The Employment Rights Act 2025 will bring in the most wide-ranging restructuring of UK employment law in a generation. Rather than introducing a single set of immediate changes, the Act establishes a new legal framework that expands worker protections, reshapes employer obligations and rebalances risk across the employment relationship over a phased implementation period running from 2025 through to at least 2027.
For employers, the challenge lies not only in understanding what the Act introduces, but in tracking when individual rights and duties take effect and how they interact with existing law. For employees and workers, the Act significantly broadens access to rights that were previously limited by qualifying periods, earnings thresholds or contractual status.
This guide is designed as a practical reference source. It explains what the Employment Rights Act 2025 does, how it is being implemented through secondary legislation and what the changes mean in real terms for employers and individuals at work.
Section A: Overview of the Employment Rights Act 2025
The Employment Rights Act 2025 sets the direction of travel for UK employment law rather than delivering a single, consolidated reform. It amends existing legislation, creates new statutory powers and enables further change through regulations and statutory instruments over time.
1. Legislative background and policy objectives
The Act forms part of a broader programme of reform aimed at strengthening workplace protections and addressing perceived imbalance between employer flexibility and worker security. Its stated objectives include widening access to core employment rights, improving job security, strengthening collective labour protections and increasing enforcement capability.
Unlike earlier employment reforms that focused on discrete issues, the 2025 Act takes a system-level approach. It touches dismissal rights, sickness absence, family leave, trade union law, contractual practices and enforcement mechanisms within a single legislative framework.
2. What the Act does and does not do
The Act does not place all new rights into immediate effect. Instead, it creates enabling provisions that allow the Government to activate, modify or expand specific rights through commencement regulations and further statutory instruments.
As a result, reading the Act in isolation gives an incomplete picture. Many of the most significant changes only take legal effect once secondary legislation is brought into force, often with transitional arrangements that preserve parts of the old regime for a limited period.
Employers therefore need to track both the primary legislation and the flow of regulations that sit beneath it.
3. Who is affected by the Act
The Employment Rights Act 2025 applies across the UK labour market. Its scope extends to employees, workers and employers of all sizes, although the practical impact varies depending on workforce structure, pay levels, contractual models and industrial relations exposure.
Employers with high proportions of lower-paid staff, variable hours arrangements or unionised workforces are likely to experience the effects sooner and more acutely. Employees and workers gain earlier access to protections that were previously delayed or unavailable, particularly in relation to dismissal, sickness absence and collective rights.
Section B: Commencement dates and phased implementation
A defining feature of the Employment Rights Act 2025 is that it does not come into force in a single step. Instead, the Act is being implemented gradually through commencement regulations and supporting statutory instruments, with different reforms taking effect at different times between 2025 and 2027.
For employers and employees alike, understanding timing is as important as understanding substance. Many rights exist in law but are not yet legally enforceable, while others apply only in modified or transitional form.
| Reform area | Legislative mechanism | Effective timing | Who is affected |
|---|---|---|---|
| Framework and enabling powers | Employment Rights Act 2025 | From 2025 | All employers, employees and workers |
| Trade union and industrial action reforms | Commencement regulations and amending statutory instruments | February 2026 | Unionised employers, public-facing services, affected workers |
| Statutory Sick Pay eligibility expansion | Secondary legislation under the Act | April 2026 | Lower-paid employees and employers with part-time or variable staff |
| Statutory pay uprating and threshold changes | Annual uprating regulations | April 2026 | All employers operating statutory pay schemes |
| Predictable working pattern rights | Secondary legislation under the Act | 2026 (phased) | Workers on zero-hours or highly variable contracts |
| Fire and rehire restrictions | Statutory amendments and guidance | 2026 (phased) | Employers proposing contractual changes |
| Removal of unfair dismissal qualifying period | Commencement regulations | 2026–2027 (expected) | All employees and recruiting employers |
| Fair Work Agency enforcement powers | Employment Rights Act 2025 and secondary legislation | 2026–2027 | All employers subject to employment regulation |
1. Why the Act is being implemented in phases
The Act introduces wide-ranging changes across multiple areas of employment law, many of which require detailed secondary legislation to define eligibility, thresholds, enforcement mechanisms and transitional rules. A phased approach allows the Government to consult further, build administrative capacity and manage the impact on employers and regulators.
