The Employment Rights Act 2025: A Complete Guide
The Employment Rights Act 2025 introduces some of the most significant changes to UK employment law in decades. The Act strengthens employment rights across a wide range of areas, including unfair dismissal, trade union activity, statutory sick pay and protection against sexual harassment.
These reforms are being introduced in stages throughout 2026 and 2027, with key changes already implemented. Employers need to act now to understand how these updates to employment legislation will affect their organisation, their workforce and their legal obligations, as the impact is designed to be wide-reaching and affect how businesses manage employees at every level.
JMW helps employers stay ahead of these changes. Our employment law specialists work closely with businesses to review employment contracts, update policies and procedures, and implement practical strategies that align with the new legal framework. By taking a proactive approach, we help you reduce risk, maintain compliance and make confident decisions as the new employment rights landscape develops.
What Is the Employment Rights Act 2025?
The Employment Rights Act 2025 is a major piece of employment legislation that introduces wide-ranging reforms to employment rights across England and Wales. It forms the legislative foundation of the government’s New Deal for Working People and is designed to strengthen statutory rights, improve job security and reshape the balance between employers and employees.
The Act builds on existing frameworks set out in earlier legislation, including the Employment Rights Act 1996 and the Equality Act, but significantly expands the scope of protection available to employees. In particular, it introduces reforms to the laws governing unfair dismissal, trade union rights, statutory sick pay, family leave and workplace protections such as the duty to prevent sexual harassment.
A key feature of the Employment Rights Act 2025 is its focus on enforcement. The introduction of the Fair Work Agency marks a shift towards more active oversight of employment law compliance, with increased scrutiny on how employers meet their legal obligations. This reflects a broader move towards ensuring that employment rights are not only clearly defined, but consistently upheld in practice.
The changes introduced by the Act are being implemented in phases between 2025 and 2027. This staggered approach gives employers time to adapt, but it also means that businesses must stay alert to ongoing developments. Understanding how each stage of the reforms affects your organisation is essential to maintaining compliance and managing risk effectively.
We work with employers to interpret these legislative changes in a practical, commercially focused way. By translating complex employment law reforms into clear, actionable steps, we will help you adapt your policies, processes and workforce strategies with confidence as the Employment Rights Act 2025 is rolled out.
The Key Employment Rights Act 2025 Changes at a Glance
The Employment Rights Act 2025 introduces a wide range of reforms that will reshape how employers manage their workforces and comply with employment law. Below is an overview of the most important changes that businesses need to be aware of.
Unfair dismissal reforms
The qualifying period to claim unfair dismissal will be reduced, from 2 years to 6 months of continuous employment. This will significantly increase the number of employees who can bring unfair dismissal claims and require employers to ensure every dismissal follows a fair procedure and is supported by a fair reason.
Employment tribunal time limits extended
Changes to employment tribunal rules will extend the time limits for bringing certain claims, including unfair dismissal claims. This increases the potential for disputes and requires employers to maintain clear records and processes.
Increased trade union rights
Changes to trade union legislation will make it easier for unions to achieve statutory recognition and strengthen the rights of trade union representatives and trade union members. Employers will need to be prepared for increased engagement around union membership, industrial action and collective bargaining.
Changes to collective redundancy obligations
Reforms to collective redundancy consultation rules will affect when obligations are triggered and increase the maximum protective award where an employer is found to have failed to comply. This raises the stakes for employers managing restructuring processes involving affected employees.
Enhanced duty to prevent sexual harassment
Employers will face stricter legal obligations to prevent sexual harassment in the workplace, including liability for third-party harassment. These changes build on the Equality Act and require businesses to take proactive steps to reduce risk.
Statutory sick pay reforms
Statutory sick pay has become a day one right for eligible employees, with the removal of the lower earnings limit and waiting days. This change expands access to statutory payments and increases employer responsibilities from the outset of employment.
Family rights and flexible working
Reforms to paternity leave, unpaid parental leave and flexible working will strengthen employee rights and introduce greater expectations around how employers manage flexible working requests and support working parents.
Introduction of the Fair Work Agency
A new Fair Work Agency has been established to enforce employment rights and ensure compliance with employment legislation. This marks a shift towards more active enforcement and greater scrutiny of employer practices.
