Employment Rights Act 2025: Complete Guide to the UK’s Biggest Employment Law Reform

Key Points

The Employment Rights Act 2025, described by the government as “the biggest upgrade to workers’ rights in a generation,” fundamentally changes the employment law landscape in the UK. If you work in this country, these changes will affect you.

This guide explains what the Act contains, when each provision comes into force, and what the changes mean in practice. Whether you’re facing a workplace issue now or want to understand your future rights, this is your comprehensive reference.

What is the Employment Rights Act 2025?

The Employment Rights Act 2025 (ERA 2025) is a major piece of legislation that amends existing employment law, primarily the Employment Rights Act 1996 and related statutes. It implements the Labour government’s “Plan to Make Work Pay” pledged before the 2024 general election.

The Act addresses what the government called “one-sided flexibility” in employment relationships. Its key aims include ending exploitative zero hours contracts, strengthening protection against unfair dismissal, improving family-related leave, restricting fire and rehire practices, and enhancing trade union rights.

The Act received Royal Assent on 18 December 2025 after a sometimes turbulent passage through Parliament. Several provisions changed significantly during debates, most notably the abandonment of day one unfair dismissal protection in favour of a six-month qualifying period.

“The Employment Rights Act 2025 represents the most significant change to UK employment law in over two decades. For employees, it shifts the balance of power back towards workers, particularly those in the early stages of employment or on insecure contracts. Employers need to prepare now for the changes ahead.”

Tom Street Principal Solicitor, Tom Street & Co.

When Does the Employment Rights Act 2025 Come Into Force?

Unlike some legislation that takes immediate effect, the ERA 2025 is being implemented in phases over two years. Many provisions require secondary legislation (additional regulations) before they can operate, and consultations on some details are still ongoing.

Here is the current implementation timeline based on the government’s roadmap:

February 2026: Trade Union and Industrial Action Changes

The first wave of changes relates to trade unions and industrial action. From 18 February 2026:

The Strikes (Minimum Service Levels) Act 2023 has been repealed. Rules requiring minimum service levels during strikes no longer apply.

Dismissal for taking part in industrial action becomes “automatically unfair.” Previously, there was a 12-week protected period; this limit has been removed.

Requirements for 50% turnout in strike ballots and additional thresholds for public sector unions are being removed (exact timing may be slightly later in February or April 2026 due to electronic balloting consultations).

April 2026: Day One Rights and the Fair Work Agency

April 2026 brings the first major changes affecting most employees:

Day one statutory sick pay: Currently, you must earn above the Lower Earnings Limit (£125 per week) and wait three days before receiving SSP. From April 2026, SSP becomes available from day one of sickness absence with no lower earnings limit. For workers below the former threshold, SSP will be payable at 80% of weekly earnings.

Day one paternity leave: Currently, you need 26 weeks’ continuous service to take paid paternity leave. This requirement is being removed.

Day one unpaid parental leave: Currently, you need one year’s service to take unpaid parental leave for children under 18. This requirement is being removed.

Paternity leave after shared parental leave: The restriction preventing you from taking paternity leave after shared parental leave is being removed, giving parents more flexibility.

Fair Work Agency launches: The Fair Work Agency (FWA) will combine existing enforcement functions including national minimum wage, employment agencies, labour exploitation, and will add holiday pay enforcement. It will have powers to investigate workplaces and issue penalties.

Protective award doubles: The maximum protective award for failure to consult in collective redundancy increases from 90 days’ pay to 180 days’ pay.

Sexual harassment as qualifying disclosure: Complaints of sexual harassment become protected disclosures under whistleblowing law, meaning workers who report harassment gain whistleblowing protections.

October 2026: Fire and Rehire, Extended Time Limits, and Harassment

October 2026 brings another significant wave of changes:

Fire and rehire restrictions: Dismissing an employee for refusing to accept changes to “restricted variations” (certain core contractual terms) becomes automatically unfair. This includes changes to pay, working hours, and job location. There is an exception where businesses face severe financial difficulty with no alternative. Changes to place of work and duties remain subject to the usual unfair dismissal test but with enhanced scrutiny.

