Employment Rights Act 2025

Key provisions and reform

The ERA reduces the qualifying period for unfair dismissal rights from two years to six months.

Employees who have an effective termination date on or after 1 January 2027 will be eligible to bring a claim for unfair dismissal where they have accrued six months’ service (i.e. any employee engaged on or before 1 July 2026).

Both the 52-week gross pay and the statutory compensation cap for unfair dismissal claims will be removed (note that there will no impact on the basic award or statutory redundancy pay). This will take effect from 1 January 2027, to coincide with the reduction of the qualifying period.

Employer considerations

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Key provisions and reform

Most tribunal claims must currently be brought within a time limit of three months of the act complained of.

From October 2026, this time limit will be extended from three months to six months, and will apply to most types of claims, including claims for discrimination and unfair dismissal.

Employer considerations

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Key provisions and reform

Currently, employers must take “reasonable steps” to prevent sexual harassment of employees and workers in the course of their employment. Under the ERA 2025, and with effect from October 2026, employers must now take “all reasonable steps”.

The Government is expected to specify the steps that are required in regulations, but it is not expected that these will be issued until 2027.

Employers will also be liable for harassment more broadly by third parties unless they have taken all reasonable steps to prevent it.

From April 2026, disclosure of sexual harassment will be added to the list of qualifying disclosures, subject to such disclosure meeting the usual test for a protected disclosure.

Any agreement (e.g. non-disclosure agreement) purporting to prevent a worker making disclosures about harassment will be void (and the wording of the provision appears to also cover third party harassment). It is not yet known when this will come into force.

Employer considerations

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Key provisions and reform

The permitted grounds for refusing a flexible working request are not changing. However, from 2027, any such refusal will have to be reasonable.

Employers will also be required to consult with the employee before refusal of a request, with the form of this consultation to be set out in subsequent regulations.

Rejections of requests must also be in writing and specify both the grounds and why the rejection is reasonable.

Employer considerations

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Key provisions and reform

Employers must now provide, as part of the written statement of employment particulars, express notice of the worker’s right to join a trade union. Existing workers must also be informed, although the form, timing and frequency of notices is to be decided in secondary legislation. The measures are due to come into force in October 2026.

The penalties for failing to comply are limited, and in line with the existing penalty for non-compliance with section 1 of the Employment Rights Act 1996 (two to four weeks’ pay, subject to the statutory cap). As with a breach of section 1, it cannot be brought as a standalone claim.

Trade unions will gain a wider right of access to workplaces for the purposes of recruitment, organising and collective bargaining. Unions will need to follow a statutory process in order to request access, with employers liable to enforcement action by the Central Arbitration Committee (CAC) where they fail to comply. The detail of the statutory process is to be determined in secondary legislation, with measures coming into effect in October 2026.

Employer considerations

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Key provisions and reform

Employers must collectively consult if they propose to make 20 or more redundancies within a 90-day period at one establishment or if another, new threshold test is met.

The new test is to be defined in secondary legislation but is likely to be based on the number of redundancies across the whole employing entity, either as a percentage of the workforce or a specified number. This is due to be implemented in 2027.

The maximum protective award for breaching the collective consultation requirement will increase from 90 days’ pay, to 180 days’ pay per affected employee. This is due to take effect from April 2026.

Employer considerations

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Key provisions and reform

From January 2027, it will be automatically unfair to dismiss an employee for refusing to agree changes to their employment contract relating to pay, pension, hours of work and holiday entitlement (and further matters to be defined in regulations – possibly extending to benefits).

It will also be an automatically unfair dismissal where the dismissal is due to the employer’s intention to hire somebody else (whether employee, worker, agency worker or contractor) on the varied terms, to
do substantially the same role.

Any dismissals made as a result of an employee refusing to agree to the introduction of flexibility clauses in relation to any of the above matters will also be automatically unfair.

There is a limited exception to cover situations where the employer is facing financial difficulties likely to affect the ability of the business to continue as a going concern, and where the contractual change could not reasonably be avoided. This will be a high threshold to meet.

Employer considerations

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Key provisions and reform

The current 26-week qualifying period for paternity leave and one-year qualifying period for unpaid parental leave will be removed from April 2026, instead becoming day one rights.

From April 2026, employees will also be entitled to take paternity leave following shared parental leave.

Employer considerations

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Key provisions and reform

A new right to bereavement leave (extending the current right to parental bereavement leave) will be introduced in 2027. The government will have the power to introduce, by regulation, a day one right to a minimum of one-week of leave for employees.

Subsequent regulations will specify the necessary relationship with the deceased for eligibility, though this is expected to mirror the definition used for time off for dependants.

The right will extend to pregnancy loss that occurs before 24 weeks, e.g. a miscarriage.

Employer considerations

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Key provisions and reform

The government has been given the power to introduce regulations that offer protection from dismissal (aside from redundancies) during pregnancy, maternity leave or for a set period after a return to work following the same.

There is also scope for the government to extend this protection to apply to employees on/returning from adoption leave, shared parental leave, neonatal care leave and bereaved partners’ paternity leave. The government are currently consulting on this point. It is expected that the protection will continue for six months after a return to work from maternity leave (and any other relevant leave). Subsequent regulations will specify some exceptions to this rule, that are as yet unknown. The provisions are expected to be enacted in 2027.

Employer considerations

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Key provisions and reform

From April 2026, the current three-day waiting period for SSP will be removed, as will the earnings threshold. SSP will be set at a rate of 80% of average earnings for workers who earn below the statutory rate of SSP.

Employer considerations

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Key provisions and reform

Zero and low hours workers will gain a new right to be offered a contract that reflects the actual hours worked where that worker regularly exceeds their existing contractual zero/ minimum hours over a 12-week reference period.

The form of the offer, and how long it must remain open for, are to be determined in subsequent regulations. The provisions carve out an exception for short-term labour needs where that is reasonable (i.e. where there are only specific tasks required, or seasonal work).

The duty to offer guaranteed hours can be disapplied by collective agreement.

Employers will not be able to get round the requirements by simply restricting the hours offered during the reference periods.

Zero/ low hours workers will also be entitled to reasonable notice of shifts and to compensation for shift cancellations/ changes at short notice.

These rights will also extend to agency workers, and it will be the responsibility of the hirer (i.e. end client) to offer regular hours contracts, and the liability of the agency to provide shift cancellation compensation.

The above changes are due to take effect in 2027.

Employer considerations

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Key provisions and reform

Employers with 250+ employees must publish (alongside their gender pay gap report) an “Equality Action Plan” which will cover:

• a gender pay gap action plan; and
• a menopause action plan.

Penalties for failing to comply are expected, though the detail of this (as well as the form and regularity of publication) are to be determined in subsequent regulations.

The measures are expected to come into force in 2027, with voluntary reporting being introduced in April 2026.

Employer considerations

For more information on this, please download our full briefing note.