Employment Rights Act 2025

The Employment Rights Act 2025 brings far-reaching change for employers, with new obligations that will shape everyday people management for years to come.

We know that staying on top of legal reform alongside the day job can feel overwhelming, which is why we have created this document – to provide clear, supportive guidance that helps you understand what is changing, prioritise what matters and take control of changes in a way that feels achievable.

Employment-Rights-Act-Timeline-March-2026

1.1. Currently, employees need two years’ continuous service to bring a claim of ordinary unfair dismissal.  After two years’ service, an employee can still be dismissed but only if a fair reason (capability, conduct, illegality, redundancy or some other substantial reason) has been relied upon and a fair procedure has been followed.

1.2. With effect from 1 January 2027, the two-year period will reduce to just six months.  At the same time, the existing cap on compensation for unfair dismissal, which up until 5 April 2026 (the cap increases every 6 April), is the lower of either £118,223 or 52 weeks’ gross pay, will be removed.

1.3. The changes mean that, any employee who has six months service on 1 January 2027 will be eligible to bring a claim of unfair dismissal. We therefore recommend that employers review their recruitment and probationary processes, perhaps reviewing employees at 3 and 5 months so ensure that decisions regarding an employee’s continued employment are made and communicated to the employee in good time prior to the employee acquiring 6 months’ service.

1.4. Another change is that an employee who is dismissed because they did not disclose a spent conviction or because their employer becomes aware of their spent conviction is no longer required to have any service to bring an unfair dismissal claim on this ground.

2.1. Although Labour’s manifesto talked about the right to work flexibly being a day one right, that has not translated into the Employment Rights Act.

2.2. It still remains a day one right to request flexible working. What will change is the inclusion of reasonableness into the decision of employers to refuse a flexible working request. An employer will have to explain the grounds for any refusal and why that refusal is reasonable.

2.3. Draft regulations are expected with the right not coming into force until 2027 at the earliest.

3.1. A new duty on employers to take reasonable steps to prevent sexual harassment at work came into force from 26 October 2024. Employers who fail to take reasonable steps could be subject to a 25% uplift of the compensation award in a Tribunal where evidence demonstrates that specific action was required to prevent harassment.  This duty requires employers to prevent the harassment of employees by third parties where this occurs during the course off their employment.

3.2. The Employment Rights Act does three things:

• Firstly, it extends this duty to require employers to proactively prevent all types of harassment due to a protected characteristic (age, disability, gender reassignment, race, religion or belief, sex and sexual orientation) including harassment by third parties
• Secondly, it requires employers to take ‘all’ reasonable steps to prevent harassment
• Thirdly, it specifically gives a Minister of the Crown to make regulations specifying what steps an employer should take to prevent harassment.

3.3. Regulations will be published to specify what those steps might be – for example, publishing sexual harassment policies, training of staff to recognise and report sexual harassment, and risk assessments to help minimise any risk of sexual harassment.

3.4. The duty to prevent third party harassment and the duty to take ‘all reasonable steps’ are both expected to come into force in October 2026.  Further consultation is required before the regulations which will define ‘reasonable steps’ are published so they are expected in 2027/2028.

3.5. Employers should, if they haven’t already, take steps to ensure that they are compliant with the current duty to prevent sexual harassment and reproduce those steps to ensure that harassment due to a protected characteristic have been covered.  We would expect reasonable steps to include undertaking risk assessments, training staff on how to identify and internally report harassment, ensuring that your reporting procedures are robust and updating your policies.

3.6. Please be aware that a report of sexual harassment will be treated as a public interest disclosure (see whistleblowing in relation to sexual harassment below).

4.1. Disclosure of sexual harassment is already covered by the existing protection of disclosures showing breach of a legal obligation under whistleblowing legislation, and disclosures of this nature arguably already amount to a protected act under S.27 of the Equality Act 2010. However, the Employment Rights Act will amend s.43B of the Employment Rights Act 1996 to add sexual harassment as a separate category for the purposes of whistleblowing from the 6^th April 2026.