Extended tribunal time limits: The time limit for bringing most employment tribunal claims increases from three months to six months. Combined with the extended early conciliation period of up to 12 weeks (introduced in December 2025), employees will have significantly more time to bring claims.

Third party harassment: Employers become liable for harassment of their staff by third parties such as customers, clients, or suppliers. One incident may suffice to fix the employer with liability unless they can prove they took all reasonable steps to prevent it.

Strengthened sexual harassment duty: The existing duty on employers to take “reasonable steps” to prevent sexual harassment is strengthened to require “all reasonable steps.”

Trade union access and rights: Qualifying trade unions gain the right to access workplaces physically and electronically to recruit members and facilitate collective bargaining. New duties require employers to inform workers of their right to join a trade union. Trade union representatives gain enhanced rights to facilities and time off.

Industrial action protection: Workers taking part in industrial action become protected against detriment (not just dismissal).

Tips and gratuities: Employers must consult with workers or their representatives before creating or revising tipping policies, and review these at least every three years.

2027: Unfair Dismissal, Zero Hours, and More

The final wave of major changes comes in 2027:

1 January 2027: Unfair dismissal qualifying period reduces to six months. This is perhaps the most significant change. Currently, you need two years’ continuous service to claim ordinary unfair dismissal. From 1 January 2027, this reduces to six months. Anyone employed for six months or more on that date will gain protection. The compensation cap for unfair dismissal will also be removed at this point.

2027: Zero hours contract protections (exact date TBC). Employers must make a guaranteed hours offer to zero or “low” hours workers if their actual hours over a reference period (expected to be 12 weeks) exceed the minimum in their contract. Workers gain rights to reasonable notice of shifts and compensation for short-notice cancellations.

2027: Bereavement leave. A new statutory right to unpaid bereavement leave will be introduced, including leave following pregnancy loss before 24 weeks. Details of duration and whether it will be paid are still being consulted on.

2027: Enhanced dismissal protections for pregnant workers and new mothers. Stronger protections will make it unlawful to dismiss pregnant women, mothers on maternity leave, and mothers for at least six months after they return to work, except in specific circumstances.

2027: Equality action plans become mandatory. Large employers (250+ employees) will be required to publish action plans on addressing gender pay gaps and supporting employees through menopause. These are voluntary from April 2026.

Unfair Dismissal: The Headline Changes

The changes to unfair dismissal protection are arguably the most significant in the Act. They affect more workers than any other provision.

Qualifying Period Reduces to Six Months

Currently, you need two years’ continuous employment with the same employer before you can claim ordinary unfair dismissal. This means employers can dismiss employees with less than two years’ service without giving a fair reason or following a fair process (subject to certain exceptions).

From 1 January 2027, the qualifying period reduces to six months. This change applies retrospectively, meaning anyone who has been employed for six months or more on 1 January 2027 will immediately gain unfair dismissal protection.

The original plan was for day one protection, as promised in Labour’s manifesto. This was dropped following pushback from business groups and discussions with trade unions. The six-month compromise still represents a dramatic expansion of protection compared to the current two-year requirement.

What Does This Mean in Practice?

Consider someone starting a new job in July 2026. Under current rules, they would need to work until July 2028 to gain unfair dismissal protection. Under the new rules, they gain protection in January 2027, just six months after starting.

Employers will need to rethink how they manage probationary periods and exits for newer employees. The days of being able to dismiss someone in their first two years without consequence are ending.

Compensation Cap Removed

The unfair dismissal compensatory award is currently capped at the lower of 52 weeks’ gross pay or £118,223 (the 2025/26 figure). This cap is being removed entirely.

This is a major change for high earners. Currently, someone earning £200,000 per year can only receive £118,223 compensation for unfair dismissal (the cap), even if their actual losses are much higher. Once the cap is removed, there is no statutory limit on what can be awarded.

The basic award (calculated like statutory redundancy pay) remains unchanged and will continue to be capped at £21,570 (based on 20 years’ service at £719 per week).

Discrimination and whistleblowing awards were already uncapped. The change brings unfair dismissal into line with these claims.

“For employees, the reduction in qualifying period combined with uncapped compensation fundamentally changes the risk calculation. Previously, employers could dismiss newer employees or high earners knowing exposure was limited. That safety net is being removed.”

