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The Employment Rights Act 2025 is now law and brings about some of the biggest employment law reforms in the UK. As measures are implemented, business owners need to act now to understand how this will impact them and what can be done to stay compliant.
For more information, download the Employment Rights Act 2025 guide.
What does the Employment Rights Act 2025 cover?
The Employment Rights Act 2025 introduces wide-ranging reforms to workplace rights, with changes taking effect from late 2025 and continuing throughout 2026 and 2027.
The reforms cover key areas including unfair dismissal, paternity leave, parental leave, Statutory Sick Pay (SSP), and sexual harassment. Together, they represent some of the most significant changes to employment law in a generation.
As a result, employers will need to review and update their HR processes, workplace policies, and employment documentation to remain compliant.
Below, we explore some of the most significant changes in more detail.
Types of family leave
The ERA removes the requirement for length of service for Paternity Leave and Unpaid Parental Leave for parents.
Making this type of leave more inclusive for all. These updates are already in place and have been since April 2026.
In addition, an extension of the rights and protections for pregnant workers will come into effect in 2027.
Leave and absence are key elements of people management. So, it's important to ensure your sick leave and absence policies reflect these changes.
Statutory Sick Pay (SSP)
From 6 April 2026, changes to Statutory Sick Pay (SSP) came into effect. This includes:
Removal of the Lower Earnings Limit
Eligible employees can now qualify for SSP regardless of their earnings. Previously, employees had to earn at least the Lower Earnings Limit to be eligible.
SSP Payable from the First Day of Absence
The three unpaid waiting days have been removed. Eligible employees are entitled to SSP from the first full day of sickness absence.
Law changes from October 2026 onwards
July 2026 saw the UK government release an updated roadmap for law changes from October 2026. This includes:
Extension of employment tribunal time limits
Employment tribunal time limits will increase from October 1st. Increasing the time limit from 3 months to 6 months.
With one exception in Scotland which will happen on 9th November.
Prevention of sexual harassment
A requirement to take "all reasonable steps" to prevent sexual harassment in the workplace. This represents a stricter standard that places greater responsibility on employers to ensure a safe working environment.
Not only does this apply within the workplace but also outside. With an obligation for employers to not permit harassment of any form from a third party.
This amendment provides stronger protections for employees. And allows them to bring claims against their employer if such incidents occur.
Further amendments to Trade Union reforms
From October 30th employers will be required to inform workers of their right to join a trade union. Failure to do so may result in compensation claims.
The Employment Rights Act 2025 also strengthens trade union rights by introducing:
A right of access to workplaces for trade union representatives
New rights and protections for trade union representatives
Enhanced protection against detriment for workers who participate in lawful industrial action
Fair Pay Agreements
Regulations will be introduced to enable the establishment of Fair Pay Agreements (FPAs) in the adult social care sector. Worker and employer representatives will come together to establish minimum pay terms that will become binding across the sector.
Implementation is expected at some point in October 2026.
Fire and Rehire
From January 2027, the use of fire and rehire practices will be limited to very specific circumstances.
This will make it difficult for businesses to amend employment contract terms which leave the employee worse off.
With the aim to protect employees, ensuring that employers are acting in a reasonable way when attempting to amend contracts and dismiss employees.
Flexible working requests
From 2027, employers will have to accept flexible working requests unless it would be unreasonable to do so and explain why it was reasonable to refuse a flexible working request under one of the eight statutory reasons.
Unfair dismissal reforms
From 1 January 2027, the service requirement for ordinary unfair dismissal claims will be shortened to 6 months, from 2 years.
This applies retrospectively, meaning any employee with six months of service on that date will have the right to claim unfair dismissal.
Changes to payment of tips to workers
For the hospitality industry in particular, changes to how tips will be paid is an essential update.
Expected by the end of 2026, laws will tighten rules around the creation of tips policies.
The latest roadmap update has moved implementation from October to the end of 2026. Leaving many restaurant and bar owners uncertain of exactly when to expect these changes.
The Fair Work Agency
By introducing The Fair Work Agency the government has removed tasks from various bodies. Maintaining the enforcement of employment law in the UK under one body.
They currently issues such as:
Enforcement of the National Minimum Wage
Agency Worker Protections
Modern Slavery Offences
However, their powers will soon expand with future plans to oversee:
SSP enforcement
Statutory Holiday pay enforcement
Providing enhanced tribunal support, including assisting workers in bringing claims forward
As the FWA gains power, it's important to ensure compliance. Protect yourself legally with the support of professional HR experts from BrightHR.
Failure to comply
Employers that fail to comply with the Employment Rights Act 2025 may face:
Financial penalties
For breaches such as failing to pay statutory entitlements, maintain required records, or comply with trade union access requirements, financial penalties are likely. Including hefty fines.
Employment Tribunal claims
Relating to issues including trade union rights, guaranteed hours for eligible workers, and unfair dismissal, employees will be able to bring forward claims to employment tribunals.
Increased tribunal compensation
Tribunal compensation payments of up to 25% may be applied for failing to follow relevant statutory codes of practice.
Criminal sanctions
For certain offences, including failing to maintain statutory holiday pay records or breaches relating to modern slavery, employers could face criminal prosecution.
Reputational damage
Through enforcement action and public naming for non-compliance, damages to reputation can severely impact a business.
Additional legal risks
Other legal risks including injunctions, damages, and protective awards for failures such as inadequate collective consultation may also be a consequence.
Steps employees need to take now
Employers are required to make adjustements in line with the Employment Rights Act 2025.
Having water-tight HR policies, documents, and procedures in place supports your business to stay on the right side of the law.
For some handy tips, download our guide for an action plan on how to prepare.
BrightAdvice employment law experts are only a call away. They’re available 24/7 to provide you with the advice you need to guarantee HR compliance for your business.
If you’re worried about these changes to UK employment law or would like support in updating your processes, our team can help you. Get in touch or book a free demo today.