5.1 This Act received Royal Assent on 18 September 2023 and gave workers the right to apply for a change to their terms and conditions of employment with the purpose of obtaining a more predictable working pattern. Note that this was not the right to a more predictable working pattern itself; just the right to request one. The government expressed concerns that this was not robust enough and did not give workers sufficient security in their employment.

5.2. This Act has already been scrapped as part of the Bill. Instead, the government will introduce the right for workers to have a contract which is reflective of their actual working pattern which reflects the government’s intention to give employees more certainty about their hours and times of employment. However, importantly, individuals who are offered guaranteed hours will be able to remain on zero hours contracts if they wish.

6.1. The government’s manifesto promised to end “exploitative” zero hours contracts, but the Employment Rights Act 2025 (“the Act”) doesn’t go quite this far. There is no definition of what “exploitative” might be however the scope for an employer to offer a contract with no defined hours is more or less removed. Zero hours contractors can still be issued initially to workers. However employers must now offer a guaranteed hours contract, that matches the number of hours worked, over a reference period of 12 weeks.

6.2. The measures in the Act are complex, detailed and cover the right to guaranteed hours, the right to reasonable notice of shifts and shift changes.

6.3. We’ve summarised the key points in tabs 7 & 8 below.

7.1. Employers will be required to offer an eligible worker a minimum hours contract, which will be based on the previous working patterns of the worker, known as the “reference period”.  This offer has to be made after the end of each ‘reference period’ for the duration of any qualifying contract.  This right will apply to workers who either

7.1.1. Work under a zero hours contract or “arrangement” or

7.1.2. Work under a contract for a low number (to be determined) of minimum guaranteed hours but work more than those hours in the reference period (see below).

7.2. Employers will have to offer workers guaranteed hours, and the hours must reflect the pattern of days and times of working hours within the reference period. The reference period itself will be set by secondary legislation but as the government’s current guidance states it is expected to be 12 weeks.

7.3. To qualify, a worker does not need to have been employed without a break through the reference period and can have more than one contract during the reference period.

7.4. Workers are free to reject an offer of guaranteed hours and remain on a zero hours contract if they want to do so and remain engaged on their current terms.  If the worker accepts the guaranteed hours contract then it appears that the guaranteed hours will commence the next day. The worker has a ‘response period’ in which to reply to agree or otherwise, which begins with the day after the day on which the offer is made, and ends with the specified day which will be set out in regulations.

7.5. Agency workers are often employed on zero hours contracts.  The Act requires hirer to offer guaranteed hours but allows for other intermediaries to have similar obligation in certain circumstances. However, the definition of “excluded worker” will be provided in subsequent regulations.

7.6. Whilst employers will be required to offer the minimum hours contract, and to give workers information on their rights, workers will have a right to refuse and will have the opportunity to remain on their current arrangement if they prefer.

7.7. The are no express exceptions to the legislation for seasonal workers, despite concerns being raised during the Act’s passage through parliament. However, some definitions will be specified in regulations yet to be made.

7.8. Employers are not able to use the opportunity to change any other terms of the contract, the Act explicitly prevents this.

7.9. It will be automatically unfair to dismiss an employee if the reason is related to guaranteed hours e.g. the employee accepted or reject a guaranteed hours offer, believed that they were entitled to such an offer or brought related proceedings.

7.10. The government intends to consult on the measures, and is to set out further details in regulations. Timescales are uncertain, and there are a good number of questions still outstanding, such as the definition of “low hours”, what the response times are, the exceptions to the rule and what the compensation would be at tribunal.

Considerations for employers

7.10. If all employees qualifying for a guaranteed minimum hours contract accept the offer, the employer could find themselves overstaffed at periods of low demand.

7.11. Failure to comply with the new requirements could result in the employee making a claim to the Employment Tribunal.

7.12. For our HR Protect clients, we recommend you contact your usual adviser for guidance on managing contracts where there are fluctuating work levels.

8.1. An employer will have to provide reasonable notice of shifts, including the time, day and number of hours to be worked. This will happen in 2027.

