{"id":347596,"date":"2026-01-02T05:35:29","date_gmt":"2026-01-02T05:35:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/347596\/"},"modified":"2026-01-02T05:35:29","modified_gmt":"2026-01-02T05:35:29","slug":"uk-employment-rights-act-2025-major-reforms-for-uk-employment-law-employee-rights-labour-relations","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/347596\/","title":{"rendered":"UK Employment Rights Act 2025: Major Reforms For UK Employment Law – Employee Rights\/ Labour Relations"},"content":{"rendered":"

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\n The UK Employment Rights Act 2025 (the “ERA 2025”) has now received Royal Assent. \n <\/p>\n


\n United Kingdom
\n Employment and HR \n <\/p>\n


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\n within Environment topic(s)
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The UK Employment Rights Act 2025 (the “ERA
\n2025”) has now received Royal Assent. The ERA 2025
\nwill introduce the most significant changes to UK employment law in
\nover a decade. The reforms will affect all organisations with UK
\nstaff and will require changes to employment documentation,
\npolicies, and processes in the coming months.<\/p>\n

The key changes and the practical steps employers should
\nconsider are as follows:<\/p>\n

Unfair dismissal risk and compensation<\/p>\n


\nThe qualifying period for unfair dismissal will reduce from two
\nyears to six months. This will significantly affect how employers
\nmanage exits for newer employees. Employers will need to revisit
\nthe use of probationary periods, performance management and notice
\nperiods for new hires.
\n
\nThe current cap on unfair dismissal compensation will be
\nremoved. This will increase potential exposure, particularly for
\nsenior employees and high earners. <\/p>\n

Earlier and “day one” rights<\/p>\n


\nThere will be new day one rights to paternity leave and unpaid
\nparental leave, and expanded bereavement leave.
\n
\nStatutory sick pay will become payable from day one of absence
\nand without the current lower earnings limit.
\n
\nThese changes will widen eligibility across workforces (notably
\nfor junior and support staff). <\/p>\n

Pregnancy and maternity rights<\/p>\n


\nProtections against dismissal for pregnant workers and those
\nindividuals who have returned from maternity leave will be
\nstrengthened. Employers will need to review their redundancy
\nselection processes, dismissal decision-making and manager
\ntraining, given the overlap with discrimination risk. <\/p>\n

Contract change, “fire and rehire” and working
\npatterns<\/p>\n


\nThere will be new statutory restrictions on the use of
\n“fire and rehire” to impose contractual changes. This
\nwill increase the risk profile for changes to compensation
\nstructures, bonus terms and benefits. Employers will need longer
\nlead times, clearer business justifications and more structured
\nconsultation.
\n
\nThere will be stronger protections for zero-hours and other
\n“one-sided flexibility” arrangements, including a right
\nto request a more predictable working pattern. This is likely to be
\na key issue for sectors using casual and gig-type
\narrangements. <\/p>\n

Collective redundancies<\/p>\n


\nThe trigger for collective consultation will be linked to the
\nemploying entity only, rather than to “one establishment”
\nof that entity (broadly each workplace). This means that where an
\nemploying entity proposes to make 20 or more redundancies in a 90
\nday period, a collective redundancy consultation process will be
\nrequired regardless of how those redundancies are distributed
\nacross sites.
\n
\nThe maximum protective award for failure to collectively
\nconsult will double from 90 days to 180 days’ pay.
\n
\nGroups with multiple UK sites under a single employing entity
\nwill be particularly affected. <\/p>\n

Flexible working<\/p>\n


\nWhere a flexible working request is rejected, the employer will
\nneed to provide the reason for the rejection and explain why the
\nrefusal was reasonable. However, the maximum award for failing to
\nfollow the statutory procedure will remain capped at 8 weeks’
\npay. <\/p>\n

Culture, harassment and enforcement<\/p>\n


\nEmployer will have a new proactive duty to take
\n“all reasonable steps” to prevent sexual
\nharassment (including by third parties). The scope of this duty is
\nsubject to further guidance. Sexual harassment disclosures will
\nalso receive whistleblowing protection.
\n
\nA new Fair Work Agency will be created to coordinate the
\nenforcement of certain employment rights (e.g. National Minimum
\nwage and holiday pay), including providing investigation
\npowers. <\/p>\n

Time limits to bring claims<\/p>\n


\nThe current time limit to bring most claims in the Employment
\nTribunal is 3 months. This will be extended to 6 months. <\/p>\n

Timeline and next steps<\/p>\n

Implementation will be phased from 2025 through to 2027. Many of
\nthe most material changes for employers are expected from Q3 2026
\nonwards. Changes to unfair dismissal are not expected to take
\neffect until January 2027. Further secondary legislation and
\nguidance is expected during 2026, including detail on how the new
\nduties and restrictions will operate in practice.<\/p>\n

As we move into 2026, and as the detail of the ERA 2025 is
\nclarified through further legislation and guidance, employers
\nshould start to identify and plan for potential changes in key
\nareas such as:<\/p>\n


\nUpdates to employment contracts, handbooks and key HR policies
\n(including sickness, family leave, flexible working, harassment and
\nwhistleblowing);
\n
\nUpdates to or implementation of workplace conduct
\ntraining;
\n
\nUpdates to contractual documentation with respect to third
\nparties (notably with respect to protections for
\nharassment\/whistleblowing); and
\n
\nUpdates policies and procedures in relation to recruitment,
\nprobation and performance management. <\/p>\n

Early scoping and planning will help ensure your organisation is
\nready to move quickly once guidance is finalised and ahead of the
\nrelevant implementation dates.<\/p>\n

UK Employment Rights Act 2025: Major Reforms for
\nUK Employment Law<\/a><\/p>\n

The content of this article is intended to provide a general
\nguide to the subject matter. Specialist advice should be sought
\nabout your specific circumstances.<\/p>\n

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