An Employer’s Guide to the Employment Rights Act

The Employment Rights Act 2025 received Royal Assent on 18 December 2025, completing more than a year of parliamentary debate, including extensive “ping-pong” between the House of Commons and the House of Lords. It is the most significant overhaul of UK employment law in a generation, and several of its provisions are already in force.

The Act sits at the heart of the Government’s “Plan to Make Work Pay”, with the stated aim of building a fairer, more secure and more productive labour market. For established business owners, HR teams and startup founders, the practical question is no longer whether the changes will happen but when each one takes effect, and what it means for day-to-day employment processes.

Implementation is being phased through 2026 and 2027, with most measures requiring further secondary legislation and consultation before they bite. The business accountants at Hamlyns are ready to help you navigate the operational and financial impact of these changes with practical accounting, tax and financial planning advice to keep your business compliant.

With that in mind, let’s break down the key provisions, timescales, and impact of the Employment Rights Act, starting with a quick reference to the changes most likely to affect your business.

Quick Reference: Key Changes, Who They Affect, and When They Apply

Implementation dates marked “expected” depend on the Government’s Implementation Roadmap (originally July 2025, last updated 3 February 2026) and on secondary legislation that is still being consulted on. We will update this guide as further dates are confirmed.

Key Elements of the Employment Rights Act

Expanded Day-One Rights

• Unfair dismissal: the qualifying period for protection from unfair dismissal will be reduced from two years to six months, and the statutory cap on the compensatory award will be removed. This is currently expected to take effect in 2027 and represents one of the most significant changes for employers. Day-one unfair dismissal protection, originally proposed in the Bill, was dropped before Royal Assent.
• Paternity and unpaid parental leave: these will be day-one rights from 6 April 2026. Note that statutory paternity pay still requires 26 weeks’ service; only the right to take leave becomes a day-one right.
• Bereavement leave: a new right to at least one week of unpaid bereavement leave from day one is being introduced, in addition to the existing parental bereavement leave. The qualifying relationship will be defined in regulations, which are still being consulted on. The day-one right is expected in 2027.

Zero and Low-Hours Contracts

• The Act seeks to end “exploitative” aspects of zero-hour contracts.
• Employers will be required to offer guaranteed hours to workers who regularly work more than their contracted hours over a specified reference period (likely 12 weeks).
• Workers will also have the right to reasonable notice of shift changes and compensation for short-notice cancellations. These rights will be extended to agency workers.

Flexible Working

• Employers must provide a “reasonable” justification if they refuse a flexible working request.

Statutory Sick Pay (SSP) Reforms

• SSP will be payable from day one of sickness absence from 6 April 2026, eliminating the current three-day waiting period.
• The lower earnings limit for SSP eligibility will be removed, meaning all eligible employees will be entitled to SSP, regardless of earnings. Those earning below the former threshold will receive 80% of their weekly earnings or the standard flat rate, whichever is lower.

Restrictions on “Fire and Rehire”

• From 1 January 2027, dismissing employees in order to re-engage them on changes to certain core terms (so-called “restricted variations”, including working hours, shift times and shift length) will be automatically unfair. Provisions also extend to “fire and replace” where the replacement does substantially the same work. Limited exemptions will apply where an employer can demonstrate genuine financial difficulties affecting the business’s viability.

Harassment Protection

• The Act strengthens employer duties to prevent sexual harassment, requiring “all reasonable steps” (rather than just “reasonable steps”) to be taken. Employers will also be liable for third-party harassment unless they take all reasonable steps to prevent it. These changes are expected in October 2026.
• Whistleblowing protection is being extended to disclosures relating to sexual harassment, taking effect from 6 April 2026.

Collective Redundancy

• The maximum protective award for failure to comply with collective redundancy consultation obligations will double from 90 days’ to 180 days’ pay per affected employee, taking effect from 6 April 2026. The “at one establishment” test for triggering the consultation obligation has been retained in the final Act.

Fair Work Agency

• A new agency will be established to enforce employment rights, including minimum wage, holiday pay, statutory sick pay, employment agency rules, and protections against labour exploitation and modern slavery. It will have the power to investigate breaches, impose penalties, and bring employment tribunal claims on behalf of workers.

Trade Union Rights

• Several union and industrial-action measures took effect on or shortly after Royal Assent, including the repeal of the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016, and (from 18 February 2026) the rule that dismissal for taking part in lawful industrial action is automatically unfair.
• The statutory recognition process will be simplified from 6 April 2026, with electronic balloting expected to follow in August 2026.
• From October 2026, employers will be obligated to inform workers in writing of their right to join a trade union, and trade unions will gain expanded statutory access rights to workplaces, including digital access.