Fire and rehire restrictions
New statutory restrictions will limit the use of fire and rehire practices. Employers will need to follow a fair procedure and demonstrate that changes to employment contracts are justified and reasonable in all the circumstances.
Additional workplace reforms
Further changes include developments in areas such as holiday pay, whistleblowing protections, zero-hours and low-hours contracts, and measures linked to the gender pay gap and national minimum wage. Together, these reforms strengthen statutory rights and increase expectations on employers across all areas of employment law.
Timeline of Employment Law Changes (2025-2027)
The Employment Rights Act 2025 is being introduced in stages between 2025 and 2027. Employers should be aware of the key dates below and plan ahead to maintain compliance as each phase takes effect.
December 2025: Employment Rights Act 2025 becomes law
- The Act becomes law, setting out the framework for major employment law reforms
- The Strikes (Minimum Service Levels) Act 2023 is repealed
February 2026: Trade union and industrial action reforms
From February 18th 2026:
- Trade union laws are simplified, including rules around industrial action
- Protections are strengthened for employees taking part in industrial action
- Employees can begin giving notice for new ‘day one’ family leave rights
April 2026: Early structural changes
From April 1st 2026:
- The levy paid by trade unions and employer organisations is removed
April 2026: First wave of major employment law reforms
From April 6th 2026:
- Redundancy consultation penalties increase significantly, doubling the maximum protective award for failing to meet collective consultation obligations
- Paternity leave and unpaid parental leave become available from day one
- Statutory sick pay becomes payable from the first day of absence
- Whistleblowing protections are extended to cover sexual harassment as a qualifying disclosure
- A new form of paternity leave is introduced for bereaved partners
- The trade union recognition process is simplified
April 2026: Fair Work Agency introduced
From April 7th 2026:
- A new enforcement body, the Fair Work Agency, is established
August 2026: Trade union balloting changes
- Electronic and workplace voting is introduced for trade union ballots
October 2026: Expanded workplace protections and union rights
From October 2026:
- Employers must inform workers of their right to join a trade union
- Trade unions gain greater access to workplaces
- Protections for employees involved in industrial action are strengthened
Workplace protections:
- Employers must take “all reasonable steps” to prevent sexual harassment
- Employers can be liable for harassment by third parties
Late 2026: Employment tribunal and sector-specific changes
From late 2026:
- Time limits for bringing employment tribunal claims are extended (no earlier than October 2026)
- Sector-specific rules, such as the Seafarers’ Charter, are introduced (December 2026)
January 2027: Key employment rights reforms
From January 2027:
- The qualifying period for unfair dismissal is reduced to six months
- The cap on unfair dismissal compensation is removed
- Restrictions on fire and rehire practices are introduced
2027 and beyond: Further employment law reforms
Additional reforms expected throughout 2027 include:
- Stronger protections for pregnant employees and new mothers
- New rights for workers on low or variable hours contracts
- Changes to flexible working rules
- New rights to guaranteed hours and reasonable notice
- Expanded protections in areas such as bereavement leave and blacklisting
The phased rollout of the Employment Rights Act 2025 means employers must continue to review and update their approach to employment law as new measures are introduced.
Breaking Down the Key Employment Law Reforms
The Employment Rights Act 2025 introduces detailed changes to employment legislation that directly affect employer obligations, employee rights and how workplace issues must be managed in practice.
Unfair dismissal and increased employee protections
The Employment Rights Act 2025 significantly expands access to unfair dismissal protections.
The current requirement for two years of continuous service to bring an ordinary unfair dismissal claim will be reduced to six months. This means employees will be able to claim unfair dismissal much earlier in their employment.
In addition, dismissal for taking part in industrial action is now classified as automatically unfair, removing previous restrictions on when a claim for unfair dismissal could be brought in these circumstances.
Employers must continue to demonstrate a potentially fair reason for dismissal and show that they acted reasonably in all the circumstances, in line with the Employment Rights Act 1996. However, with more employees eligible to bring unfair dismissal claims, there is a significantly increased risk of claims where procedures are not followed correctly.
Trade union rights and industrial action
The Employment Rights Act 2025 strengthens trade union rights and reforms the statutory recognition process.
From April 2026, the process for statutory recognition of a trade union is simplified, making it easier for trade union representatives to gain recognition for a proposed bargaining unit. This increases the likelihood of formal collective bargaining arrangements being established.