Tom Street Principal Solicitor, Tom Street & Co.

What About Day One Rights?

Certain types of dismissal are already “automatically unfair” regardless of length of service. These include dismissal for pregnancy or maternity, whistleblowing, asserting statutory rights, trade union membership or activities, and health and safety activities.

The ERA 2025 does not change these day one protections. It also does not affect discrimination claims, which never had a qualifying period.

So if you’re dismissed on your first day because of your race, disability, or because you’re pregnant, you can bring a claim regardless of these changes. The ERA 2025 primarily affects “ordinary” unfair dismissal where the dismissal isn’t automatically unfair.

Extended Tribunal Time Limits

One of the most practically significant changes is the extension of employment tribunal time limits from three months to six months.

Current Position

Currently, for most employment tribunal claims, you must notify Acas within three months minus one day from the act complained of (usually the dismissal date or the date of the discriminatory act). The early conciliation process then pauses (“stops the clock”) for up to 12 weeks (following the December 2025 extension). After early conciliation ends, you have at least one month to submit your ET1 claim form.

This three-month primary limit catches many people out. By the time they’ve processed what happened, sought advice, and understood their options, the deadline has often passed or is imminent.

What’s Changing

From October 2026, the primary time limit for most claims extends to six months. Combined with the 12-week early conciliation period, employees will have significantly more breathing room.

For example, if you’re dismissed on 1 November 2026, your deadline to notify Acas would be around 30 April 2027 (six months minus one day). If early conciliation then lasts the full 12 weeks, your final deadline to submit your claim could extend into late July 2027.

This gives you more time to seek advice, gather evidence, and make an informed decision about whether to proceed. It also gives both parties more opportunity to settle without tribunal proceedings.

Practical Implications

Don’t assume you have unlimited time. Six months is still a deadline, and you should seek advice as soon as possible after any workplace dispute. Evidence is fresher, witnesses’ memories are clearer, and you have more options when you act early.

The extended period may also mean longer uncertainty for employers facing potential claims. Settlement discussions may take longer, and the tribunal backlog could grow as more claims are brought within the extended window.

Day One Rights: What You Can Claim Immediately

The ERA 2025 converts several employment rights into “day one” rights, meaning you don’t need any minimum service to qualify.

From April 2026

Statutory Sick Pay: Currently you need to earn above £125 per week and wait three days before receiving SSP. Both requirements are being removed. From April 2026, SSP is payable from day one of sickness absence with no earnings threshold.

Paternity Leave: Currently requires 26 weeks’ service. From April 2026, available from day one. You can also take paternity leave after shared parental leave.

Unpaid Parental Leave: Currently requires one year’s service. From April 2026, available from day one.

Already Day One Rights

These were already day one rights and remain unchanged:

The right to request flexible working (though employers must now provide clearer reasons for refusal and ensure refusal is reasonable).

Protection from discrimination under the Equality Act 2010.

Protection for whistleblowing (making protected disclosures).

National Minimum Wage entitlement.

Working Time Regulations protections (rest breaks, maximum hours, holiday).

Still Require Qualifying Service

Some rights continue to require a qualifying period:

Unfair dismissal protection: Six months from January 2027 (currently two years).

Statutory redundancy pay: Two years (unchanged).

Zero Hours Contract Protections

The ERA 2025 introduces significant new protections for workers on zero hours or “low hours” contracts, expected to take effect in 2027.

Right to Guaranteed Hours

Employers must make a guaranteed hours offer to qualifying workers after the end of each reference period (expected to be 12 weeks) if their actual hours exceed the minimum specified in their contract.

For example, if you’re on a zero hours contract but regularly work 30 hours per week over a 12-week period, your employer must offer you a contract guaranteeing those hours. You can accept or decline the offer.

Shift Notice and Cancellation Pay

Workers will have the right to reasonable notice of shifts. If a shift is cancelled, moved, or cut short at short notice, employers must compensate the worker.

This addresses the problem of workers being told not to come in at the last minute after they’ve arranged childcare, turned down other work, or incurred travel costs.

Who Does This Affect?

These protections apply to workers on zero hours contracts and those on “low hours” contracts where minimum guaranteed hours are low relative to hours actually worked. They also extend to agency workers.

