Changes in Employment Law

Employment Rights Act 2025

The Employment Rights Act 2025 (formerly the Employment Rights Bill) received Royal Assent on 18 December 2025. It is a key pillar of the Government’s ‘Plan to Make Work Pay’, this is aimed at growing the economy, boosting wages, and reducing insecure work.

The plan is to bring our employment rights legislation into the 21st century, extending protections to millions more workers!

Due to the volume of changes this will take place over years 2026-2027, with changes already underway.

Key changes in 2026

The first phase of changes which have taken place centre around Trade Union and industrial action.

The Government worked with Trade Unions in making these rules fairer for all employees moving forward:

• Protection from dismissal for taking part in lawful industrial action has been strengthened, with dismissal in many cases becoming automatically unfair.

• The time needed to give notice of industrial action has reduced to 10 days.

• The ballot thresholds introduced under previous legislation has been simplified.

• Requirements relating to picket supervisors have been removed.

• Industrial action mandates will last for 12 months.

• Industrial action and ballot notices have been simplified.

• Political fund rules have changed.

• Workers taking part in industrial action will be protected against detriment in addition to unfair dismissal. This will occur in October.

Collective Redundancy

From April the maximum ‘protective award’ for failure to consult in collective redundancy is 180 days’ pay.

From 2027 employers will need to consider the total number of redundancies across their whole organisation, not just individual workplaces.

Gender pay gap and menopause action plans

From April employers can voluntarily publish action plans around menopause and gender pay gaps. In 2027 this will become mandatory for employers with 250 or more workers.

Sick pay

Statutory sick pay (SSP) will be paid from the first day of illness, instead of the fourth day.

The lower earnings threshold for eligibility to SSP have been removed.

Paternity leave changes

Paternity leave has become a 'day one right', allowing someone to give notice of leave from the first day of employment.

Ordinary parental leave has also become a day one right.

The restriction on taking paternity leave after shared parental leave has been removed.

Fair work agency and Adult Social care negotiating body

The Fair Work Agency was established in April 2026 to bring together existing enforcement bodies and take on enforcement of other employment rights.

New negotiating body for adult social care, starting in October 2026.

Holiday Records

From April employers must keep records of annual leave and holiday pay. They must keep this information for 6 years.

Sexual Harassment

From October 2024 employers were obligated to take all reasonable steps to prevent sexual harassment in the workplace and from April 2026 any disclosure “whistleblowing” in relation to sexual harassment in the work place will become a qualifying disclosure, which means that they are afforded protection from suffering detriment if they make a relevant qualifying disclosure.

Dismiss and Rehire

Dismissing someone then rehiring them on worse terms and conditions will become an automatically unfair dismissal in most cases. The Government has recently delayed this until January 2027.

Tipping

In October employers will need to consult with workers / representatives before creating a tipping policy

They must update their tipping policy every 3 years

Further trade union rules

A new duty for employers to inform workers of their right to join a trade union

Updated rules on a trade union’s right of access to the workplace

A new right to reasonable accommodation and facilities for trade union representatives carrying out their duties

A new right to time off for union equality representatives to carry out their duties

An updated Code of Practice on trade union recognition

Public sector outsourcing

There will be new measures in place for public sector outsourcing. This is to avoid having different terms and conditions for ex-public sector employees and private sector employees.

Future changes in 2027

• The qualifying period for ordinary unfair dismissal claims is expected to reduce from two years to six months. (expected in January 2027)

• Further protections for pregnancy and maternity return to work.

• New right to statutory bereavement leave.

• Workers on zero-hour contracts will get the right to guaranteed working hours, if wanted, workers will have the right to be paid if a shift is cancelled, moved or cut short by employer. Employers must provide reasonable notice of shifts and changes to shifts.

• If an employer rejects a flexible working request because of a genuine business reason, they will have to state the business reasons for refusal and explain why those reasons apply within the permitted reasons.

• The law will specify what ‘reasonable steps’ means when preventing sexual harassment.

Next Steps

These changes will be coming into effect during the next 2 years; this gives employers time to review existing policies and procedures in place to make sure they are still compliant, certain contracts like Zero Hour will also need to be reviewed.

This comes with a new reform for the Employment Tribunal, the limitation period for many Employment Tribunal claims is expected to increase from three months to six months. This will come into force in October 2026, giving workers even more rights!

Many provisions of the Act require secondary legislation and guidance before taking effect, and implementation dates may change.

We are on hand to assist with reviewing any policies, contracts etc that may need amending in light of these changes.

Contact our expert Employment solicitors for all your employment needs. We support both Employers and Employees.