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Employment Rights Act 2025: The Latest Updates and What UK Employers Need to Do Now
Sarah Marten
The Employment Rights Act 2025 came into force on 18th December 2025 and marks a fundamental shift in UK employment law, introducing wide‑ranging reforms that significantly increase employer obligations while strengthening worker protections.
The first two phases commenced on 6th January and 18th February 2026 and did not make any significant changes. The third and fourth phase of changes came into force on April 1st and 6th with many more impactful measures taking effect throughout 2026 and 2027.
Employers must move beyond awareness and focus on implementation so as to protect their businesses and safeguard from Employment Tribunal claims and financial loss, given the increase of awards to Claimants should employers get this wrong!
This article provides an up‑to‑date overview of the latest key updates under the Employment Rights Act 2025, explaining what has already changed, what lies ahead, and what employers should be doing now to reduce legal risk, protect their business and ensure compliance. From unfair dismissal reform and day‑one employment rights to stronger duties around harassment prevention, sick pay and trade union activity, the direction of travel is clear: greater scrutiny of employer decision‑making, earlier employee protections, and higher exposure for those who fail to adapt.
What are the most significant Employment Rights Act 2025 changes for employers?
The Employment Rights Act 2025 introduces one of the most extensive overhauls of employment law in a generation. Key areas of change include:
- Expansion of day‑one employment rights including parental leave & paternity leave
- Reforms to unfair dismissal and the removal of limits on compensation
- Increased redundancy penalties
- Statutory Sick Pay payable from day one and the removal of the lower pay limits
- Sexual harassment disclosures can now amount to whistleblowing
- Strengthened trade union and industrial action rights including a simplification of the current rules
- Positive obligations on employer to keep records on working time and annual leave, and notifying their employees regarding their right to join a trade union
- Increased enforcement powers through the Fair Work Agency
While some reforms are still subject to consultation, many are already live, and employers are expected to prepare for those yet to come.
How is unfair dismissal changing under the Employment Rights Act 2025?
One of the most important upcoming reforms is the reduction of the unfair dismissal qualifying period from two years to six months, due to take effect in January 2027. At the same time, the statutory cap on unfair dismissal compensation will be removed.
For employers, this represents a significant increase in risk. Decisions taken during probationary periods will be far more vulnerable to challenge, particularly where performance management is informal or poorly documented. Employers should now be reviewing recruitment practices, probation structures and dismissal procedures to ensure decisions can withstand scrutiny much earlier in employment.
Whilst it may appear that this is someway off yet, the new qualification period will apply retrospectively so that employees engaged from July 2026 onwards will be protected. That means employers need to act now to ensure that their probationary periods are shortened if necessary, and that their managers are correctly implementing and documenting probation processes.
What new day‑one employment rights need to be reflected in workplace policies?
From April 2026, the Employment Rights Act 2025 introduces a number of expanded day‑one rights, including:
- Statutory Sick Pay from the first day of absence, with no lower earnings limit
- Day‑one entitlement to paternity leave
- Day‑one entitlement to unpaid parental leave
These changes require immediate updates to contracts, handbooks, payroll systems and manager guidance. Employers who fail to align their policies risk non‑compliance from the outset of employment.
What does the Act mean for sexual harassment prevention and workplace culture?
The disclosing of sexual harassment where it “has occurred, is occurring or is likely to occur” now amounts to a ‘qualifying disclosure’ for Whistleblowing. In addition, the ‘prescribed person’ that such a disclosure can be made to, is likely to cover disclosures made to the press or social media. Businesses will need to ensure they have adequate policies to encourage employees to report such matters internally. In addition, by making sexual harassment a protected disclosure, employers will no longer be able to prevent employees from making such disclosures by settling claims.
In addition to the above, there are further provisions regarding sexual harassment that are due to come into force in October 2026 which will make employers responsible for taking ‘all reasonable steps’ to prevent harassment and will also require them to protect their employees from third party harassment (e.g. from contractors or customers).
How are trade union rights and industrial action changing?
Changes introduced from February 2026 make it easier for trade unions to organise and take industrial action, with shorter notice periods, longer ballot mandates and enhanced dismissal protections for striking workers.
As a result, employers will have less scope to challenge technical defects and a greater need to focus on employee engagement, planning and communication when managing industrial relations.
Employers will also be obliged to notify new employees of their right to join a union. Such a positive obligation is likely to see an increase in both union membership and workforce recognition.
What should employers be doing now?
The Employment Rights Act 2025 is not a future issue, it is an active compliance challenge. Employers should be:
- Auditing contracts, policies and procedures
- Strengthening probation and performance management processes
- Updating sickness absence, family leave and harassment policies
- Training managers on new obligations and increased risk
- Ensuring payroll systems are updated
Early preparation will be critical in managing cost, disruption and litigation exposure as further provisions take effect.
How Bermans can help:
Bermans Employment Team advises employers on navigating complex employment law changes with confidence. Our team can help you assess risk, update documentation and prepare for the evolving requirements of the Employment Rights Act 2025.
Contact Sarah Marten, Solicitor, Employment Team.