stability in their employment arrangements.
• Reasonable Notice of Shifts: Employers must now give reasonable notice of a shift as well as in relation to the cancellation of any shift or change to a shift. Failing to do so may lead to compensation for changed or cancelled shifts. This demonstrates the Act’s intention to give “a baseline of security and predictability so workers can better plan their lives and finances.”
• Agency Workers: The Government has now extended these rights to agency workers. This ensures that agency workers receive fair treatment regarding guaranteed hours, reasonable notice and compensation for cancellations, bringing their protections in line with other flexible workers.

There will be consultation and further details to follow.

Statutory Sick Pay Reforms

• Immediate Entitlement: The ERA allows will enable statutory sick pay to be payable from day one of sickness absence, and therefore the current 3 day waiting period will be removed.
• Removal of Earnings Threshold: The ERA also removes the lower earnings limit, meaning there will no longer be a requirement for the employee’s earnings to be at least the lower earnings limit to be eligible for statutory sick pay.

This is expected to come into force in April 2026.

Family Rights including dismissal of pregnant employees

• Paternity Leave: The ERA will make paternity leave a day-one right for eligible employees. Under current law, to be eligible for paternity leave it requires 26 weeks’ service. The aim of this new provision is to align paternity leave with other family leave entitlements.
• Parental Leave: Statutory paid parental leave will also be a right from the first day of employment. Under current law, employees must complete one year of continuous service to qualify, but this requirement will be removed, ensuring immediate access to parental leave for all new hires.
• Bereavement Leave: Under current law, employees are entitled to two weeks’ parental bereavement leave following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. Under the new ERA this will be extended to encompass the loss of a wider group of individuals, including pregnancy loss prior to 24 weeks – however currently the associated leave period is proposed as one week of unpaid leave. Further regulations are awaited.
• Dismissal During Pregnancy, Maternity/Family Leave or following a return to work: The ERA gives the government powers to introduce stronger dismissal protections. An employer seeking to dismiss an employee who is pregnant, on maternity leave or an employee who has recently returned from leave will be required to follow additional procedures and provide appropriate notices and evidence. The full detail of the protections proposed is currently outstanding. The protection extends beyond the current protection offered in redundancy situations and it is envisaged that dismissals will be banned save in certain circumstances. 

Harassment Protections

• Preventing Sexual Harassment: Employers will be under a statutory duty to take all reasonable steps to prevent sexual harassment in the workplace (not just reasonable steps). This means adopting proactive measures such as implementing clear policies, providing regular training, and creating safe reporting channels to ensure a respectful and secure working environment.

• Third-party Harassment Protection: An employer will be required to prevent a third-party from harassing an employee in regard to any protected characteristic. An employer will be liable unless it took all reasonable steps to prevent harassment from occurring in the course of an employee’s employment.

  These changes are expected in October 2026.

The Employment Rights Act 2025 represents one of the most significant overhauls of UK employment law in recent years. By introducing greater job security, enhanced family rights, stronger protections against unfair dismissal and harassment, and improved conditions for flexible and agency workers, the Act aims to create a fairer and more predictable working environment. Employers should review and update their policies promptly to ensure compliance and prepare for phased implementation dates.

If you would like us to provide training on the changes coming in, to review your policies and contracts or you need assistance with any other employment related matter, please do get in touch with our Employment Team on 020 8290 0440 (Bromley) or 01732 496 496 (Sevenoaks) or employment@thackraywilliams.com.