Note: many of these changes will require further consultation and secondary legislation, and the Government’s Implementation Roadmap will continue to be updated. Hamlyns is monitoring the position and will refresh this guide as more details are confirmed.

Key Deadlines and Actions for Employers

The Employment Rights Act is being implemented in phases through 2026 and 2027. Here is the current timetable, based on the Government’s updated Implementation Roadmap:

Royal Assent (18 December 2025) and 18 February 2026

• Repeal of the Strikes (Minimum Service Levels) Act 2023 and most of the Trade Union Act 2016.
• Removal of the 10-year ballot requirement for trade union political funds.
• Simplification of industrial action and ballot notices.
• Dismissal for taking part in lawful industrial action becomes automatically unfair (from 18 February 2026).

6 April 2026

• Day-one paternity leave and unpaid parental leave.
• Statutory Sick Pay payable from day one, with the lower earnings limit removed (those earning below the former threshold will receive 80% of their weekly earnings or the standard rate, whichever is lower).
• Maximum collective redundancy protective award doubled from 90 to 180 days’ pay.
• Whistleblowing protection extended to disclosures about sexual harassment.
• Fair Work Agency established as a single body enforcing minimum wage, holiday pay, SSP, employment agency rules and labour exploitation protections.
• Simplified statutory trade union recognition process.

August 2026 (expected)

• Electronic trade union balloting introduced.

October 2026 (expected)

• Duty to take “all reasonable steps” to prevent sexual harassment, including third-party harassment.
• Tribunal time limit for most claims extended from 3 months to 6 months.
• New duty for employers to inform workers in writing of their right to join a trade union.
• Expanded union access rights, including digital access to workplaces.
• Reform of tipping law (consultation with workers required before creating a tipping policy).
• Fair Pay Agreement body for adult social care established.

1 January 2027

• Dismissals to impose a “restricted variation” (such as changes to working hours, shift times or pay) become automatically unfair, the new statutory restriction on “fire and rehire”. The provision also covers “fire and replace” where the replacement is doing substantially the same work.

During 2027 (expected)

• Six-month qualifying period for unfair dismissal protection, replacing the current two-year requirement.
• Removal of the statutory cap on the compensatory award for unfair dismissal.
• Right to guaranteed hours and reasonable-notice protections for zero-hour and low-hours workers, extended to agency workers.
• Statutory probationary period of around nine months expected to be set in regulations.
• Reasonable explanation required for refusing flexible working requests.
• Mandatory equality action plans for large employers (menopause and gender pay gap).
• Tighter regulation of umbrella companies.
• Day-one unpaid bereavement leave, with the qualifying relationship defined in regulations.
• Stronger pregnancy and maternity protections.

How Employers Can Prepare for the Employment Rights Act

• Review and amend employment contracts, handbooks, and procedures for dismissal, probation, flexible working, sickness, family leave, and harassment to reflect the new regulations.
• Develop clear, documented probation processes (between 3 and 9 months) that support employees’ new day-one rights.
• Ensure managers are trained to handle flexible working requests fairly and legally, and provide reasonable refusals where appropriate.
• Review any zero-hour contracts (if relevant) and scheduling to offer guaranteed hours based on regular work patterns.
• Update policies, training and risk assessments for all forms of harassment, including third-party incidents.
• Prepare systems to handle day-one paternity, parental, and bereavement leave requests.
• Strategically plan for potential increased union activity and ensure compliance with new recognition and access rights.
• Expect higher legal, administrative, and payroll costs due to compliance, documentation, potential tribunal cases, and expanded sick and leave pay obligations.
• Demands on managers could increase due to new processes and potential employee requests; plan for the additional time and training required.
• Keep a close eye on official government guidance and secondary legislation.
• Provide comprehensive training on new rights, consultation procedures and documentation requirements.
• Proactively communicate changes to staff and, where relevant, engage with unions.
• Ensure systems are ready for enhanced record-keeping and potentially complex scheduling.
• Consult legal experts and professional business advisory services for guidance on these changes.

It is abundantly clear that the Employment Rights Act will introduce real compliance challenges for UK employers, and several provisions are already in force. UK employers must rethink their existing processes and strategies if they are to weather the proverbial storm. However, those who succeed will see this as an opportunity, rather than a legal obstacle that gets in the way.

Proactively understanding, preparing for, and adapting to the Act’s requirements will allow you to build a fairer, more motivated, and more stable workforce well into the future.

Hamlyns provides personalised guidance to help established businesses safeguard their organisation and workforce. For information on how we can help you navigate these changes, get in touch with us today.