Changing Shifts

8.1.2. Further to this, employers will have to pay workers if they cancel, move or curtail an agreed shift with insufficient notice. What counts as ‘reasonable’, and ‘short notice’, will be consulted on ahead of being included in secondary legislation. An equivalent provision is proposed in relation to agency workers. This will happen in 2027.

9.1. All tips, gratuities and service charges must be passed on to workers. Currently an employer must have a written policy to demonstrate how tips are allocated to staff but if the policy is clear on how typs etc are allocated then employers are only ‘encouraged’ to consult staff on the allocation

9.2. The Employment Rights Act will bring in a requirement to consult with recognised trade union representatives, elected representatives or, if none, staff about the policy of allocation and then publish the results of that consultation. These provisions complement the provisions of the Tips Act 2023 which came into effect in October 2024, requiring employers to distribute tips fairly and transparently across the workforce.

9.3. It will be compulsory to review the policies and consult with staff every 3 years, including a requirement to produce an anonymised summary of the views obtained in the consultation process. Failure to consult will allow workers to present a complaint to an employment tribunal and receive compensation of up to £5,000 per worker.

9.4. These changes are expected to come into effect in October 2026 following consultation which is due to end on 1 April 2026.

10.1. Bereavement Leave

10.1.1. Bereavement leave at present is limited to parents of a deceased child, who are entitled to take two weeks of paid leave. This also applies to a still born baby that has passed away up to 24 weeks before its expected birth date.

10.1.2. The Employment Rights Act removes the requirement that only parents are eligible for bereavement leave. The minimum period of leave will be one week, and a bereaved person will be entitled to leave in respect of each person who has died (if more than one). Where the person who has died is a child, the minimum period of leave remains at two weeks. Bereavement leave will be unpaid, except where a child under 18 has died, in which case statutory parental bereavement pay continues to be payable.

10.1.3. At present it is left rather vague as to what the relationship with the deceased person should be for an individual to qualify for this bereavement leave. Further regulations are to due be published in due course to help clarify this issue.

10.1.4. Furthermore, the Employment Rights Act will also ensure that from day one, all employees will be eligible for bereavement leave and there is no minimum qualifying period. This will happen in 2027 and further details will be disclosed in due course.

10.2. Parental Leave

10.2.1. Under current legislation, an employee must have been in their current place of employment for a minimum of one year before they may take any unpaid parental leave. Once eligible, an employee then is entitled to 18 weeks of unpaid leave in total. Whilst this cannot be taken all at once, with parental leave capped at 4 weeks per year, parents are free to utilise their allowance of leave at any time right up until their child’s 18th birthday.

10.2.2. The Employment Rights Act removes the qualifying period for parental leave. Parental leave will therefore be a right available to all from day one, from the 6^th April 2026.

10.3. Enhanced Protection for pregnancy and new mothers and other statutory family leave

10.3.1. The law currently provides protection from dismissal by reason of redundancy for a period of 18 months from the birth of a child.

10.3.2. The Employment Rights Act bans all forms of dismissal during pregnancy, maternity leave or during a six month period after returning from maternity leave apart from in specific circumstances. Further details are expected but this will not happen before 2027.

10.3.3. It is also proposed that regulations will be introduced to cover other forms of statutory family leave such as adoption leave and shared parental leave.

10.4. Paternity Leave

10.4.1. The Employment Rights Act strengthens the rights of new fathers. Under previous legislation, there was a minimum qualifying period before an employee is entitled to two weeks of paid paternity leave. An individual therefore had to have been with their employer for at least twenty-six weeks before they were permitted to take any paternity leave.

10.4.2. The Employment Rights Act however abolishes the twenty-six week minimum period. Therefore, as with parental leave, employees will have a statutory right to paternity leave from the beginning of their employment. This comes into force on 6^th April 2026.

10.5. We recommend that you review your policies. Whilst no timeframes have been confirmed yet, it will be important to stay ahead of the curve to ensure that you are prepared for when this legislation comes into force.

