The Employment Rights Act 2025: What Employers Need To Know About The Biggest Shake‑Up In Employment Law In A Generation

The Employment Rights Act, which came into law in December, represents the most significant employment law reform package in decades. Its scope is wide, its ambition is high, and its impact on employers will be profound.

For businesses, this is not a single change to absorb — it is a programme of reform, with new rights and obligations introduced in phases in the coming months and into 2027. With clarity on what is required, employers now need to start to plan ahead for the next phases to ensure they are best placed to manage risk, maintain compliance, and adapt their workforce strategies.

Antonio Fletcher, Head of Employment at Whitehead Monckton, takes a look at the key milestones and changes.

April 2026

1. Day‑One Family‑Friendly Rights

Employees will gain immediate access to:

• Paternity leave
• Unpaid parental leave
• Shared parental leave
• Parental bereavement leave
• Carers’ leave

This removes the current qualifying periods and significantly increases flexibility for working parents and carers.

2. Statutory Sick Pay (SSP) Reform

SSP will undergo its most substantial reform in years:

• Payable from day one of sickness (no waiting days)
• Lower Earnings Limit abolished, extending eligibility to part‑time and lower‑paid workers
• SSP rate increased

This will increase employer costs and administrative responsibilities, particularly in sectors with high sickness absence. It may have a further knock on effect of creating more short-term absences.

4. Whistleblowing and Collective Redundancy

Amongst other changes April 2026 also introduces:

• Whistleblower protection for those raising concerns relating to sexual harassment
• An enhanced protective award for failures in collective consultation scenarios, particularly relevant to larger redundancy exercises
• The creation of a Fair Work Agency to oversee enforcement of employment law matters

Employers should expect greater scrutiny of redundancy processes and workplace culture.

October 2026:

1. Extended Timeframe for Issuing Employment Tribunal Claims

An important change is the extension of the time limit for employees to fileemployment tribunal claims from 3 to 6 months. The Government’s stated aim is to allow more time to settle an issue before a claim needs to be issued. However, a consequence of this is that more people may issue claims late in the day due to the extended deadline.

2. Ban on Fire and Rehire

The controversial practice of dismissing employees and rehiring them on new terms will be severely restricted.

While not an outright ban on contractual change, the reforms:

• Remove dismissal and re‑engagement as a negotiation tool
• Raise the threshold for lawful changes
• Require more robust consultation and alternative strategies*
• Employers will need to plan contractual changes more carefully and engage earlier with staff.

3. Expanded Trade Union Rights

Further strengthening of union rights will increase the importance of constructive industrial relations as unions will have greater access to workforces.

The first changes took immediate effect at the end of 2025, with the repeal of the Strikes (Minimum Service Levels) Act 2023 and parts of the Trade Union Act 2016, strengthening protections for workers participating in industrial action and limiting employers’ ability to discipline or dismiss employees involved in lawful strikes.

4. Stronger Duty to Prevent Sexual Harassment

Since October 2024, employers have been required to take “reasonable steps” to prevent sexual harassment. The Act raises this to ‘all reasonable steps’, a materially higher standard.

As a minimum, compliance will require:

• Clear, well‑communicated policies
• Mandatory staff training
• Manager training on handling complaints
• Evidence of proactive prevention

2027:

1. Day‑One Right to Unfair Dismissal — With a Twist

The original proposal for immediate unfair dismissal protection has been softened, replaced by a six‑month qualifying period.

This aims to balance employee protection with employer flexibility by:

• Preserving a meaningful probationary period
• Reducing the risk of early tribunal claims
• Supporting SMEs who rely on probation to assess suitability

Employers should now:

• Review and tighten probationary policies to ensure that they are fit for purpose as they will be relied on to a greater degree
• Train managers on performance management during probation
• Strengthen recruitment processes to reduce risk of needing to make early dismissals

2. Mandatory Gender Pay‑Gap and Menopause Action Plans

From 2027, certain employers will need to publish:

• A gender pay‑gap action plan
• A menopause action plan

This moves reporting from transparency to accountability, requiring employers to demonstrate progress, not just data.

3. Stronger Rights for Pregnant Workers

Additional protections will be introduced to safeguard pregnant employees from dismissal, discrimination and unfair treatment.

New protections will apply:

• During pregnancy
• Throughout family‑related leave
• For a period following return to work

This will require employers to handle performance, conduct, and redundancy processes involving pregnant employees or new parents with heightened care.

4. Zero‑Hours Contract Protections

New rights will seek to provide:

• Predictable working hours
• Minimum notice for shifts
• Compensation for late cancellations

This will particularly affect retail, hospitality, care, and education.

What Employers Should Do Now

• Audit policies and contracts — including family-friendly policies, sickness procedures, dismissal processes, zero‑hours contracts and harassment procedures.
• Train managers and staff — especially on dismissal, harassment prevention and family‑leave rights.
• Strengthen HR governance — ensuring accurate records, transparent processes and consistent decision‑making.
• Budget for increased costs — particularly SSP and expanded leave rights.
• Engage early with workforce representatives — as union rights expand and fire‑and‑rehire becomes restricted.

How Whitehead Monckton Can Help

The Employment Rights Act marks a decisive shift in UK employment law — one that prioritises security, predictability, and fairness for workers. For employers, the challenge is not simply compliance, but adaptation.

Whitehead Monckton’s Employment Law team supports individuals and organisations across sectors, including education, manufacturing, construction, professional services, SMEs and start-ups. Working closely with HR consultancy Eclipse HR, we provide seamless legal and HR support to help employers navigate all aspects of employment law with confidence We have offers available on new handbooks, policies and contracts and offer a substantial range of management and workforce training.

Contact Whitehead Monckton:

• 01622 698000
• [email protected]
• whitehead-monckton.co.uk