UK: Employment Rights Act 2025 – Key Reforms, Timeline and Employer Actions | iGlobal Law

The Employment Rights Act 2025 (ERA) became law on 18th December 2025.

While some measures take effect immediately, most require secondary legislation and will be phased in gradually between 2026 and 2027. Employers will therefore need to plan for staged compliance and review their policies, contracts and workforce arrangements carefully.

Overview of Key Changes

Trade Unions and Industrial Relations Reform [Implementation expected in February 2026]

Significant changes include:

Repeal of the Strikes (Minimum Service Levels) Act 2023. [Already in force]
Repeal of most provisions of the Trade Union Act 2016.
Reduced notice period for industrial action (down to 10 days).
Ballot mandate validity extended to 12 months.
Simplified industrial action notice requirements.
A new workplace access framework, where the CAC can mandate union access.
A duty on employers to inform workers of their right to join a union.
Enhanced protections against unfair dismissal and detriment for participating in industrial action.

Family‑Friendly Rights and Sick Pay Reforms [Mostly expected in April 2026]

The ERA significantly expands family‑related and sickness‑related rights:

Day‑one rights to Statutory Sick Pay (SSP), paternity leave and unpaid parental leave.
Unpaid bereavement leave extended to pregnancy loss before 24 weeks. [May be effective in 2027]
SSP reforms including the removal of the lower earnings limit, payment from day one of absence, and pay capped at the lower of the flat-rate SSP (£118.75 per week) or 80% of normal weekly earnings.
Paternity leave and pay now available after shared parental leave.
Enhanced protection from redundancy for pregnant employees and for six months post‑maternity leave.
Strengthened flexible working regime, requiring employers to clearly explain and justify refusals.

Enforcement and Compliance: The Fair Work Agency [Expected in April 2026]

A major structural reform is the creation of the Fair Work Agency (FWA), , with powers to:

Enforce national minimum wage compliance.
Regulate employment agencies and gangmaster licensing.
Act against serious labour exploitation.
Enforce holiday pay obligations.
Issue civil penalties, bring tribunal claims and share information across regulators.

The ERA also introduces:

Six‑year record‑keeping duties for annual leave and holiday pay.
Financial penalties for non‑compliance with new record‑keeping obligations.

Discrimination and Workplace Protections [Expected in October 2026]

The ERA strengthens the UK’s discrimination and harassment framework by:

Introducing a statutory duty on employers to take all reasonable steps to prevent sexual harassment, including by third parties.
Empowering regulations to define what “reasonable steps” means.
Ensuring whistleblowing protection explicitly covers disclosures about sexual harassment.
Requiring large employers to publish action plans on: gender pay gap reduction and menopause support measures.
Rendering non‑disclosure agreements unenforceable if they seek to prevent disclosures of harassment or discrimination.

Zero Hours, Low Hours and Agency Worker Contracts [Expected in 2027]

The ERA introduces:

Guaranteed hours offers after each reference period (expected to be 12 weeks).
Reasonable notice of shifts and fair compensation for short‑notice cancellations.
Extended protections for agency workers, with aligned rights and anti‑avoidance provisions.
New Employment Tribunal remedies for breach of these duties.

Unfair Dismissal [Expected in 2027]

Two major reforms:

Qualifying period reduced to six months.
Removal of the compensatory award cap.

Other Key Measures

Fire and rehire dismissals for refusing certain contractual changes will be automatically unfair unless the employer faces severe financial difficulty. [Expected in October 2026]
Collective redundancies: new dual threshold, meaning consultation may be triggered either at a single establishment (20+ redundancies) or across the organisation (threshold to be set in secondary legislation); protective award maximum rises to 180 days. [Expected in 2027]
Employment tribunal time limits extended from three to six months. [Expected in October 2026]
Review of time off for public duties obligations.
Strengthened tipping protections, requiring consultation on tipping policies and mandatory reviews every three years. [Expected in October 2026]

Summary of Implementation Timeline

18th December 2025 – ERA became law; repeal of Strikes (Minimum Service Levels) Act.

By February 2026 – Industrial action reforms expected.

April 2026 – Establishment of the FWA; SSP and family leave reforms; increase to protective awards; electronic balloting; expanded union recognition rights.

October 2026 – Fire and rehire reforms; extended tribunal limitations; sexual harassment duty; expanded union rights; tipping rules.

2027 – Six‑month unfair dismissal qualifying period; compensation cap removal; zero/low‑hours reforms; flexible working changes; bereavement leave; collective redundancy reforms.

Practical Considerations for Employers

Employers should now:

Audit workforce arrangements to assess use of zero‑hours, low‑hours and agency workers.
Review family leave policies, sickness absence rules and redundancy procedures.
Update flexible working policies and ensure refusal processes are robust and evidence‑based.
Review NDAs, whistleblowing channels and anti‑harassment frameworks.
Strengthen record‑keeping systems, especially for holiday pay.
Provide training for HR, managers and supervisors on new rights and obligations.
Monitor consultations on guaranteed hours, shift notice, compensation mechanisms and electronic balloting.

This is a high-level general update only. Legal advice should be obtained on specific circumstances.