10.6. For our HR Protect clients, we will do the hard work for you. Just ask your usual adviser and they will provide you with an up to date policy.

11.1. The Employment Rights Act limits the practice of “fire and rehire” i.e. the practice of firing an employee who refuses to accept an amended contract and then offering to hire them on the new terms. It will become an automatically unfair reason to dismiss an employee if the reason is the employer sought to vary the employee’s contract of employment which sought to make a “restricted variation” (i.e. a change to pay, pension, hours, shift duration or timing, time-off and the addition of a clause which seek to make any such changes without the employee’s agreement – the Secretary of State can add to the definition) and

11.1.1. the employee did not agree to the change; or

11.1.2. the employer dismisses the employee in order to employ someone else or to re-engage the employee under a varied contract of employment on substantially the same duties as before.

11.2. There will be exceptions, including where:

11.2.1. the proposed contractual variation removes or significantly reduces any financial difficulties of the employer which were likely to affect their viability; and

11.2.2. the employer could not reasonably have avoided the need to make the variation.

11.3. If the employer can show that the exceptions apply, the tribunal will consider whether the dismissal was fair in the circumstances. If the change does not include a “restricted variation”, then the dismissal will not be automatically unfair but could still be ordinarily unfair.

11.4. It is going to be extremely difficult for employers to force through any changes to key terms and conditions where the employees will not agree to them. It is only going to be possible in extreme circumstances where the employer is at risk of collapse.

11.5. These changes are expected to come into force in January 2027 following consultation which is due to close on 1 April 2026.

12.1. Statutory sick pay will be payable from day one of sickness, rather than on and from day four as at present. This will happen on the 6^th April 2026.

12.2. The Employment Rights Act amends the rate paid by an employer to remove the lower earnings limit, making statutory sick pay available to all qualifying workers. Instead there will be a prescribed percentage of 80% of employee’s weekly earnings, or a minimum of £123.25, whichever is the lower. This figure will change each April as the government regularly does with other applicable employment rates such as the weekly cap on redundancy pay.

13.1. The time limit to bring almost all claims in an employment tribunal will be extended from three to six months.

13.2. Claims which already operate outside of the standard 3-month time limit, such as equal pay and redundancy, will remain the same.  The increase does not apply to breach of contract claims arising or outstanding on termination of employment where the time limit remains three months less one day from the effective date of termination plus any extension from ACAS conciliation.

13.3 The change is expected to take effect “no earlier” than October 2026.

14.1. The Government has announced that it will introduce a new requirement for employers with 250 or more employees to develop and publish an ‘action plan’ showing steps that they are taking in relation to their employees with regard to gender equality. This will include addressing the gender pay gap and supporting employees going through the menopause. The plans must contain specific, evidence-based actions aimed at reducing gender pay haps and providing tangible support for menopause. The plans must be approved at a senior level and published on an employer’s website and a government portal. This will be an annual requirement for those employers. More information is expected but this will become mandatory in 2027, and voluntary from 6^th April 2026.

14.2. The Government has also announced plans to develop menopause guidance for employers, although no further information is available as yet.

14.3. The Government has also announced plans to develop menopause guidance for employers, although no further information is available as yet.

15.1. The collective redundancy consultation requirements are currently triggered when an employer is proposing more than 20 redundancies at one establishment within a 90 day period. If the affected employees were spread across a number of sites, it was only the number of employees at each individual site which would trigger the requirement to collectively consult.

15.2. The Employment Rights Act will amend existing legislation to introduce a new threshold which would be based on the number of redundancies across the whole business rather than individual sites.  The proposal is that this threshold should be a single fixed number somewhere between 250 and 1,000 redundancies across the whole business but a tiered approach may be adopted e.g. the threshold is 250 redundancies for organisation with up to 2,500 employees and 750 employees where the organisation has more than 10,000 employees.

15.3. Consultation has begun on what the threshold should be has begun and is due to end on 21 May 2026.  Any changes are expected to come into force in 2027.

