Employment Rights Act 2025: key changes employers should prepare for

The Employment Rights Act 2025 is one of the biggest changes to UK employment law in a generation. Some changes are already in force, with further reforms being introduced throughout 2026 and 2027. For employers, this is not something to leave until the final details are confirmed. The direction of travel is clear: stronger worker protections, earlier employment rights and greater obligations on businesses.

That means HR teams, business owners and senior leaders should be reviewing contracts, policies, people processes and manager training now. Waiting could increase the risk of claims, employee relations issues and avoidable cost.

Key changes employers need to prepare for

• Statutory Sick Pay changes, including removal of the waiting period and lower earnings threshold.
• Day-one rights to paternity leave and unpaid parental leave.
• Higher financial exposure for collective redundancy failures.
• Reforms to unfair dismissal, sexual harassment duties, zero hours contracts and ‘fire and rehire’.

These are some of the common questions employers have been asking our employment law team as they prepare for the Employment Rights Act 2025, including questions raised during our recent webinar.

Is the Employment Rights Act 2025 already in force?

Yes, in part. Some measures took effect from December 2025 and April 2026, while many significant changes are still to come. Employers should create a timeline for policy updates and keep responsibilities under review.

Will employees get unfair dismissal rights from day one?

Unfair dismissal protection is expected to become available from six months’ service from 1 January 2027. Employers should tighten probation processes, document performance concerns and train managers to act promptly and fairly.

What does this mean for zero hours or casual workers?

Further reforms are expected around predictable work and guaranteed hours. Businesses using flexible staffing models should audit current arrangements and consider where regular patterns of work may create new obligations.

Do employment contracts and policies need updating?

Very likely. Sickness absence, family leave, probation, dismissal, redundancy, whistleblowing, harassment and flexible working policies may all need reviewing. Employers should avoid a piecemeal approach and plan a wider compliance review.

Will these changes increase legal risk?

Yes. Earlier rights and stronger protections mean employers will need clearer processes, better records and more consistent decision-making. The biggest risks are likely to arise where managers are not trained or where policies no longer reflect the law.

What should employers do now?

Start with a practical action plan: review your workforce model, update key policies, assess probation and dismissal processes, brief managers and identify where specialist advice is needed.

How will the changes affect dismissals due to ill health or redundancy?

Employers will need to take particular care when managing redundancy or ill-health dismissals, especially where employees have more than six months’ service. Even where statutory redundancy pay is not due, employees may have unfair dismissal rights, so employers should follow a fair process, consult properly, keep clear records and make sure decisions are reasonable. For ill-health dismissals, this also means obtaining appropriate medical or occupational health advice, considering reasonable adjustments and following a fair capability process before making any final decision.

What are the top three actions employers should take in the next three months?

Employers should:

1. Prioritise reviewing standard employment contracts and key policies, particularly around sickness absence, probation, notice, payment in lieu of notice and flexibility clauses.
2. Tighten probation processes and manager training so concerns are addressed promptly and fairly.
3. Review sexual harassment risk assessments, policies and training, and prepare for increased claims exposure as tribunal limitation periods are extended.

Could a new Prime Minister change how the remaining Employment Rights Act reforms are implemented?

While some measures may still be refined before they come into force, significant changes to the overall direction of the reforms seem unlikely at this stage. The Act reflects a clear political shift towards stronger worker protections, so employers should continue preparing on the basis that the main reforms will proceed. One area to watch is the proposed removal of the compensatory award cap, which may attract further scrutiny because it is a change which seems to favour very high earners.

If you would like to discuss how the Employment Rights Act 2025 could affect your business, or need support preparing for the changes ahead, please contact Louise Attrup or Michael Kerrigan for tailored advice.