Employment Rights Act 2025: Compliance Timeline and Checklist for UK Employers
The Employment Rights Act 2025 is now transforming employment law. For business leaders, this represents the most seismic shift in workplace regulation in a generation.
While the Act received Royal Assent in December 2025, the “grace period” for preparation is rapidly closing. For our clients, the message is clear: the focus must shift from policy discussion to operational readiness as the compliance burden for “Day One” rights is increasing.
This article explains the changes and, crucially, when they will hit your business.
18 February 2026
The Strikes (Minimum Service Levels) Act 2023 was repealed on 18 December 2025. From 18 February 2026 the great majority of the Trade Union Act 2016, will be repealed. Whilst simplifying the requirements on trade unions, the dismissal for taking part in industrial action will become ‘automatically unfair’. This will remove the current 12-week limit for claiming unfair dismissal. For more information, please visit https://www.cartercamerons.com/articles-publications/#articles.
April 2026
The first major set of reforms will take effect in the new tax year. The main ones primarily focus on pay and immediate leave entitlements, however, there is important change to collective redundancy obligations and broadening the scope of whistleblowing.
Statutory Sick Pay (SSP) Overhaul: The three-day “waiting period” is abolished. SSP will be payable from the very first day of illness. Additionally, the Lower Earnings Limit will be removed, extending SSP eligibility to your lowest-paid workers.
Paternity and Parental Leave: Both become “Day One” rights. Employees no longer need 26 weeks of service for paternity leave or one year for ordinary parental leave.
Bereavement Leave: A new right to unpaid leave for all employees, specifically including those suffering pregnancy loss before 24 weeks.
Collective Redundancy: The maximum protective award for failure to consult will double from 90 days’ pay to 180 days’ pay. Later, the “establishment” test will be broadened. This will trigger collective consultation obligations if 20 or more redundancies will be carried out across the entire organisation (rather than just one site) within 90 days.
The Fair Work Agency: A new state enforcement body is set to launch on 7 April 2026 with powers to inspect workplaces and fine employers for breaches of holiday pay, SSP, and the National Minimum Wage. The FWA is aimed at enforcing workers’ rights on heir behalf.
Whistleblowing – strengthening protections for workers who ‘blow the whistle’ on sexual harassment.
October 2026
Third-Party Harassment: Employers will become legally liable for the harassment of their staff by third parties (such as customers or clients) unless they can prove they took “all reasonable steps” to prevent it.
Tribunal Time Limits: The window for employees to bring most claims to an Employment Tribunal will double from three months to six months. This will give the employee more time to complete internal grievance processes but also to prepare their employment tribunal cases.
January 2027
The most contentious element of the Act—unfair dismissal—was delayed by the House of Lords but has now been finalised for a 2027 rollout.
Unfair Dismissal (6-Month Rule): At the moment, during the first two years of employment, an employer can dismiss an employee without a full statutory procedure (provided the reason isn’t discriminatory or “automatically unfair”). Under the new act employees will gain protection from unfair dismissal after six months of service.
Statutory Probationary Period: To balance this, a new statutory probation framework will be introduced. During this initial period, employers will have a “lighter touch” process for dismissal, provided it follows specific government-mandated steps.
Removal of the Compensation Cap: The current cap on unfair dismissal compensatory awards (currently the lower of one year’s pay or a statutory limit of £118,223) is expected to be removed, potentially making claims much more expensive.
Ban on “Fire and Rehire”: Dismissing and re-engaging employees on inferior terms will become automatically unfair unless the employer can prove ‘financial necessity’ to prevent insolvency.
Other changes in 2027
In 2027 we can also expect new protections for zero-hours workers including their right to request a contract reflecting their average hours after 12 weeks of service and a reasonable notice of shifts with a cancellation fee if a shift is cancelled at a short notice.
We expect enhanced dismissal protection for pregnant women and new mothers as well as changes to flexible working law.
What should the Employers do now?
Audit SSP Systems: Ensure your payroll systems are ready for the removal of waiting days by April 2026.
Review Employment Contracts, Employee Handbooks and procedures.
Keep up to date with the changes and their impact on the business, provide training for the managers.
