The Employment Rights Act 2025 received Royal Assent in December 2025 and represents the biggest overhaul of UK employment law in over a decade. The Act will introduce significant changes over the next two years to family rights, sick pay, trade unions, equality at work, collective redundancy, fire and rehire, sexual harassment, unfair dismissal, flexible working, zero/low hours workers’ rights, and enforcement.
2026 is shaping up to be an impactful year for employers and employees in the UK.
Which Employment Rights Act 2025 changes take effect in 2026?
Family and sick leave
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- Paternity leave and unpaid parental leave will become day one rights
- The lower earnings limit and the 3-day waiting period for Statutory Sick Pay will be abolished
Trade union rights
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- Trade union rights will be strengthened, including relaxed strike ballot and notice requirements, repealed minimum service levels during industrial action, simplified recognition process for trade union, and employer’s new duty to inform employees of their right to join trade union
Harassment and discrimination protections
- The duty to take reasonable steps to prevent sexual harassment at work will be further strengthened. There will be whistleblowing protection for sexual harassment disclosures. Confidentiality provisions and NDAs cannot be used to stop employees from speaking out about discrimination or harassment. And employers can also be held liable for harassment by third parties
Redundancy and restructuring
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- The maximum protective award for failure to follow collective redundancy consultation requirements will be doubled, increasing from 90 days to 180 days of pay for each affected employee
- Fire and rehire will be restricted to cases of financial difficulties which are affecting the employer’s ability to continue the business as a going concern and the change could not be reasonably avoided
Which Employment Rights Act 2025 changes are expected in 2027?
Other changes under the Act, such as the reduction of the unfair dismissal qualifying period from two years to six months, mandatory requirement for large employers to produce action plan to address gender pay gap and assist with menopause, guaranteed hours and shift notice for zero hour/casual workers, new requirements for refusing a flexible working request, additional threshold for collective redundancy based on the number of redundancies across the entire employing entity rather than at a single site or establishment etc. are expected to be implemented in 2027.
Which other employment law reforms are coming to the UK?
Alongside the Employment Rights Act 2025, there are also other employment law reforms in the pipeline including ethnicity and disability pay gap reporting for large employers, single worker status, the extension of bereavement leave to cover other family bereavements, etc.
How should UK employers prepare for the Employment Rights Act 2025?
Close monitoring
Watch out for regulations on these changes which would contain further details of the requirements.
Proactive compliance planning
Start reviewing and updating the existing HR policies and procedures, in particular the policies on sick pay, paternity leave and unpaid parental leave, the anti harassment policy, the whistleblowing policy, and the NDA.
Be also prepared for the anticipated changes beyond 2026, which would involve auditing the existing template employment contracts, the disciplinary procedure, the probationary period policy, the redundancy policy, flexible working policy and so on.
Organize training for the HR team, the line managers and employees on the new legislations and the changes made to the policies and procedures.
Budget
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- Higher sick pay cost due to the removal of the lower earnings limit and waiting period for Statutory Sick pay.
- Possible increase in Tribunal claims due to the extension of time limit for Tribunal claims
How can HSP Group help with UK employment law compliance?
HSP Group provides global expansion management solutions. Our team of seasoned international HR consultants can help organizations navigate this constant evolving employment law landscape. We can keep you up to date with the latest legal developments, audit and update your existing HR policies and procedures, support the implementation and employee communications, and assist with any other HR needs of the organization. We help our clients ensure ongoing compliance, reduce risk, and give you the confidence to focus on growing your business.