The provisions include anti-avoidance measures to prevent employers from circumventing the rules by, for example, artificially breaking continuous service.

Fire and Rehire Restrictions

Fire and rehire (or “dismissal and re-engagement”) occurs when an employer dismisses employees and offers to re-employ them on different, often less favourable, terms.

What’s Changing

From October 2026, dismissing an employee for refusing to agree to a “restricted variation” to their contract becomes automatically unfair. Restricted variations include changes to:

Pay and benefits

Working hours

Job location (though this is subject to further consultation)

Changes to other terms, including place of work and duties in some contexts, remain subject to the usual unfair dismissal test. Tribunals will consider the reason for the variation, any consultation, and what the employee was offered in return.

The Financial Viability Exception

There is an exception where the employer faces extreme financial distress and has no realistic alternative. In such cases, employers must still follow the ACAS Code of Practice on Dismissal and Re-engagement.

Failure to follow the ACAS Code can result in compensation being uplifted by up to 25%.

Sexual Harassment: Strengthened Employer Duties

The ERA 2025 significantly strengthens employer obligations around sexual harassment.

All Reasonable Steps

Since October 2024, employers have been under a duty to take “reasonable steps” to prevent sexual harassment. The ERA 2025 upgrades this to “all reasonable steps.”

This higher standard means employers must demonstrate they have done everything reasonably possible, not just some things. Training, policies, reporting mechanisms, and prompt action on complaints will all be scrutinised.

Third Party Harassment Returns

Employers become liable for harassment of their employees by third parties such as customers, clients, patients, or members of the public. This protection was removed in 2013 and is now being restored.

One incident may be enough to establish liability unless the employer can prove they took all reasonable steps to prevent it.

Whistleblowing Protection for Harassment Complaints

Complaints of sexual harassment become “qualifying disclosures” under whistleblowing law. This means employees who report sexual harassment gain the protections available to whistleblowers, including protection from detriment and dismissal.

Other Significant Changes

Collective Redundancy

The maximum protective award for failure to consult in collective redundancy doubles from 90 days’ pay to 180 days’ pay per affected employee. Combined with the ACAS Code uplift of 25%, the potential exposure is now 225 days’ pay per employee.

The “at one establishment” test has been retained, but a new alternative threshold will also apply based on redundancies across the whole employing entity. Details will be set in regulations.

Non-Disclosure Agreements

Provisions in NDAs that purport to prevent workers from speaking out about harassment or discrimination (or their employer’s response) will be void. Further regulations will set out exceptions.

Bereavement Leave

A new statutory right to bereavement leave will be introduced in 2027, including leave following pregnancy loss before 24 weeks. Currently only parental bereavement leave has statutory backing.

Record-Keeping Requirements

Employers must keep records for six years demonstrating compliance with annual leave and holiday pay obligations. Failure to comply will be a criminal offence punishable by fine.

Umbrella Companies

Umbrella companies are brought within scope of the Employment Agencies Act 1973 for regulation and enforcement.

What This Means for You

If You’re Currently Facing a Workplace Issue

The extended time limits don’t take effect until October 2026. If you’re facing dismissal or discrimination now, current rules apply. You must notify Acas within three months minus one day.

However, if your issue relates to rights that are being strengthened (such as sexual harassment where you want the employer to take more action), you may be able to argue the employer should anticipate the incoming changes.

If You Have Less Than Two Years’ Service

Currently, you have limited unfair dismissal protection unless your dismissal is automatically unfair (pregnancy, whistleblowing, etc.) or discriminatory.

From 1 January 2027, anyone with six months’ service gains protection. If you’re dismissed now with, say, 18 months’ service, you’re not protected for ordinary unfair dismissal. But check whether any automatic unfair dismissal or discrimination applies.

If You’re on a Zero Hours Contract

Protections are coming but not until 2027. In the meantime, you still have rights under existing law: national minimum wage, working time regulations, protection from discrimination and whistleblowing detriment.

If You’re Experiencing Harassment

The strengthened duties come into force in October 2026, but the current duty to take reasonable steps applies now. Document everything and report through appropriate channels. If your employer fails to act, you may have claims under current law.