Employment Rights Act 2025: A Practical Guide for Employers

The Employment Rights Act 2025 represents one of the most significant changes to UK employment law in recent years. The Act became law on 18 December 2025 and will introduce a wide range of employment law changes during 2026 and 2027.  

For employers, this is not simply a legal update. It also involves understanding how the changes will affect contracts, policies, recruitment, sickness absence, family leave, dismissals, redundancies, harassment prevention, workplace culture and day-to-day management decisions. 

Some changes have already taken effect. Others are due to come into force later in 2026 and during 2027, potentially impacting the labour market. The Government has confirmed that the reforms are being introduced gradually so that employers, businesses and workers have time to plan and prepare.  

This article considers the key issues employers should be aware of and the practical steps businesses can take now to prepare. 

What Is the Employment Rights Act 2025? 

The Employment Rights Act 2025 introduces additions and amendments to existing employment legislation, including the Employment Rights Act 1996. The changes are broad and will affect many areas of the employment relationship, from the start of employment through to dismissal and post-termination disputes.  

The reforms include changes to statutory sick pay, family leave, unfair dismissal, collective redundancy consultation, whistleblowing, sexual harassment, zero-hours arrangements, trade union rights, fire and rehire practices, flexible working and employment tribunal time limits. 

The important point for employers is that the Act should not be treated as a single one-off change. It is a programme of reform being implemented in stages. 

Employers should therefore avoid waiting until every detail has been finalised before taking action. Many businesses will need time to review contracts, policies, handbooks, HR processes and management training. 

Why Should Employers Take the Employment Rights Act Seriously? 

There are several reasons employers should take the Employment Rights Act seriously. 

First, there is the legal risk. The Act will increase employee protections in several important areas. If employers continue to rely on outdated contracts, policies or management processes, this may increase the risk of grievances, disputes and employment tribunal claims. 

Secondly, there is a management risk. Managers may make decisions based on old assumptions about qualifying service, sick pay, family leave, probationary periods, dismissal risks or redundancy obligations. Those assumptions may no longer be safe. 

Thirdly, there is a commercial opportunity. Employers who prepare early can reduce risk, manage change more effectively and demonstrate that they are taking a proactive approach to workplace relations, especially for agency workers. 

Acas has described the Act as a “once-in-a-generation change” to employment law and an opportunity for employers and workers to improve workplace relations and working lives.  

What Has Already Changed? 

A number of changes have already started to take effect. 

From 6 April 2026, key reforms include changes to statutory sick pay, day-one paternity leave and unpaid parental leave, strengthened whistleblowing protection where workers report sexual harassment, and a doubling of the maximum protective award in collective redundancy cases. The Fair Work Agency was also established on 7 April 2026.  

These changes mean employers should already be reviewing their current documentation and practices. 

For example, sickness absence policies should be checked against the new statutory sick pay position. Family leave policies should be updated. Redundancy processes should be reviewed carefully, particularly where collective consultation obligations may arise. Whistleblowing, harassment and grievance policies should also be reviewed to ensure they reflect the new protections. 

Statutory Sick Pay 

One of the key changes is to statutory sick pay. The Government timetable confirms that changes taking effect on 6 April 2026 include removing the lower earnings limit and waiting period for statutory sick pay.  

This is important for employers because sickness absence processes, payroll systems, absence policies and manager guidance may all need to be updated. 

Employers should consider: 

• whether sickness absence policies accurately reflect the current statutory sick pay rules;  

• whether payroll systems have been updated;  

• whether managers understand when statutory sick pay is payable;  

• whether employment contracts or staff handbooks need amendment in light of the new code of pratice;  

• whether absence management procedures remain appropriate.  

This is also a good opportunity for employers to review how sickness absence is managed more generally, including return-to-work meetings, medical evidence, occupational health referrals, reasonable adjustments and long-term absence processes. 

Paternity Leave and Unpaid Parental Leave 

The Government timetable confirms that day-one paternity leave and unpaid parental leave took effect on 6 April 2026.  

This means employers should check whether their family leave policies are up to date. Any policies that still refer to previous qualifying periods may need to be amended. 

Employers should also make sure HR teams and managers understand the changes to the law relating to employment rights. A policy update is useful, but it is not enough if managers dealing with requests are still applying old rules. 

Family leave issues can quickly become sensitive. Employers should ensure that employees are given accurate information and that requests are handled consistently. 

