Summary of Employment Rights Act 2025

The Employment Rights Act 2025 received Royal Assent on December 2025. It will bring in some important changes to employment law. It remains to be seen how these changes will work in practice: some will be consulted on and many of the changes are not likely to be in force until 2027. The government has published a roadmap for change, indicating when various changes will come in. It is always possible that some of those dates could change however.

We have summarised some of the changes that may affect you and your practice.

February 2026

• From the 18 of February 2026, employees are protected from unfair dismissal for taking part in industrial action, whatever the duration of the strike action. The ’12-week cap’ on protection from unfair dismissal for taking part in industrial action is being removed
• Employees newly eligible for day one paternity leave/unpaid parental Leave may give notice by the 18 of February, enabling leave to be taken from 6 of April 2026.

April 2026

New legal duty for employers to keep records relating to annual leave

• From the 6 April 2026, employers will be legally required to keep records of workers’ annual leave and holiday pay to show compliance with The Working Time Regulations 1998. They will be obliged to keep “adequate” records and retain them for six years. Adequate records must document that:
• Workers were notified of and allowed to take their annual statutory holiday entitlement (5.6 weeks)
• Workers were correctly paid for this leave, including those on irregular hours or part-year workers
• Workers were correctly paid for accrued but untaken leave on termination of employment including any leave carried over from the previous holiday year

Records can be kept in a manner and format that the employer “reasonably thinks fit”.

See Holiday pay and leave for information about holiday pay generally.

• Moreover, a new government agency, the Fair Work Agency, is due to launch on the 7 April 2026 and will subsequently have the power to enforce this duty (though it is unclear when their enforcement powers will begin). Failure to comply will amount to a criminal offence and may result in an unlimited fine. Failure to pay holiday pay correctly (or to correctly classify workers as workers and therefore entitled to holiday pay) may also be punishable by a penalty of up to £20,000 per underpaid individual .

Changes to Statutory Sick Pay

• Statutory sick pay is currently not paid for the first three days in a qualifying period. Under the changes, this will be paid from day one of sickness, removing the three waiting days. The Lower Earnings Limit will also be removed. This will come in on the 6 of April 2026. Employers whose contracts explicitly refer to having three waiting days before statutory sick pay is paid, or to only paying it from day four, will need to change their contracts.

Paternity, parental and bereavement leave

• Paternity leave (which currently requires 26 weeks’ service) will become a day 1 right. It will also be possible to take paternity leave after taking shared parental leave. Unpaid parental leave (which currently requires a year’s service) will also become a day 1 right in April 2026. Entitlement is up to 18 weeks in total and four weeks a year. Bereaved partners’ paternity leave will enable bereaved fathers and partners to take up to 52 weeks of paternity leave if the mother or primary adopter dies within the first year of the child’s life.

Collective redundancy consultation

• The potential protective award for collective redundancies is to be increased from 90 to 180 days. This is expected to come into force on the 6 of April 2026. There will be a consultation on other potential changes to rules in this regard in 2026 to include consideration of a new threshold to trigger collective redundancy obligations, including revisiting whether the 20 or more employees need to be “at one establishment” for collective consultation obligations to kick in and to consider doubling the consultation period from 45 to 90 days
• Allegations of sexual harassment could amount to whistleblowing from the 6 of April 2026, and those employees would have the right not to be subjected to a detriment or dismissed as a result. 

October 2026

• The right to join a trade union must be included in the s1 statement of terms and conditions so this must be included in employment contracts.

Sexual harassment

• It will strengthen the employer’s duty to take reasonable steps to prevent sexual harassment by requiring the employer to take “all reasonable steps” as opposed to just “reasonable steps” to prevent it.

Protection from third party harassment

• The Bill will amend s.40A Equality Act 2010 to provide that an employer will be liable if a third party, such as a customer or client, harasses the employee in the course of their employment and the employer failed to take all reasonable steps to prevent that harassment. This applies to all types of harassment under the Equality Act (ie not just sexual) and is expected to come in in October 2026. 

Tribunal time limit increase from three to six months

• Time limits for bringing most claims in the Employment Tribunal are expected to be extended from three months to six months, subject to extensions as a result of time spent in Early Conciliation. This is expected to come in not before October 2026.

January 2027

Changes to rules about fire and re-hire

• The Act will make it automatically unfair to dismiss an employee if the reason for dismissal is that they refuse to vary their contract in respect of: pay, hours (number of and timing of), reduction in holiday entitlement or pension or to introduce new variation clauses into their contract (or if the main reason for dismissal is to enable the employer to recruit another person or re-hire the same employee on new terms)
• If, however, the employer’s business is about to collapse, and they couldn’t reasonably avoid making the contract change, they are likely to have a defence they can rely on
• Dismissal for refusals to agree to other types of changes to contracts might be fair but various factors will be considered when assessing fairness including the reason, the level of consultation and the process followed, including anything offered in return for the change. This is now expected to come into effect in January 2027.

Changes to unfair dismissal

• Reduction of two-year qualifying period for unfair dismissal to six months
• At present, an employee needs two years' continuous service in order to claim ordinary unfair dismissal. This is to be reduced to a six-month qualifying period
• The Act will also remove the existing cap on compensatory awards for unfair dismissal (which as of 6 April 2025 is either £118,223- or 52-weeks’ gross pay, whichever is the lower amount). These changes are expected to become law on 1 January 2027.

Changes which will take effect in 2027, exact dates yet to be determined

• In 2027, new regulations on preventing sexual harassment are to be introduced, including possible prohibition of non-disclosure agreements around allegations of harassment or discrimination. These changes will commence after consultation, though a commencement date is yet to be announced.

The right for zero-hour workers to request guaranteed hours if they have worked for an employer for 12 weeks

The full detail is not available yet and these rules are likely to be very complex and need consulting on. The plans are likely to include:

a) A right for a zero-hours worker to be offered guaranteed hours based on the number of hours they worked for the employer during the previous reference period (likely to be 12 weeks)
b) The right to reasonable notice of a shift
c) The right to reasonable notice of cancellation of or changes to a shift.

Flexible working

• It will become more difficult for employers to refuse flexible working requests because, as well as stating their grounds for refusing and for this to be one of the eight permitted statutory grounds, the employer will need to explain why it is reasonable to refuse the application on those grounds. This is expected to take effect in April/October 2027.

Enhanced protection for pregnant employees and new mothers

This will include extra protection against dismissal for employees on maternity leave or dismissal for reasons relating to pregnancy. The Act also contains proposals to strengthen protection for new mothers. It is not clear how these enhanced protections will work. They are expected to commence in 2027.

Gender pay gap and menopause

• The Act allows for regulations to be made for larger private sector employers (those with more than 250 employees) and some public sector ones to do more in relation to gender equality and supporting employees going through the menopause. Gender pay gap and menopause action plans could come in on a voluntary basis from April 2026 and are likely to become mandatory in 2027.

Bereavement leave

• Bereavement leave will be expanded so it no longer covers just parents and unpaid time off for this will be available from day one. The length of leave is expected to be two weeks for a child and one week for someone else.

For more information see the Employment Rights Bill: factsheets