Changes have also been made to industrial action rules, including the removal of minimum service level requirements and increased protection for trade union members participating in industrial action.
These reforms are expected to increase trade union activity, strengthen labour relations and require employers to engage more closely with trade union representatives and union equality representatives.
Collective redundancy and consultation obligations
The Act introduces important changes to collective redundancy obligations, particularly in relation to consultation and financial penalties.
From April 6th 2026, the maximum protective award for failing to comply with collective consultation obligations increased from 90 days’ pay to 180 days’ pay per affected employee. This significantly increases the cost of non-compliance.
The rules around triggering collective redundancy obligations are also being clarified, meaning employers must carefully assess when consultation requirements apply, particularly where redundancies are proposed across different parts of a business.
Employers must:
- Inform workers and begin consultation at the correct stage
- Comply with collective redundancy consultation requirements
- Meet all other legal obligations
Sexual harassment and workplace responsibilities
The Employment Rights Act 2025 strengthens employer obligations to prevent sexual harassment and expands protections for employees.
Employers will be under a clearer legal obligation to take reasonable steps to prevent sexual harassment in the workplace, including harassment by third parties such as clients or customers.
In addition, sexual harassment is now classified as a qualifying disclosure under whistleblowing protections. This means employees who report sexual harassment may be protected from detriment or dismissal under protected disclosure rules.
These changes build on the Equality Act and increase the importance of having effective policies, reporting procedures and preventative measures in place.
Statutory sick pay and family rights
Reforms to statutory sick pay and family rights significantly expand access to statutory rights from the start of employment.
From April 6th 2026:
- Statutory sick pay becomes payable from the first full day of sickness absence
- The lower earnings limit and waiting days are removed
- More employees become eligible for statutory payments
In addition, paternity leave and unpaid parental leave become day one rights, allowing eligible employees to take leave without a qualifying period. This includes provisions such as bereaved partner’s paternity leave.
These changes require employers to update policies, payroll systems and processes to reflect expanded entitlement from the outset of employment.
The launch of the Fair Work Agency and enforcement of employment rights
The Fair Work Agency has been introduced to strengthen the enforcement of employment rights across multiple areas of employment law.
From April 7th 2026, the Agency has been granted powers to enforce statutory rights relating to pay, working conditions and compliance with employment legislation. This includes oversight of areas such as statutory sick pay, holiday pay and other statutory payments.
The creation of a single enforcement body increases the likelihood of investigations where employers fail to meet their legal obligations and represents a shift towards more proactive regulation.
Fire and rehire restrictions
The Employment Rights Act 2025 introduces statutory restrictions on the use of fire and rehire practices.
Employers will be required to demonstrate that changes to employment contracts are necessary and that a fair procedure has been followed. This includes showing that reasonable alternatives have been considered and that the approach is justified in all the circumstances.
These reforms limit the ability of employers to impose contractual changes unilaterally and increase the importance of consultation and agreement when making changes to employment contracts.
Employment tribunal changes and time limits
Changes to employment tribunal rules extend the time limits for bringing certain claims, including unfair dismissal claims.
This gives employees a longer period to bring claims and increases the potential volume of employment tribunal cases.
Employers must:
- Maintain accurate records
- Follow fair procedures
- Be prepared to respond to claims within extended timeframes
These changes reinforce the importance of compliance with employment law and effective dispute management processes.
Additional Recent Employment Law Changes to Account For
Alongside the headline reforms introduced by the Employment Rights Act 2025, there are several additional changes to employment law that employers need to consider as part of their wider compliance strategy.
Flexible working reforms
Flexible working reforms strengthen the rights of eligible employees to make a flexible working request from the start of employment.
Employers will be required to:
- Consider requests more actively
- Respond within set timeframes
- Provide clear business reasons if requests are refused
These changes increase expectations around workplace flexibility and require employers to ensure that decision-making processes are consistent and well-documented.
Zero-hours and low-hours contracts
New provisions will introduce greater protections for workers on zero hours and low-hours contracts.
Workers who regularly work consistent hours over a defined period may gain the right to request a guaranteed hours contract. This reduces reliance on variable-hours arrangements and creates additional obligations for employers to review working patterns.
