Hailed as the biggest modernisation of employment rights in this generation, the Employment Rights Bill received Royal Assent on 18 December 2025, becoming the Employment Rights Act 2025.
A Quick Reminder of the Key Provisions:
1. Unfair Dismissal
The qualifying period for unfair dismissal claims reduces to six months from two years. The cap on compensation will also be removed.
2. Statutory Sick Pay (SSP)
The 3-day waiting period will be abolished, meaning SSP will be payable from day 1 of absence. SSP will be paid either at 80% of earnings for those earning under the lower earnings threshold or at the flat rate, which is currently set at £118.75 per week.
3. Fire & Rehire
Dismissals for changing core terms such as pay or hours will automatically be unfair (subject to limited exceptions).
4. Zero-hours contracts
Minimum hours will be guaranteed. Employers will also have to provide advance notice of shifts and provide compensation if shifts are cancelled at short notice.
5. Flexible Working & Family Leave
An enhancement of paternity and maternity rights along with an expansion to bereavement leave. Any refusal of flexible working arrangements must be on reasonable grounds.
6. Harassment & Whistleblowing
Employers’ duty to prevent sexual harassment will be enhanced as well as broadening protections relating to whistleblowing disclosures.
7. Collective Redundancy & Trade Unions
The maximum protective award for failure to consult will double from 90 to 180 days’ pay. The Act simplifies union recognition and repeals minimum service level laws.
8. Fair Work Agency
The Act establishes a new enforcement body; The Fair Work Agency, which aims to consolidate various existing functions to cover areas such as National Minimum Wage and worker rights.
We will be discussing the key provisions in more detail and any potential impacts to your business at our Employment Roadshows throughout the year.
Implementation Timeline:
The changes introduced by the Act will be implemented gradually throughout 2026 and 2027, allowing businesses and unions sufficient time to adapt. Currently, the changes are set to roll out as follows:
Early 2026 (February-April)
- Trade Unions
- Family Leave
- Sick Pay
- Collective Redundancy
- Whistleblowing
- Fair Work Agency
Late 2026 (October)
- Fire & Rehire
- Harassment
- Tribunal time limits
- Further Trade Union changes
January 2027 and onwards
- Unfair Dismissal
- Flexible Working & further Family Leave changes
- Zero-hours contracts
- Regulation of umbrella companies
What’s Next?
We anticipate a wave of consultations beginning in early 2026, followed closely by the introduction of secondary legislation. As a priority, businesses should ensure that all contracts, policies, and procedures are updated to reflect these significant changes. This process must also include comprehensive staff training to guarantee compliance and readiness.
If you require support or assistance with the new changes being brought in as a result of the Employment Rights Act, please don't hesitate to contact our highly-experienced employment law team who have a wealth of experience in advising individuals and businesses across all key issues that may arise.
Key Contact
Paul Hennity
Employment Law Partner
Paul is a Partner in our Employment Law team, currently dividing his time between our Chester and Wirral offices.
