The Employment Rights Act 2025 represents one of the most significant reforms to employment law in England in a generation. Introduced as a cornerstone of the government’s Plan to Make Work Pay, the Act is designed to modernise workplace protections, improve job security, and create a fairer balance between flexibility for businesses and certainty for workers.
For SME employers, HR leaders, senior decision-makers, and employees alike, the message is clear: this legislation will reshape how people are hired, managed, and supported at work. With implementation rolling out across 2026 and 2027, now is the time to understand what is changing and how to prepare.
When Does the Employment Rights Act 2025 Come into Force?
The Act received Royal Assent on 18 December 2025. While some measures took effect immediately, most reforms are being introduced in phases to give businesses time to adapt.
Key Changes Include:
February 2026: New protections linked to industrial action and unfair dismissal
April 2026: Day one rights to Statutory Sick Pay and paternity leave, plus strengthened redundancy consultation penalties
January 2027: Changes to the unfair dismissal qualifying period
Using common commencement dates in April and October, the government aims to provide clarity and consistency as the new framework comes into force.
Stronger Protection Against Unfair Dismissal
One of the most impactful changes under the Employment Rights Act 2025 is the overhaul of unfair dismissal rules.
The qualifying period to bring an unfair dismissal claim will be reduced from two years to six months, making protections accessible far earlier in employment. At the same time, the cap on compensatory awards is being removed, increasing potential financial exposure for employers.
Dismissals linked to participation in lawful industrial action will now be automatically unfair, and the Act sharply restricts the use of “fire and rehire” practices. Dismissing an employee for refusing changes to core contractual terms may be deemed unfair unless an employer can demonstrate genuine and severe financial necessity.
For employers, this places greater importance on fair process, clear documentation, and early HR advice.
Ending Insecure Work and Zero-Hours Exploitation
The Act tackles what it describes as one-sided flexibility by introducing new baseline protections for workers.
Employees and agency workers will gain rights to:
- Guaranteed hours where work patterns are regular
- Reasonable notice of shifts
- Compensation for short-notice shift cancellations
These measures aim to curb exploitative zero-hours arrangements while preserving appropriate flexibility where it genuinely suits both parties.
Statutory Sick Pay From Day One
From April 2026, Statutory Sick Pay (SSP) will be significantly strengthened:
SSP will be payable from the first day of sickness absence. The Lower Earnings Limit will be removed, extending eligibility to millions more workers.
This change is expected to have a particularly strong impact in sectors such as hospitality, social care, and retail. Employers will need to review payroll systems, absence policies, and cost forecasting in advance.
Expanded Family-Friendly Rights
The Employment Rights Act 2025 introduces meaningful improvements to family and carers’ rights, many of which will apply from day one of employment.
Key changes include:
- Day one access to paternity leave and unpaid parental leave
- Greater flexibility around when paternity leave can be taken
- A new right to unpaid bereavement leave, including following pregnancy loss before 24 weeks
- Enhanced protection from dismissal for pregnant employees and new mothers, extending to at least six months after return to work
Flexible working rights are also strengthened, requiring employers to follow a clearer, more transparent process when refusing requests and to ensure refusals are reasonable.
A Tougher Stance on Harassment and Workplace Conduct
Fairness and dignity at work sit at the heart of the new legislation.
Employers will now be under a duty to take all reasonable steps, not just reasonable steps, to prevent sexual harassment. Liability will also extend to harassment by third parties, such as customers or contractors, unless employers can demonstrate preventative action.
Non-disclosure agreements that attempt to silence workers about harassment or discrimination will be void, and whistleblowers who raise concerns about sexual harassment will benefit from strengthened protections.
Large employers will also be required to produce action plans addressing gender pay gaps and menopause support.
Stronger Enforcement and the Fair Work Agency
To ensure these rights are more than words on paper, the Act establishes the Fair Work Agency (FWA), launching in April 2026.
The FWA will bring together enforcement of:
- National Minimum Wage
- Holiday pay
- Agency worker protections
- Action against labour exploitation
It will have enhanced powers, including the ability to bring tribunal claims on behalf of workers. In addition, the time limit for bringing most Employment Tribunal claims will increase from three months to six months.
What Employers in England Should Do Now
The Employment Rights Act 2025 will affect contracts, policies, payroll, management practices, and risk exposure across nearly every sector.
Forward-thinking employers should now:
- Review employment contracts and policies
- Audit dismissal, redundancy, and consultation processes
- Prepare managers through targeted training
- Plan for increased costs linked to SSP and redundancy awards
- Seek tailored HR and employment law guidance
How Park City Consulting Can Help
At Park City Consulting, we support employers through periods of significant legislative change with clear, practical advice. Our services include:
- HR consultancy and retained HR support
- Employment law reviews
- Policy reviews and compliance audits
- Redundancy and restructuring support
- Manager training
- Fully outsourced HR solutions
Contact us today to prepare for the Employment Rights Act 2025 and ensure your organisation is compliant, confident, and ready for what comes next.