The UK Employment Rights Act 2025 introduces wide-ranging reforms that will significantly reshape workplace rights from 2026 onwards. Employers should begin preparing now, as many of these changes will require updates to policies, contracts and day-to-day people management practices.
Major Changes Employers Need to Know
Stronger Trade Union Rights
From February 2026, trade union and industrial action rules will be relaxed. The removal of voting thresholds in some sectors, longer ballot mandates and enhanced protections for workers taking industrial action will make collective action easier and legally safer for employees. Employers will need to manage employee relations more carefully to avoid disputes escalating.
Higher Pay Rates
National Minimum Wage and National Living Wage rates will rise from April 2026, with notable increases for younger workers and apprentices. In addition, the Real Living Wage has been set at higher voluntary rates, particularly in London. Payroll systems and workforce budgets should be reviewed well in advance.
Day-One Family Leave Rights
Paternity leave and parental leave will become day-one rights, removing service length requirements. Statutory family leave pay will also increase. Employers should prepare for greater flexibility needs, particularly among new starters.
Statutory Sick Pay Reform
Statutory Sick Pay will be payable from the first day of absence, with the waiting period removed. SSP will be calculated at 80% of average weekly earnings (subject to a cap). While access expands, transitional arrangements will require careful handling of ongoing absences.
Fire and Rehire Restrictions
Dismissing employees who refuse contractual changes will be automatically unfair unless employers can clearly demonstrate serious financial difficulty and prove the changes were unavoidable. This significantly raises the legal risk of workforce restructuring without proper consultation.
Harassment and Whistleblowing Protections
Employers will be required to take all reasonable steps to prevent sexual harassment, including harassment by third parties. Allegations of sexual harassment made in the public interest will qualify as protected disclosures, strengthening whistleblowing protections.
Longer Tribunal Time Limits
The deadline for bringing most employment tribunal claims will double from three to six months. Employers should retain records for longer and ensure internal grievance processes are robust.
Unfair Dismissal Changes (From 2027)
The qualifying period for unfair dismissal claims will reduce from two years to six months, increasing legal exposure during probationary periods.
What Employers Should Do Now
- Review contracts, policies and handbooks
- Update pay, sickness and family leave procedures
- Train managers on dismissal, harassment and employee relations
- Plan ahead for increased enforcement and scrutiny
The Employment Rights Act 2025 represents a clear shift toward stronger worker protections. Early preparation will be key to staying compliant and protecting your business.