Collective Redundancy Risk 

The Act also increases the risk for employers who fail to comply with collective consultation obligations. 

The Government timetable confirms that, from 6 April 2026, the maximum collective redundancy protective award is doubled. This significantly increases the financial risk where employers fail to collectively consult properly. 

This is particularly important for employers considering restructuring, site closures, cost-cutting exercises, changes to working arrangements or large-scale redundancies. 

Employers should consider: 

• whether proposed dismissals may trigger collective consultation obligations under the new employment rights bill;  

• whether the correct numbers and time periods have been assessed;  

• whether affected employees have been identified properly;  

• whether representatives need to be elected;  

• whether consultation has started early enough;  

• whether proper information has been provided;  

• whether alternatives to redundancy have been genuinely considered.  

Redundancy is already an area where employers can easily make procedural mistakes. Increased protective award exposure makes early legal advice even more important. 

Sexual Harassment and Whistleblowing 

The Act also strengthens protection where workers raise concerns about sexual harassment. The Government timetable confirms that, from 6 April 2026, whistleblowing protection has been strengthened for workers who blow the whistle on sexual harassment.  

Further changes are also due in October 2026, including requiring employers to take “all reasonable steps” to prevent sexual harassment and introducing an obligation on employers not to permit harassment of employees by third parties.  

This is a major issue for employers. 

Employers should not wait until a complaint arises before reviewing their approach. They should consider whether they have: 

• an up-to-date anti-harassment policy;  

• clear reporting channels;  

• manager training;  

• staff training;  

• proper investigation procedures;  

• risk assessments for third-party harassment;  

• clear records of preventative steps taken.  

The wording “all reasonable steps” is important. Employers may need to show not only that they had a policy, but that they took practical steps to prevent harassment. 

Unfair Dismissal and Probationary Periods 

One of the most significant forthcoming changes relates to unfair dismissal. 

The Government timetable confirms that, in January 2027, the unfair dismissal qualifying period will be reduced to 6 months for dismissals from 1 January 2027, and compensatory awards will be uncapped.  

This will have a major impact on how employers manage probationary periods, performance concerns and early-stage dismissals. 

Employers who previously relied on the two-year qualifying period will need to be much more careful. It will become increasingly important to manage probationary reviews properly, document performance concerns, give clear feedback and follow a fair process before dismissal. 

Employers should consider reviewing: 

• offer letters;  

• employment contracts;  

• probationary period clauses;  

• probation extension clauses;  

• performance management procedures;  

• dismissal procedures;  

• manager training;  

• template probation review documents.  

A properly managed probationary period will become much more important. 

Fire and Rehire 

The Government timetable also confirms that fire and rehire protections are due to take effect in January 2027.  

This is relevant where employers are seeking to change terms and conditions of employment and are considering dismissal and re-engagement as part of the process. 

Employers should approach contractual changes carefully. Where changes are needed, businesses should consider whether they can be achieved through agreement, consultation, incentives, phased implementation or alternative proposals. 

Employers should avoid treating fire and rehire as a routine mechanism for changing terms. It is likely to become a higher-risk strategy and should only be considered after careful planning and advice. 

Zero-Hours and Guaranteed Hours 

Further reforms are expected in 2027, including the introduction of the right to guaranteed hours and the right to reasonable notice and short-notice payments.  

This will be particularly important for employers who rely on casual workers, zero-hours arrangements, agency labour, bank staff, shift patterns or flexible staffing models. 

Employers should start reviewing: 

• who is engaged on zero-hours or casual arrangements;  

• whether working patterns are genuinely variable;  

• whether workers are regularly working predictable hours;  

• how shifts are offered and cancelled;  

• whether contracts reflect reality;  

• whether managers understand the risks.  

For some employers, this may require a wider review of workforce planning. 

Flexible Working and Other Future Changes 

The Government timetable also identifies further 2027 reforms relating to flexible working, enhanced dismissal protection for pregnant women and new mothers, bereavement leave including pregnancy loss, regulation of umbrella companies, collective redundancy thresholds, NDAs and industrial relations.  

These changes underline the need for employers to take a structured approach. 

Rather than dealing with each change in isolation, employers should consider a wider employment law compliance review. This may include reviewing staff handbooks, employment contracts, HR templates, manager training and internal processes. 

Policies and Contracts: What Should Employers Review? 

