The Employment Rights Act 2025 received Royal Assent in December 2025, marking one of the most significant shifts in UK employment law in decades.
While some changes took effect immediately, the real impact will be felt throughout 2026 and into 2027 as new rights come into force, enforcement tightens and expectations on employers increase.
These changes are already altering the risk landscape for employers, not just legally, but operationally and culturally too.
This article looks at what is changing, why it matters and where employers should focus now.
A shift from reaction to prevention
One of the clearest themes running through the Employment Rights Act 2025 is a move away from reactive compliance towards proactive prevention.
Employers are increasingly expected to:
- Anticipate risk
- Evidence good practice
- Demonstrate consistency
- Act early, not after issues escalate
This is particularly evident in areas such as harassment prevention, sickness absence, redundancy consultation and enforcement.
April 2026 and the changes employers will feel first
From April 2026, several changes come into force that have day to day implications for employers.
Statutory Sick Pay is now payable from the first day of illness, and the lower earnings limit has been removed. That means more workers qualify for SSP, absence costs may increase and consistent absence management matters more than ever. Government guidance and business guidance both confirm that these changes took effect from 6 April 2026.
The maximum protective award for failing to properly consult in a collective redundancy situation has also increased from 90 days’ pay to 180 days’ pay per affected employee, significantly increasing the financial risk of getting consultation wrong.
Paternity leave and ordinary parental leave have become day one rights, removing qualifying service thresholds and reinforcing the need for up to date policies, manager awareness and fair, consistent handling of requests.
Disclosures relating to sexual harassment are now treated as protected whistleblowing disclosures, which raises the stakes for how concerns are received, recorded and managed. Read more about out sexual harassment training here.
The Fair Work Agency and a stronger enforcement approach
From April 2026, the Fair Work Agency has been established, bringing together enforcement powers that were previously spread across a number of bodies. Official factsheets describe it as an executive agency of the Department for Business and Trade, with a focus on enforcing employment rights rather than advising employers.
Its focus includes areas such as:
- Holiday pay
- Statutory Sick Pay
- Unlawful deductions from wages
- Agency and umbrella worker protections
Importantly, the Fair Work Agency is concerned with compliance and evidence, not employer intent. That means payroll accuracy, record keeping and alignment between HR and payroll processes are more critical than ever.
October 2026 and a higher bar for employers
Later in 2026, the legal expectations on employers increase again. Government implementation updates confirm that October 2026 is the next major phase.
Restrictions on dismissal and re-engagement, often referred to as fire and rehire, are due to come into force in October 2026. In most circumstances, dismissal and re-engagement on worse terms will become automatically unfair, with only employers facing genuine severe financial distress and following full and fair consultation likely to be able to rely on this route.
The duty on employers to prevent sexual harassment will also be strengthened. Employers will be required to take all reasonable steps, not just reasonable steps, to prevent sexual harassment. That places greater emphasis on training, risk assessments, clear reporting routes, proper investigations and ongoing monitoring. Employers will also become liable for third party harassment unless they can show they have taken all reasonable steps to prevent it.
The time limit for bringing most Employment Tribunal claims is also due to increase from three months to six months in October 2026, extending the window for challenge and increasing the importance of good documentation.
Looking ahead to 2027
Further reforms are expected in 2027, including unfair dismissal protection after six months’ service instead of two years. Official factsheets also confirm that the existing cap on compensatory awards for unfair dismissal will be removed when that package comes into force.
Other 2027 reforms are expected to include new rights for zero hours workers to request guaranteed hours, compensation for cancelled, moved or curtailed shifts at short notice, and changes to the test for refusing flexible working requests.
Taken together, these changes significantly rebalance risk and protection in favour of employees.
What this means in practice for employers
The Employment Rights Act 2025 does not just introduce new rights. It raises expectations.
Employers who are likely to manage this well are those who:
- Invest in clear, up to date policies
- Train managers properly
- Address issues early and consistently
- Keep good records
- Treat culture and prevention as business risks, not HR admin
Those who rely on informal practices, outdated documents or reactive decision making are likely to find themselves exposed more quickly. That is especially true as enforcement increases and the legal window for challenge widens.
Support through the change
For many employers, the immediate priorities are reviewing policies and handbooks, preparing for Fair Work Agency scrutiny, strengthening harassment prevention and reporting, training managers on confident and compliant people management, and reducing risk through better processes and documentation. Those are the areas where preparation now is likely to make the biggest difference later.
The focus should be on practical, proportionate support that helps employers stay compliant while continuing to run the business effectively.
Support through the change
The Employment Rights Act 2025 represents a clear direction of travel.
Employers who prepare early are far more likely to find these changes manageable. Those who wait until issues arise may find the cost, both financial and cultural, significantly higher.