From a legal perspective, the Act operates as a framework statute. It sets out the powers and direction of reform, while commencement regulations determine when individual sections become operative. Until those sections are commenced, the existing legal position continues to apply.
2. Key implementation phases
Early changes took effect during 2025, focusing primarily on enabling powers and preparatory reforms. The most significant practical changes for employers cluster around April 2026, including reforms to statutory sick pay, parental rights, wage thresholds and associated enforcement provisions.
Further reforms, including elements affecting dismissal rights, contractual practices and enforcement structures, are scheduled to follow in later phases through 2026 and into 2027. Each phase is accompanied by its own statutory instruments, often with detailed transitional provisions.
3. Transitional provisions and overlapping regimes
During the transition period, it is possible for different legal regimes to apply simultaneously depending on when employment relationships began, when leave was taken or when disputes arose. In some cases, old rules continue to govern existing arrangements while new rules apply prospectively.
This creates a risk of mixed compliance, particularly for employers managing large or diverse workforces. Decisions taken on the assumption that previous protections still apply, or that new rights are not yet active, can expose employers to unintended liability.
Accurate timing analysis is therefore central to compliance under the Employment Rights Act 2025. Employers need to assess not only what the law will be, but when it applies to each individual situation.
Section C: Changes to unfair dismissal rights
One of the most consequential elements of the Employment Rights Act 2025 is the restructuring of unfair dismissal protection. These changes alter long-established assumptions about risk in the early stages of employment and significantly expand the pool of individuals able to bring tribunal claims.
For employers, the reforms affect recruitment decisions, probation management and termination processes from the very start of employment.
1. Removal of the two-year qualifying period
Under the previous framework, most employees needed two years’ continuous service before gaining the right to claim ordinary unfair dismissal. The Act removes that qualifying period, extending unfair dismissal protection from day one of employment.
Once the relevant provisions are commenced, employees will be able to challenge dismissals regardless of length of service, subject to limited statutory exceptions that will be defined through secondary legislation. The practical effect is that dismissals during probation or early employment are no longer insulated from unfair dismissal scrutiny.
2. What changes in practice for employers
The removal of the qualifying period shifts legal risk into the earliest stages of the employment relationship. Decisions to terminate employment within the first months now need to be capable of justification by reference to a fair reason and a fair process.
Informal probationary dismissals, truncated processes and reliance on “not the right fit” reasoning carry greater legal exposure. Employers will need clearer documentation, consistent performance management and defensible decision-making even where employment has been short-lived.
This change also increases the likelihood of early settlement pressure, as claimants no longer face the hurdle of establishing qualifying service.
3. Impact for employees
For employees, the reform provides immediate access to unfair dismissal protection and tribunal remedies. Workers dismissed shortly after starting a role will no longer be excluded from claims solely due to length of service.
While claim success will still depend on the facts of each case, the removal of the qualifying period lowers the barrier to bringing a claim and shifts focus onto the employer’s justification and handling of the dismissal.
4. Interaction with existing automatically unfair dismissal rights
Certain dismissals have long attracted day-one protection, such as dismissals linked to discrimination, whistleblowing, pregnancy or trade union activity. The Act does not remove or replace these protections but instead extends broader unfair dismissal rights alongside them.
As a result, employers face overlapping layers of protection rather than a single threshold test. Missteps in early dismissals now carry both discrimination risk and ordinary unfair dismissal exposure, increasing the importance of structured decision-making from the outset.
Section D: Zero-hours contracts and predictability of work
The Employment Rights Act 2025 introduces new controls on the use of zero-hours and highly variable contracts, aimed at increasing predictability of work and income. While zero-hours arrangements are not prohibited outright, the Act reshapes how and when they can be used without triggering additional legal and financial consequences.
For employers, these changes affect scheduling practices, contract design and workforce flexibility, particularly in sectors reliant on variable demand.