Employers should consider reviewing the following documents: 

• employment contracts;  

• offer letters;  

• probationary period clauses;  

• sickness absence policies;  

• family leave policies;  

• redundancy procedures;  

• disciplinary procedures;  

• grievance procedures;  

• whistleblowing policies;  

• anti-harassment policies;  

• equal opportunities policies;  

• flexible working policies;  

• zero-hours or casual worker agreements;  

• settlement agreement templates;  

• staff handbooks;  

• manager guidance notes.  

The key point is that policies should not simply be legally accurate. They should also be practical and capable of being applied by managers in real workplace situations. 

Training Managers 

Many Employment Rights Act risks will arise because managers do not understand the new rules. 

For example, a manager may mishandle a probationary dismissal, refuse a family leave request, overlook a harassment complaint, apply an outdated sickness absence rule, or begin a redundancy process without recognising collective consultation risk. 

Employers should therefore consider training managers on: 

• probationary period management;  

• performance and dismissal processes;  

• sickness absence;  

• family leave;  

• harassment prevention;  

• whistleblowing;  

• redundancy consultation;  

• contractual changes;  

• record keeping;  

• when to involve HR or take legal advice.  

Training can often prevent problems before they become grievances or tribunal claims. 

Common Mistakes Employers Make 

Employers should be particularly careful to avoid the following mistakes: 

• assuming that the Employment Rights Act is only relevant once every provision has come into force;  

• relying on outdated employment contracts or staff handbooks;  

• failing to update sickness absence and family leave policies;  

• treating probationary dismissals as low risk;  

• failing to document performance concerns during probation;  

• overlooking the increased risk in collective redundancy exercises;  

• failing to train managers on the new rules;  

• assuming a harassment policy is enough without training or practical preventative steps;  

• using fire and rehire without proper consultation and advice;  

• failing to review zero-hours, casual or variable-hours arrangements;  

• waiting until a dispute arises before taking advice.  

Many disputes arise not because an employer intended to breach the law, but because contracts, policies and management practices had not kept pace with legal change, particularly in relation to the employment rights bill. 

Practical Steps for Employers 

Employers should consider taking the following steps now: 

1. Review employment contracts and staff handbooks.  

2. Update sickness absence and statutory sick pay policies.  

3. Check paternity leave, unpaid parental leave and other family leave policies.  

4. Review probationary period clauses and probation review processes.  

5. Train managers on performance management and early-stage dismissals.  

6. Review anti-harassment, whistleblowing and grievance policies.  

7. Consider whether sexual harassment training should be refreshed.  

8. Audit zero-hours, casual and variable-hours arrangements.  

9. Review redundancy procedures and collective consultation risk.  

10. Check whether settlement agreement templates and NDA clauses need updating.  

11. Identify which reforms affect the business most urgently.  

12. Take advice before dismissals, redundancies, contractual changes or sensitive employee relations issues.  

Taking these steps can reduce legal risk and help employers prepare for the Employment Rights Act in a controlled and commercially sensible way. 

How Ronald Fletcher Baker Can Help 

At Ronald Fletcher Baker, our Employment Team can help employers prepare for the Employment Rights Act by carrying out a practical review of existing contracts, policies and HR processes. 

This may include: 

• reviewing and updating employment contracts;  

• updating staff handbooks;  

• preparing new or revised workplace policies;  

• advising on probationary period wording and dismissal procedures;  

• providing manager training;  

• reviewing sickness absence and family leave processes;  

• advising on redundancy and collective consultation;  

• preparing harassment and whistleblowing policies;  

• advising on zero-hours and casual worker arrangements;  

• supporting employers with workplace disputes and employment tribunal claims.  

The most effective approach is to prepare early. Employers who wait until a problem arises may find that their documents, processes and management decisions are already exposed to avoidable risk. 

Conclusion 

The Employment Rights Act 2025 is an issue employers cannot afford to ignore. Handled poorly, the changes may lead to grievances, disputes, increased employment tribunal risk and avoidable management problems. Handled properly, they provide an opportunity for employers to update documentation, improve workplace practices and reduce risk. 

The key for employers is to act early, avoid assumptions and understand which changes will affect their organisation most directly. 

At Ronald Fletcher Baker, our Employment Team advises employers on contracts, workplace policies, dismissals, redundancy, sickness absence, family leave, harassment, whistleblowing and employment tribunal claims. If you require advice on preparing for the Employment Rights Act or reviewing your current employment documents and procedures, we can help you assess the risks and identify a practical way forward.