The Biggest Shake-up in a Generation
The Employment Rights Act 2025, with changes rolling out across 2026 and 2027, is being described as the most significant overhaul of UK employment rights in decades. These are not small adjustments — they represent a major shift in how employers must approach fairness, process and people risk.
Whether you employ one person or several hundred, run a business, lead an HR function or set company strategy, this is not simply a compliance exercise. It is about future-proofing your organisation and avoiding potentially significant financial and reputational damage.
So, What’s Changing?
There are more than 28 significant changes to current employment law (excluding secondary legislation). Below are some of the most important developments businesses should be preparing for.
April 2026
- Day-one right to Statutory Sick Pay (SSP), removing the current three waiting days.
- Day-one right to paternity leave, removing the requirement for 26 weeks’ service.
October 2026
- Employers will be liable for sexual harassment of employees by third parties, such as customers, suppliers or contractors.
- Tribunal time limits extend from three months to six months, giving employees a longer window to bring claims. This applies to incidents occurring from April 2026 onwards.
- Businesses must inform employees of their right to join a trade union.
- Employers must consult workers every three years on how workplace tips are distributed.
January 2027
Several major changes take effect:
- Fire and rehire restrictions
Dismissing employees and re-engaging them on worse terms will be considered automatically unfair, unless the business can demonstrate genuine financial distress. The rules also aim to prevent replacing employees with agency workers or contractors to perform the same work. - Shorter qualifying period for unfair dismissal
The qualifying period will reduce from two years to six months.
In practice, this means anyone employed before July 2026 will qualify automatically in January 2027. - Removal of the statutory cap on tribunal awards
Tribunals will be able to award uncapped compensation based on actual loss, significantly increasing potential employer liability.
Expected During 2027*
(*Further consultation and detail still to follow.)
Additional proposals include:
- Stronger protections for pregnancy and employees returning from maternity leave
- Introduction of statutory bereavement leave
- Rights for zero-hours and low-hours workers to receive guaranteed hours
- Compensation for cancelled shifts and reasonable notice for schedule changes
- Stricter rules for refusing flexible working requests
- Mandatory gender pay gap reporting and menopause action plans (voluntary from April 2026)
- Changes to collective redundancy rules
- Further reforms to trade union recognition and balloting
If HR isn’t your First Language…
The scale of these reforms can feel overwhelming. The key is focusing on practical actions that reduce risk and strengthen your people processes now.
Here are some areas where businesses should start preparing.
Recruitment and Onboarding
Review how new employees enter the business.
- Update job descriptions and person specifications so they reflect current business needs.
- Develop a structured and consistent interview process.
- Standardise the onboarding process for new starters.
- Set clear expectations around performance and probation reviews.
- Be transparent about employment rights and internal support channels from the start.
Building trust early reduces risk later.
Contracts and Job Offers
This is a key area for review.
- Check that standard employment contracts and terms remain fit for purpose.
- Clearly define probation periods and performance expectations.
Going forward, many employment changes will require clear written engagement and a documented business rationale, even where changes appear operational.
Probation Periods and Early Performance Management
Six months is not a long time.
To reduce risk:
- Document all performance conversations carefully.
- Ensure reviews are consistent, fair and timely.
- Provide coaching, interim feedback and improvement plans where needed.
- Train managers to recognise issues around health, disability, behaviour or harassment early and provide appropriate support.
Real-world impact:
Poor documentation or missed probation reviews could significantly increase the risk of employment tribunal claims.
Policies and Procedures
Policies should not simply state compliance — they should explain how the business will comply.
Employers should consider:
- Updating policies to reflect the six-month unfair dismissal protection window.
- Reviewing harassment policies to include the “all reasonable steps” requirement, including risks involving third parties.
- Updating absence policies to reflect changes to Statutory Sick Pay.
Clear policies create consistency and protect both employees and employers.
Leadership and Line Manager Training
The unsung heroes of employment law compliance
Line managers play a critical role in both employee experience and legal risk management.
Training should focus on:
- Handling performance concerns correctly
- Managing difficult conversations professionally
- Recognising and preventing harassment, including from third parties
- Properly documenting decisions and investigations
- Supporting employees with empathy while maintaining fair processes
Managers are often the first point of contact when problems arise, so their capability matters.
Internal Communication and Feedback
Clear communication helps organisations implement change successfully.
Employers should:
- Use multiple communication channels to ensure information reaches everyone.
- Be transparent and invite employee feedback.
- Offer drop-in sessions so staff can ask questions.
- Provide training on sexual harassment awareness and reporting procedures.
Explaining why changes are happening builds trust and reduces resistance.
Looking Ahead to 2027 and Beyond
Businesses should also begin thinking about longer-term workforce strategy.
For example:
- How will the organisation support gender pay gap reporting and menopause action plans?
- How might working patterns change if guaranteed hours become a requirement for zero-hours workers?
- What additional systems or processes will be needed to manage these changes effectively?
Planning early gives organisations time to adapt.
Why Being Proactive Matters
The direction of these reforms is clear: greater accountability, earlier employee protection and stronger enforcement.
The focus is on:
- Proactive engagement
- Clear documentation
- Transparent processes
- Early intervention
Businesses that wait until issues arise may face higher legal costs, reputational damage and significant tribunal awards.
Taking action now can:
- Reduce the risk of costly legal disputes
- Strengthen employee trust and engagement
- Improve employer reputation
- Embed fairness throughout the employee lifecycle
This is not just a compliance exercise. It represents a cultural and operational shift in how organisations manage their people.
Proactively Leading the Change
The Employment Rights Act 2025 is not something businesses can afford to observe from the sidelines. It requires active leadership, clear strategy and thoughtful implementation.
Organisations that act now — reviewing contracts, updating policies, investing in manager capability and improving communication — will be better placed to navigate the changes ahead.
Those that do will not only reduce risk but also create fairer, safer and more productive workplaces.
Change is no longer coming.
It has already begun.
About Karen Robinson
Hi, I’m Karen Robinson, HR Consultant and Business Leader Coach.
I am a great believer that Happy People are Productive People and I help ambitious, SME Leaders to grow their business through their greatest asset – their people.
To learn more, visit: www.kr4hr.com
