The Employment Rights Act 2025 – Key Changes

The greatest change in employment legislation in decades received Royal Assent on 18th December 2025, with implementation starting from this April and running into 2027. The Act brings with it a series of confirmed and proposed changes which will reshape how you manage pay, leave, industrial relations, and workplace rights within your organisation.

Many of these reforms aim to strengthen employee protections and introduce earlier eligibility for key benefits which means it’s important for you to start preparing now!

We have already received a number of questions so we have summarised the most significant developments that affect our clients.

Please note that this is correct at the time of writing, although much is still under consultation and/or in draft form.

From 29 December 2025

A bereaved employee is able to take paternity leave as a day one right if the mother, or adopter, dies, rather than needing to have the current 26 weeks’ service.

1 April 2026

• National Minimum Wage will increase, with the rate for workers aged 21+ rising to £12.71 per hour. The 18–20 age group rate rises to £10.85, and the 16–17 and apprentice rates increase to £8.00.

6 April 2026

• Extended eligibility for statutory sick pay – to be made available to all workers from day one. The Bill removes the three-day waiting period as well as the lower earnings limit.
• Paternity leave and ordinary parental leave to be made day one rights for all (note this is paternity leave not pay)
• Paternity leave of 52 weeks for bereaved partners – an extended period of 52 weeks statutory paternity leave for employees where the child’s mother/main adopter dies within the first year of the birth/adoption. This also allows for employees to take up to 8 weeks bereaved partner’s paternity leave (unpaid) where both the child and the mother (or adopter) die within the first year.
• Establishment of Fair Work Agency – a new enforcement body, established to enforce employment rights.
• Sexual harassment to be added to whistleblowing legislation – meaning it will qualify for protection under the whistleblowing provisions.
• Increases to statutory rates– statutory sick pay will increase to £123.25 per week (or 80% pay if lower) and statutory family pay will increase to £194.32 per week (or 90% of earnings if lower)
• Doubling of collective redundancy protective award – where an employer fails to comply with collective consultation requirements (for 20+ employees within 90 days) the maximum period for the award increases from 90 days to 180 days pay.

June/July 2026

• Changes to data protection legislation – amends part of the UK GDPR with changes such as different timescales for data subject access requests and how controllers should deal with data protection complaints.

October 2026

• Requirement to consult employee representatives on allocation of tips policies.
• Extension of time limits to bring employment tribunal claims – from 3 to 6 months.
• Employer liability for third party harassment – where the employer has not taken all reasonable steps to prevent this.
• Reform of rules on dismissal and re-engagement – known as ‘fire and rehire’.

January 2027

• Reduction in unfair dismissal qualifying period - from 2 years to 6 months for dismissals from 1 January 2027. There will also be a removal of the statutory cap on compensation.

Looking ahead to changes in 2027 (subject to consultation)

• Regulation of umbrella companies
• Reform of zero hours contracts – workers will have a right to guaranteed hours if they work regular hours over a defined period, reasonable notice of a shift, reasonable notice of cancelation or change of shift and payment for cancelled, moved or shortened shifts at short notice. This will extend to agency workers.
• Reform of the right to request flexible working - additional flexible working measures for employers, including clearer requirements around refusal and communication.
• Protection against dismissal for pregnant employees and those on or returning from family related leave – an extension of the current protection in place against redundancy dismissal.
• Statutory right to bereavement leave – the current right to parental bereavement leave will be extended, so bereavement leave is not limited to parents who have lost a child. Regulations will specify relationships that are covered and it will be extended to cover pregnancy loss, including miscarriage (currently only applies for stillborn after 24 weeks of pregnancy).
• Collective redundancy changes – requiring employers to consider redundancies across the organisation (rather than by site) or possibly as a percentage of the organisation.
• Holiday leave records – an obligation on employers to make and retain records that are adequate to show you have complied with statutory annual leave obligations.

What You Should Do Now to Prepare

With so many changes on the horizon, now is the time to act.

• Review HR systems and payrollto ensure new statutory rates are updated from April 2026.
• Audit current harassment practices to ensure your current approach to assessing, managing and preventing the risk of harassment covers third parties.
• Update contracts and policies to reflect the new entitlements including sick pay, day-one rights, bereavement leave and sexual harassment changes.
• Plan for cost and workforce impactsespecially around day-one sick pay, extended family leave, and guaranteed hours.
• Communicate proactively with staff to build trust and reduce confusion about new rights and entitlements.
• Train managers to ensure they are aware of the changes.
• Assess the use of casual or agency workers, and start preparing for potential guaranteed-hours requirements.

How Can We Help?

This is a huge change to employment law as we know it, so we know it can be daunting to ensure you make all of the required changes.

If you are a member of our HR Hub you will find a detailed guide on how to prepare, and if you are already working with us, we will be in contact to support you with these changes.

However, if you are not already working with us, we can support you in the following ways:

1. Sign up to our newsletter to receive updates and information on how to prepare
2. Join our HR Hub to get access to a detailed guide on the changes and how to prepare plus professionally written template letters, forms, checklists and how to guides.
3. Purchase pay as you go time in our shop to buy 1 hour of time with one of our Consultants to discuss the changes, answer any questions or concerns you may have about you need to do to prepare for these updates or anything else HR related you’d like to ask us.
4. Arrange a free consultation if you’d like to discuss how we might be able to support you with these changes or anything else HR related.