1. New rights to predictable working patterns
The Act creates a statutory right for qualifying workers to request more predictable working hours. Where a worker’s hours vary beyond defined parameters, they gain the ability to seek a contract that reflects a more stable pattern of work.
Secondary legislation will determine eligibility criteria, reference periods and the circumstances in which employers can refuse a request. While refusals will remain possible, they will need to be based on prescribed business grounds and supported by evidence.
2. Compensation for cancelled or curtailed shifts
The reforms also introduce compensation rights where scheduled work is cancelled, shortened or materially altered at short notice. These provisions are intended to address income instability caused by late scheduling changes.
For employers, this means that operational decisions taken close to the start of a shift can carry a direct financial cost even where no work is performed. The precise trigger points and compensation calculations will be set out in regulations.
3. Impact on workforce planning and flexibility
The combined effect of predictability rights and cancellation compensation reduces the economic advantage of highly flexible staffing models. Employers relying on on-demand labour will need to reassess whether existing arrangements remain viable once compensation and administrative obligations are factored in.
More structured scheduling, longer reference periods and clearer contractual commitments are likely to become necessary to manage exposure. For some employers, this may result in a shift away from zero-hours models toward minimum-hours or banded-hours contracts.
4. Compliance risks for employers
Failure to engage properly with predictability requests or to pay required compensation creates both financial and reputational risk. As enforcement powers expand under the Act, patterns of non-compliance are more likely to attract scrutiny.
Employers that treat these rights as optional or informal risk compounding liability across multiple workers rather than isolated disputes.
Section E: Statutory Sick Pay reform
Statutory Sick Pay is one of the areas most visibly reshaped by the Employment Rights Act 2025. The reforms extend entitlement to groups previously excluded from SSP and change how sickness absence costs arise for employers, particularly where work is low paid, variable or insecure.
While the headline weekly rate is set separately through annual uprating, the Act fundamentally alters who qualifies and how frequently SSP liability is triggered.
| Worker category | Position before reform | Position under Employment Rights Act 2025 | How SSP is paid |
|---|---|---|---|
| Employees earning at or above the Lower Earnings Limit | Eligible for Statutory Sick Pay if other qualifying conditions are met | Eligibility continues unchanged | Statutory weekly SSP rate |
| Employees earning below the Lower Earnings Limit | Excluded from Statutory Sick Pay | Brought within scope of SSP entitlement | Lower of the statutory SSP rate or 80 per cent of average earnings |
| Part-time employees with fluctuating pay | Often excluded due to earnings variability | More likely to qualify due to removal of the earnings barrier | Calculated by reference to average earnings |
| Variable-hours and casual workers | Commonly outside SSP due to low or irregular earnings | SSP entitlement applies where qualifying conditions are met | 80 per cent earnings model where below the Lower Earnings Limit |
| Employers with large lower-paid workforces | Limited SSP exposure for low earners | Increased frequency and spread of SSP liability | Statutory payment obligation triggered more often |
1. Expansion of SSP eligibility
Under the previous framework, employees earning below the Lower Earnings Limit were excluded from Statutory Sick Pay altogether. The Act removes that barrier, extending SSP entitlement to lower-paid workers once the relevant provisions are commenced.
Where a worker earns below the Lower Earnings Limit, SSP will be payable at the lower of the statutory weekly rate or 80 per cent of the worker’s average earnings. This brings large numbers of part-time and variable-hours workers within scope for the first time.
2. What changes for employers in practical terms
The expansion of eligibility means sickness absence that previously carried no statutory cost now generates a direct payment obligation. For employers with large numbers of lower-paid staff, SSP exposure becomes both more frequent and harder to predict.
Short-term absences, casual arrangements and irregular earnings patterns will all require closer monitoring. Payroll systems need to calculate entitlement accurately across fluctuating pay periods, rather than defaulting to an exclusion based on earnings thresholds.
3. Interaction with absence management policies
Many absence management frameworks were designed around the assumption that SSP applied only above a defined earnings floor. That assumption no longer holds under the new regime.
Employers will need to review trigger points, certification requirements and escalation processes to ensure they remain lawful and proportionate. Poorly aligned absence policies increase the risk of disputes, particularly where workers perceive differential treatment linked to pay level or contract type.
