The Employment Rights Bill has finally become the Employment Rights Act 2025 (ERA 2025), receiving Royal Assent on 18 December after a rather turbulent ride through Parliament. It will come into force in stages over the next two years as many of its provisions will require secondary regulations. The Government has outlined indicative timings in its July 2025 implementation Roadmap.
While most of the ERA 2025's provisions will take effect on commencement dates in April and October each year one of the key changes in relation to unfair dismissal will come into force on 1 January 2027. From this date the qualifying period required by an employee to make an unfair dismissal claim will be reduced from two years to six months. The ERA 2025 also provides for the compensation cap for tribunal awards for unfair dismissal, to be removed. Currently the cap is 52 weeks' pay or £118,233, whichever is lower. The implications can already be felt; an employee hired now will gain unfair dismissal rights with effect from 1 January 2027. Employers should ensure that they are using probationary periods and refreshing performance management procedures to accommodate the shorter time frame the ERA 2025 introduces. Employee rights to make other types of dismissal claims, such as for unlawful discrimination remain unchanged.
We set out below the likely timeline for the changes which are expected to happen in February and April 2026, with much of the detail still to be fleshed out in regulation, and after consultation.
18 February 2026 – reform of trade union laws
Changes to trade union legislation will take place two months after the Employment Rights Bill became law.
Increased dismissal protection for industrial action
The current 12-week limit for claiming unfair dismissal from the start of the industrial action will be removed. Dismissal for taking part in industrial action will become automatically unfair at any time.
Trade union activity
- time required to give notice of industrial action will reduce to 10 days from 14 days
- obligations relating to supervision of picketing will be removed
- an industrial action mandate will be extended from six to 12 months
- information on ballot papers and notice of industrial action will be simplified
- there will be changes to political fund rules.
Action by employers: ensure constructive relations with staff and unions, review processes for handling industrial action, and provide staff with training on rights of trade unions and their members.
6 April 2026 – Employment Rights Act 2025 changes
The Government's implementation roadmap indicates that the following provisions will come into force in April 2026.
Day one paternity leave and unpaid parental leave and flexibility on timing of paternity leave
Paternity leave: Currently fathers are required to have 26 weeks' continuous service to take paid paternity leave.
Unpaid parental leave: Employees with a child under 18 must have one years' continuous service to take unpaid parental leave
These requirements will be removed by the ERA 2025 so they will become "Day 1" rights.
Paternity leave and shared parental leave: The ERA 2025 will remove the restriction on taking paternity leave after paid shared parental leave. Enabling parents to take their paternity leave and pay after their shared parental leave and pay will provide partners more flexibility in when they take their leave.
These new rules will apply in relation to babies born on or after 6 April 2026 or whose expected week of birth is on or after that date but are born early. For adoption, they will apply to placements on or after that date.
Additionally, new legislation came into force on 29 December 2025 creating a new right to Bereaved Partner's Paternity Leave which will provide up to 52 weeks leave for fathers and partners whose partner dies before their child's first birthday.
Action by employers: amend family leave polices to reflect the new entitlements to leave and be prepared for greater awareness and uptake going forward.
Doubling the maximum period of collective redundancy protective award
Where there is a failure by the employer to properly inform and consult on collective redundancies involving 20 or more employees an employment tribunal can award a protective award up to a maximum of 90 days' gross pay. This financial compensation will increase to a new maximum of 180 days' gross pay.
Action by employers: review current approach to collective consultation, when the statutory requirements apply and ensure managers are aware of their obligations to minimise risk.
Removal of the lower earnings limit and waiting period for Statutory Sick Pay (SSP)
For the current tax year, employees must be earning £125 per week to qualify for SSP. This lower earnings limit will be removed under the ERA 2025. Employees will be entitled to the current rate of SSP, or 80% of their average weekly earnings if that is lower. Additionally, whereas employees are only currently entitled to SSP from their fourth day of absence after three "waiting days", SSP will be available from the first day of a period of sickness absence.
Action by employers: review policies and contracts and, if relevant, review SSP expenditure, to factor in a greater number of employees being eligible for SSP, and from their first day of absence.
Broadening of whistleblowing protections
The ERA 2025 strengthens protections for whistleblowers. It makes explicit that complaints of sexual harassment will be treated as protected disclosures and workers can benefit from whistleblowing protections against detriment and unfair dismissal.
Action by employers: ensure whistleblowing policies include sexual harassment as being subject of a protected disclosure and consider minimising and preventing risk of harassment, including from third parties
Establishment of the Fair Work Agency (FWA)
The FWA is due to be established in April 2026. It will be a single enforcement body which will incorporate certain existing agencies and be responsible for enforcing rights including national minimum wage, modern slavery breaches, statutory sick pay and holiday pay. It will also have the power to inspect workplaces for compliance, issue notices, impose penalties or bring court proceedings. The timeline for when its enforcement powers will come into effect has not yet been announced.
Action by employers: review policies; audit and ensure clear records of minimum wage and holiday pay for irregular or zero hours workers, and train managers to reduce risk of non-compliance by organisations.
Trade union reform (April 2026)
The ERA will introduce electronic and workplace balloting allowing trade union members to vote electronically.
It will also simplify how a trade union can gain recognition in a workplace by reforming trade union legislation on the recognition process. This includes reducing the requirement from 10% membership at the application stage to a level not lower than 2% and removing the requirement for majority support at the application and removing the 40% support threshold. Protections against unfair practices will be strengthened during the statutory recognition process and the 50% turnout threshold of union members for an industrial action ballot to be valid will be removed.
Action by employers: review and consider improvement of current practices involving employee relations in non-unionised workplaces and cultivate good relations with unions and staff to reduce conditions which could result in industrial action. Consider responding to the Government’s consultation on a draft code of practice on electronic and workplace balloting for statutory trade union ballots, which closes on 28 January 2026.
Equality Action Plans
Although equality action plans won't be mandatory until 2027, from April 2026 employers with 250 or more employees may publish action plans on a voluntary basis. The plans will outline steps to promote gender equality amongst their employees, address the gender pay gap and support employees in relation to the menopause.
Other changes in April 2026
Increase in statutory maternity, paternity, statutory sick pay and national minimum wage rates
From 6 April statutory sick pay will increase from £118.75 to £123.25 per week from 6 April 2026. Statutory maternity, paternity, adoption, shared parental, neonatal care and parental bereavement pay will increase from £187.18 to £194.32 per week from 5 April 2026. The Lower Earnings Limit (LEL) will increase on the same date from £125 to £129.
From 1 April the UK's National Living Wage (for workers aged 21 and over) increase to £12.71 per hour. National Minimum Wage rates are also increasing: apprentice rate and those of 16-17 year olds will be £8.00 an hour and those of 18-20 year olds £10.85 per hour.
The ERA 2025 will introduce further changes in October 2026 and during 2027. If you would like to learn more about these, we will shortly be sending out details of client events exploring the implications of the ERA 2025. These will be a webinar at 16:00 (GMT) on 26 February led by Paul Callaghan, and an in person breakfast seminar on 12 March, led by Helen Farr.
