Employment rights act guide

Employment Rights Act: What you need to know

⚠️ This guide is correct at the date of publishing, but may be out of date when you read it. Always seek legal advice or speak to your HR consultant for up-to-date guidance.

Overview

The Employment Rights Act has been widely described as the “biggest overhaul of workers’ rights in a generation”.  It will bring in sweeping reforms to employment law, affecting all UK businesses.

Where Things Stand Now:

The Employment Rights Bill has now passed. 

It is now the Employment Rights Act 2025.

The information below is based on the current proposed changes as of 18 December 2025.

One thing is clear: significant change is coming.

April 2026

The following will take effect:

Parental & Paternity Leave from Day 1

Summary: Both types of leave will apply from day one of employment.

How to prepare:

• Update policies once they become law.
• Train managers on new entitlements.

Statutory Sick Pay 

Summary: SSP will start from day one and apply to all earners (it will be paid at 80% of earnings for those who earn less than the lower earnings limit).

How to prepare:

• Ensure your payroll system is ready.
• Ensure you have a clear policy that explains how you will manage absence fairly and consistently.

Doubling off the protective award for failure to consult in redundancies

Summary: The maximum protective award for failure to collectively consult will double from 90 days’ pay to 180 days’ pay. This is designed to strengthen enforcement where consultation is required but not done properly.

How to prepare:

• Review redundancy policy, processes, and planning.
• Ensure your managers are trained. 
• Get HR advice when managing redundancies, to ensure you consult effectively.

October 2026

The following will take effect:

Tribunal Claim Time Limits

Summary: Time to bring a claim will increase from 3 to 6 months (except breach of contract).

How to prepare:

• Build awareness of longer risk periods.

Duty to Prevent Sexual Harassment – increased to ALL reasonable steps

Summary: Since October 2024, employers have been under a duty to take reasonable steps to prevent sexual harassment. Having a policy alone will no longer protect you.  This duty is now set to expand to ALL reasonable steps, raising the bar even higher. 

How to prepare:

• Review harassment policies and training.
• Conduct a sexual harassment risk assessment.
• Contact us to find out about our affordable Anti-harassment Compliance Pack and anonymous reporting system.  

Third-Party Harassment

Summary: You will be liable for harassment by a third-party including clients, suppliers, or visitors, unless you took ALL reasonable steps to prevent it.

How to prepare:

• Update anti-harassment policies.
• Include third-party behaviour in staff training
• Carry out a risk assessment.
• Contact us to find out about our affordable Anti-harassment Compliance Pack and anonymous reporting system.

Tipping Rules

Summary: Employers must consult staff on tipping policies and review them every 3 years.

How to prepare:

• Formalise and review your tipping policy.
• Plan staff consultation procedures.

2027

The following will take effect:

Unfair Dismissal - 6-month qualifying period from January 2027 

This will impact new hires from around July 2026 onwards.

Summary: Employees will be able to claim unfair dismissal after six months’ service, not from Day 1 as originally proposed.  Yes, this is a relief, but six months is still a very short time period to thoroughly assess performance, behaviours, and cultural fit, so our recommendations below remain unchanged. 

How to prepare:

• Ensure robust recruitment, onboarding, and probation processes. 
• Consider the length of your probationary period, 6 months will be too late.
• Document, document, document.  Ditch the notepad and use a basic HR system (we can recommend one that is really affordable), don’t risk not having notes if you need to back up a claim.

Fire and Rehire

The government have confirmed this has been pushed back until January 27.

Summary: Dismissals used to force new contract terms will be automatically unfair unless due to serious financial difficulty (which would need to meet the definition and be proven).

How to prepare:

• Update your contracts.
• Add variation clauses.
• Consider removing clauses you may want to change later.

Guaranteed Hours for Zero/Low Hours Staff

Summary: Regular casual workers may need to be offered guaranteed hours based on hours worked over a reference period.  There are proposals to extend the right to agency workers with the end hirer being required to offer the guaranteed hours.

These provisions are extremely complex, and a lot of the ‘meat’ has been reserved for regulations.  We will be keeping a close eye on this one and will keep you posted on developments.

How to prepare:

• Conduct an audit to assess the impact of new laws on your business.  

Flexible Working 

Summary: You will still need a legal reason to refuse flexible working, but once this comes in, it must also be reasonable, and you may be challenged on it.  

How to prepare:

• Update your flexible working policy, when this becomes law.
• Train your managers on how to justify refusals.
• Update templates and decision letters.

Bereavement Leave 

Summary: Bereavement leave for a ‘loved one’ will be available for losses beyond children (which is already in place), with details set in regulations.

How to prepare:

• Policy will need to be updated when this becomes law.
• Ensure your managers are aware.

Reasonable Notice of Shifts

Summary: Zero-hours and agency staff will have the right to reasonable notice of shifts or changes.  There is very little detail in the Employment Rights Bill itself about this new right. Much has been left to separate regulations.

How to prepare:

• Audit how shifts are scheduled and changed.
• Start giving more notice for shift updates.

Right to payment for shifts cancelled, moved or curtailed at short notice

Summary: Cancelled or shortened shifts on short notice may require compensation to staff.   This right extends to agency workers. The responsibility to make payment falls to the agency only, although the payment can be recouped from the end hirer.

How to prepare:

• Avoid short-notice cancellations where possible.
• Review how shift changes are communicated.

Menopause Support Plans

Summary: Large employers (250+) may need to publish a menopause support plan.

How to prepare:

• Consider drafting a menopause policy now (regardless of your business size).
• Review available support and awareness training.

We will continue to monitor developments and update this summary as further details become available.