4. Cost exposure and workforce planning
The financial impact of SSP reform is cumulative rather than isolated. Individually modest payments can aggregate into significant cost where absence rates are high or where work is inherently intermittent.
Employers who budget solely on historical SSP spend risk underestimating future exposure. Accurate modelling now requires factoring in both higher eligibility and interaction with wider reforms affecting predictability of work and dismissal protection.
Section F: Family-related leave and pay reforms
The Employment Rights Act 2025 also reshapes the framework for family-related leave and pay. While headline statutory rates and earnings thresholds continue to be set through annual uprating, the Act broadens access to parental rights and alters when those rights arise.
For employers, the impact is less about the level of statutory pay and more about increased eligibility, earlier triggering of rights and the knock-on effect for workforce planning.
1. Expanded parental eligibility rights
A central theme of the Act is the extension of family-related rights closer to the start of employment. Changes introduced under the Act remove or shorten qualifying service requirements for certain parental rights, increasing the number of workers able to take leave shortly after joining an organisation.
These reforms apply across a range of parental scenarios, including maternity-related rights and associated protections. While entitlement to statutory pay remains subject to earnings thresholds, the right to take leave itself is widened, increasing absence exposure even where statutory pay is not triggered.
2. Interaction with statutory pay thresholds
The Lower Earnings Limit continues to operate as the gateway to statutory family-related pay. Employees earning below that threshold will not qualify for statutory maternity pay or related payments, but they may still qualify for leave and associated employment protections.
This creates a split position where employers may need to manage extended periods of leave without statutory reimbursement obligations applying. Payroll and HR teams need to distinguish carefully between entitlement to leave and entitlement to pay, particularly for lower-paid or part-time staff.
3. Workforce planning and resourcing impact
Earlier and broader access to parental leave complicates resourcing decisions. Employers may face temporary vacancies or reduced capacity from newer employees whose absence was previously unlikely or legally constrained.
Cover arrangements, fixed-term backfill and workload redistribution all become more common responses. Where multiple reforms intersect, such as wider SSP eligibility and predictability of work rights, the cumulative effect on staffing levels can be significant.
4. Risk areas for employers
The legal risk lies in inconsistent handling. Employees exercising family-related rights are protected against detriment and dismissal, and failures in process or communication can quickly escalate into discrimination or automatic unfair dismissal claims.
Employers need clear procedures, trained managers and consistent decision-making to manage these risks. Informal approaches that may have worked under a narrower eligibility regime are far less defensible under the expanded framework created by the Act.
Section G: Trade union and industrial action reforms
The Employment Rights Act 2025 delivers a significant recalibration of the legal framework governing trade unions and industrial action. These reforms alter long-standing assumptions about employer leverage during disputes and materially increase the likelihood, scope and impact of lawful industrial action.
For employers, the changes require a shift away from procedural containment strategies and towards earlier, more strategic engagement with workforce relations.
1. Changes to ballot rules and industrial action thresholds
The Act relaxes several procedural requirements that previously acted as barriers to lawful industrial action. Ballot thresholds and notice provisions are amended through secondary legislation, reducing the technical hurdles trade unions need to clear before action can proceed.
While ballots and notices remain legally required, the scope for employers to challenge industrial action on procedural grounds is narrowed. Minor defects that previously delayed or invalidated action are less likely to provide a viable defence under the revised framework.
2. Removal of minimum service level regimes
One of the most impactful reforms is the removal of statutory minimum service level requirements. Under the previous regime, employers in certain sectors could rely on minimum service obligations to limit the operational effect of strike action.
From February 2026, those protections fall away. Employers will no longer be able to mandate minimum staffing levels during lawful industrial action through statutory mechanisms. This increases the risk of complete service withdrawal, particularly in labour-intensive or public-facing operations.
3. Expanded protection from dismissal and detriment
The Act strengthens protections for workers participating in trade union activity and industrial action. The scope of protection against dismissal and other forms of detriment is widened, increasing exposure for employers who take action perceived as punitive or retaliatory.