Holiday pay and statutory payments
The Act strengthens enforcement of statutory payments, including holiday pay, through increased oversight and regulatory powers.
Employers must ensure that:
- Holiday entitlement is calculated correctly
- Statutory payments are made in line with legal requirements
- Any deductions are compliant with employment law
The involvement of the Fair Work Agency is expected to increase scrutiny in this area.
Whistleblowing protections
Whistleblowing protections are expanded to strengthen the rights of employees who make a protected disclosure.
In particular:
- Sexual harassment is now recognised as a qualifying disclosure
- Employees are protected from detriment or dismissal where they report wrongdoing
Employers must ensure that appropriate reporting channels are in place and that concerns are handled in line with legal requirements.
Gender pay gap and pay transparency
The reforms place greater emphasis on addressing the gender pay gap and improving transparency around pay.
While some measures may be introduced through separate legislation, employers should be aware of increasing expectations around:
- Monitoring pay structures
- Reporting obligations
- Demonstrating fair and equal pay practices
National minimum wage and enforcement
Changes to enforcement mechanisms will increase scrutiny of compliance with the national minimum wage.
Employers should ensure that:
- Pay practices align with legal requirements
- Workers are correctly classified
- Records are maintained to demonstrate compliance
What Do These Employment Law Changes Mean for Employers?
The Employment Rights Act 2025 changes the level of risk, scrutiny and expectation placed on employers across all areas of employment law:
Increased risk of employment tribunal claims
With the reduction in the qualifying period for unfair dismissal and the planned introduction of day one rights, more employees will be able to bring unfair dismissal claims.
Combined with extended employment tribunal time limits, this increases the likelihood of claims being brought and requires employers to ensure that all processes are compliant from the outset of employment.
Higher financial exposure
Changes to collective redundancy obligations, including the increase in the maximum protective award, significantly raise the cost of non-compliance.
Employers may also face greater financial exposure through:
- Increased volume of unfair dismissal claims and removal of the statutory cap on compensation
- Expanded access to statutory payments
- Greater enforcement of employment rights
Greater regulatory scrutiny
The introduction of the Fair Work Agency signals a move towards more active enforcement of employment legislation.
Employers can expect increased oversight in areas such as:
- Statutory sick pay
- Holiday pay
- National minimum wage
- Wider compliance with statutory rights
This makes it more important than ever to align internal processes with legal requirements.
Stronger employee rights and expectations
The expansion of employment rights, including flexible working, family leave and whistleblowing protections, will change employee expectations around how they are treated in the workplace.
Employers will need to:
- Respond more carefully to flexible working requests
- Manage workplace issues such as sexual harassment proactively
- Implement policies that reflect current legal standards
Impact on workforce planning and business strategy
These reforms will affect how businesses:
- Structure their workforce
- Manage change and restructuring
- Approach hiring, probation and dismissal
The move towards earlier unfair dismissal protection, in particular, means that decisions made at the start of employment carry greater legal significance.
The need for a proactive approach
The phased introduction of the Employment Rights Act 2025 means that employment law will continue to evolve over time.
Employers that take a proactive approach - reviewing contracts, updating policies and training managers - will be better placed to manage risk and adapt to ongoing change.
We support businesses by identifying where these changes create risk and implementing practical solutions that ensure compliance while supporting commercial objectives.
How Can JMW Help?
We work with employers to turn complex employment law changes into clear, practical actions that protect your business and support your workforce.
We take a commercial, solutions-led approach, helping you implement changes in a way that aligns with your business objectives while ensuring compliance with the Employment Rights Act 2025 and wider employment legislation.
Our employment law specialists provide:
- Reviews and updates of employment contracts and policies
- Advice on managing unfair dismissal claims and employment tribunal risk
- Support with collective redundancy and consultation obligations
- Guidance on trade union engagement and labour relations
- Practical solutions to help you prevent sexual harassment and manage workplace issues
Talk to Us
The Employment Rights Act 2025 represents a major shift in employment law, and preparing early will enable you to manage risk and adapt with confidence.
We provide clear, practical guidance to help employers understand their legal obligations and implement the changes required at each stage of the reforms.
To discuss how these changes affect your business, contact our employment law team today on 0345 872 6666, or get in touch to arrange a consultation.