HR & Employment Law

The Employment Rights Act 2025: what's actually changing, and when

Last reviewed: August 2026

The Employment Rights Act 2025 got Royal Assent on 18 December 2025, and it's the biggest change to UK employment law in a generation. If you've seen the headlines and switched off because it sounded like something for big corporates with dedicated legal teams, it's worth a second look - a lot of it applies to you regardless of size.

Here's the useful bit: none of it landed all at once. It's being phased in through 2026 and 2027, which means you've got a real window to prepare rather than a single deadline to panic about.

What's already changed (April 2026)

Statutory Sick Pay is now a day-one right. The old three-day waiting period is gone - SSP is now payable from the first day of sickness absence, not the fourth. The lower earnings limit has also been removed, so even your lowest earners are covered (at 80% of average weekly earnings or the flat rate, whichever is lower).

Paternity leave and unpaid parental leave are now day-one rights too - employees can give notice to take them from their very first day of employment, rather than needing a qualifying period first.

What's coming later in 2026

Fire and rehire is being banned in most circumstances. From October 2026, dismissing someone specifically to re-engage them on worse terms becomes automatically unfair dismissal, with only narrow exceptions.

The duty to prevent sexual harassment is getting stronger. Employers will need to take "all reasonable steps" to prevent harassment of their staff - including by third parties like customers or clients - not just "reasonable steps" as before. If you don't currently have a harassment policy, this is the moment to get one.

Collective redundancy penalties are doubling. If you're making 20 or more people redundant at one site within 90 days and don't consult properly, the maximum protective award per employee is rising from 90 days' pay to 180 days'.

What's coming in 2027

The unfair dismissal qualifying period is dropping from two years to six months. This was originally floated as a "day one" right - it's since been softened to six months, expected from January 2027. Either way, it's a significant drop from where things stand now, and it means getting your disciplinary and dismissal processes right matters for far more of your team, far sooner into their employment.

The cap on unfair dismissal compensation is being removed entirely from January 2027. Right now there's a ceiling (currently £123,543). Once that's gone, a poorly handled dismissal carries genuinely unlimited financial exposure.

What to actually do about it

Worth knowing: implementation dates for the 2027 changes are still subject to secondary legislation, so exact timing can shift. Treat the direction of travel as certain and the exact dates as "roughly."

This is general guidance, not advice tailored to your specific situation. Employment law is genuinely fact-specific - if you want to talk through what this actually means for your business, get in touch.

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