15.4. With effect from April 2026 the government will also increase the maximum period of the protective award available for failure to collectively consult from 90 days’ pay to 180 days’ pay per effected employee.

16.1. The Act ensures further rights for public sector workers who have been transferred under TUPE into the private sector.

16.2. The measures are intended to prevent the growing problem of a “two-tier workforce” where private and ex-public sector employees are on different terms and conditions. The Act, will reinstate a strengthened version of the “Code of Practice on Workforce Matters in Public Sector Service Contracts”, commonly known as the two-tier code. This will include a requirement to include provisions within outsourcing contracts that those transferring from the public sector into the private sector will be treated no less favourably, and public bodies must take all reasonable steps to ensure these provisions are included in outsourcing contracts.

16.3. This will happen from October 2026.

17.1. Currently large employers, i.e. employers with 250 or more employees must publish annual gender pay gap reports.

17.2. The Employment Rights Act expands this by requiring large employers to publish “Equality Action Plans” which detail what actions they are taking to improve gender equality, including reducing the gender pay gap.  Any company which an employer outsources work to should be included in the Equality Action Plan.  The idea is that this will encourage the employer to ensure that the companies it contracts with are also taking steps to support gender equality.

17.3. From Spring 2026 employers can voluntarily publish Equality Action Plans which will become compulsory from Spring 2027.  However information relating to outsourcing is subject to broader pay gap reforms and does not currently have an implementation date.

18.1. The Act repeals legislation that the Labour government considers to be anti-Union and ineffective, including the majority of the Trade Union Act 2016 and the Minimum Service Levels (Strikes) Act 2023. This happened on the 18^th December 2025.

19.1. Additional rights for union representatives.

The Act will strengthen the rights of union representatives in the workplace, for instance in increasing the allowance for paid facility time to undertake union related activities, introducing a new statutory right to paid time off for “equality representatives”, shifting the burden of proof as to what constitutes unreasonable time off onto the employer and for the employer to ensure that the representative has access to the necessary facilities. ACAS will consulted on a revised Codie of Practice in early 2026.

19.2. Widening scope of laws against ‘blacklisting’.

The laws making ‘blacklisting’ illegal will be updated and protect a wider range of workers. Consultation will begin in Spring 2026.

19.3. Protection from detriment/unfair dismissal for striking workers.

The law protecting workers from suffering detriment for taking industrial action will be strengthened so that workers takin part in official industrial action will be protected from detriment short of dismissal. In addition, employees will be regarded as having been automatically unfairly dismissed if they are dismissed within 12 weeks of the employee going on strike, even if they have stopped industrial action at the time of their dismissal.  They may also unfairly dismissed if dismissed after 12 weeks if the employer has not taken reasonable steps to resolve the dispute. Consultation starts in Spring 2026.

19.4. Right of unions to access workplaces.

There will be greater rights for unions to access workplaces for recruitment, organisation and collective bargaining purposes, including expansion to include digital as well as physical access. There will be a fast-track process for approval of access agreements that meet certain criteria, as well as appropriate mechanisms to enforce penalties for non-compliance with access requirements. Further details of this will be contained in secondary legislation following consultation which is expected to begin in Spring 2026.

19.5. Right to join a trade union & trade union recognition

Employers will have to provide their workers with a statement which sets out their right to join a trade union both at the start of their employment and at intervals thereafter. The conditions for trade union recognition in the Trade Union and Labour Relations (Consolidation) Act 1992 will be amended to remove the 10 percent test and replace with a “required percentage test”, which is envisaged to be between 2-10 percent, making it easier for workers to vote for a right to trade union recognition at their workplace. There will also be an ‘opt out’ rather than an ‘opt in’ to payment for membership of the union.

19.6. Repeal of Strikes (Minimum Service Levels) Act 2023.

The government was lobbied hard by the unions to repeal this law, which had allowed certain employers to issue a “work notice” requiring certain workers to work on strike days. The Act therefore has already repealed this legislation, which appears in any event to have been rarely used.

19.7. Simplifying industrial action ballots

The amount of information unions must include in ballot notices and industrial action notices will be reduced.

E-balloting will be introduced to make ballots more accessible.

20.1. The new Fair Work Agency, an executive agency of the Department for Business and Trade, will be able to enforce rights as well as providing advice to employers on compliance with the law. According to the government, the current system relies largely on individuals taking personal responsibility for enforcing their rights, resulting in the failure of employers to be challenged on breaches.

20.2. The Fair Work Agency will be responsible for co-ordinating the enforcement of a wide range of employment rights including the National Minimum Wage, statutory sick pay and holiday pay. It will provide a central unified authority as a point of contact, bringing together existing enforcement bosies such as the HMRC (for minimum wage purposes), the Employment Standards Inspectorate and the Gangmasters and Labour Abuse Authority. It will have powers to challenge businesses that breach the law, and enforcement powers such as the issue of civil penalties, recovery of enforcement costs and the ability to take cases to employment tribunals on behalf of workers. It will be established on the 7^th April 2026.

21.1. The Employment Rights Act will also improve the rights of school support staff. As is the case with carers in the adult social care sector, currently there is no national body that represents school support staff. Therefore, they lack a dedicated voice and institutions to advance and raise relevant issues.

21.2. The Employment Rights Act will reinstate the School Staff Negotiating Body, which was abolished in 2010. As support staff make up nearly half of the school workforce, the creation of this institution establishes greater representation to those working in the sector. In particular, it will enable them to more easily raise issues such as pay, terms and conditions and training.

21.3. Again, a lot of the detail will be subject to consultation and the power to create the necessary secondary legislation will be delegated to the Secretary of State. The SSSNB will be effective from the 2027/2027 academic year onwards.

22.1. The Employment Rights Act will strengthen the rights of care workers who are employed in the adult social care sector. At present, no body exists to represent those working in this sector, which in tandem with low rates of unionisation has meant their bargaining power has always been weak.

22.2. The Employment Rights Act however will establish an Adult Social Care Negotiating Body (ASCNB). It is intended that this body will serve to represent the interests of care workers and act as a mechanism to improve their pay and conditions. As this sector is currently beset with high staff turnover and low domestic recruitment, the changes proposed under the Employment Rights Act will likely be welcomed by those within it.

22.3. One important point to note however is that the Employment Rights Act does not automatically create the ASCNB. Instead it will only set out the process and the ASCNB will be established at a later date through secondary legislation. This will happen in October 2026.

24.1 Employee Pay

24.1.1. The manifesto proposal to make the minimum wage the same for all adults have not made it into the Act.

24.1.2. There was no tightening of the ban on unpaid internships.

24.2 Carer’s Leave

24.2.1. Introduced in April 2024, the one week statutory entitlement to carers leave has not been made a paid entitlement.

24.3. Sick Pay

24.3.1. There was no inclusion of support to terminally ill employees by encouraging employers and trade unions to sign up to the Dying to Work Charter.

24.4. Modernise Health & Safety Guidance

24.4.1. The proposed alteration to H&S guidance relating to extreme temperatures has not yet been addressed.

24.5. Changes to Apprenticeships

24.5.1. There is nothing as yet to provide a Youth Guarantee for training, work or apprenticeship opportunities for 18 to 21 year olds.

24.5.2. There are no proposed changes to the apprenticeship levy.

24.6. Employment Status

24.6.1. The Act does not include the introduction of one status of worker. The government have stated that longer term their aim is to remove the distinction between employees and workers.

24.6.2. There is no right to a written contract for self-employed workers.

24.7. Unions

24.7.1. The Employment Rights Act does not include the proposed collective grievance process.

24.7.2. There is no repeal of current regulation allowing agency workers to cover striking workers.

24.8. Work life balance

24.8.1. A new code of practice on the right to switch off, preventing 24/7 working from home, remains a proposed future reform.

24.9 New Technologies

24.9.1. The manifesto had included better and stronger regulation of Artificial Intelligence, which has not been included in the Act.

24.9.2. Also not included is a requirement for consultation with workers prior to introducing surveillance technologies.