The boundary between lawful operational response and unlawful detriment becomes harder to manage in practice. Decisions relating to pay deductions, shift allocation, redeployment or disciplinary action during disputes require careful legal assessment.
4. Practical implications for employers
The combined effect of these reforms is a higher likelihood of industrial action proceeding lawfully and a reduced ability to contain its impact through legal challenge. Employers face increased operational disruption risk and heightened litigation exposure where responses are poorly handled.
The strategic emphasis shifts towards prevention. Early engagement, credible consultation and defensible decision-making become the primary risk controls. Employers that rely on outdated assumptions about procedural leverage are likely to encounter both legal and operational consequences under the new regime.
Section H: Fire and rehire restrictions
The Employment Rights Act 2025 places new statutory limits on the practice commonly referred to as fire and rehire. While dismissal and re-engagement is not prohibited outright, the Act significantly tightens the conditions under which it can lawfully be used and increases the legal consequences where employers rely on it as a negotiating tactic.
For employers, the reforms narrow the margin for error and increase scrutiny of business justification, consultation and proportionality.
1. New statutory limits on dismissal and re-engagement
The Act introduces a higher legal threshold for dismissals linked to contractual change. Employers are expected to demonstrate that dismissal and re-engagement was a genuine last resort, rather than a default response to resistance or stalled negotiations.
Secondary legislation and updated statutory guidance clarify the circumstances in which dismissal may be regarded as unfair, even where consultation has taken place. The focus moves away from process alone and onto the substance of the employer’s decision-making.
2. What employers are required to justify
Employers relying on dismissal and re-engagement will need to show a clear business rationale, evidence that alternative options were meaningfully explored and a proportionate link between the proposed contractual change and the business need relied upon.
Financial pressure alone is unlikely to be sufficient without supporting evidence. Tribunals are expected to examine whether the employer’s approach balanced commercial objectives against the impact on affected workers, rather than treating contractual change as inevitable.
3. Consequences of non-compliance
Where dismissal and re-engagement is found to be unjustified, employers face increased exposure to unfair dismissal claims and associated remedies. The strengthened statutory framework also raises the likelihood of regulatory scrutiny and reputational damage where patterns of misuse emerge.
The risk profile is particularly acute where fire and rehire overlaps with trade union activity, collective consultation obligations or protected characteristics. In those cases, liability can extend beyond ordinary unfair dismissal into automatically unfair dismissal and discrimination claims.
4. Practical impact on workforce change strategies
The reforms reduce the viability of fire and rehire as a leverage tool in contractual negotiations. Employers seeking to implement changes to terms and conditions will need to invest more heavily in upfront planning, evidence gathering and engagement.
In practice, this increases the importance of early consultation, phased change and alternative mechanisms such as voluntary variation or incentive-based agreement. Employers that fail to adapt their approach are likely to face higher legal and industrial relations risk under the new regime.
Section I: Enforcement and the Fair Work Agency
The Employment Rights Act 2025 strengthens enforcement by moving away from a fragmented, complaint-led model and towards more active, centralised oversight. The creation of the Fair Work Agency marks a shift in how employment rights are policed and how non-compliance is identified and addressed.
For employers, this represents a change not only in legal exposure but in the likelihood of scrutiny, even where no individual complaint has been raised.
1. Creation of a single enforcement body
The Act establishes the Fair Work Agency as a unified enforcement body, consolidating functions previously spread across multiple regulators. Its remit covers a broad range of employment rights, including pay, statutory leave, sick pay and contractual compliance.
The aim is to reduce gaps in enforcement and enable a more coordinated approach. For employers, this removes the comfort of siloed oversight and increases the chance that compliance failures in one area will surface through wider inspection activity.
2. Expanded inspection and investigation powers
The Agency is granted enhanced powers to investigate potential breaches without waiting for an individual to bring a claim. These powers include the ability to require information, enter premises in prescribed circumstances and investigate patterns of non-compliance across a workforce.
This shifts enforcement risk from reactive to proactive. Employers may face scrutiny based on data, sector-wide intelligence or referrals, rather than specific disputes.
3. Financial penalties and compliance sanctions
Alongside investigative powers, the Act strengthens the range of sanctions available for non-compliance. Financial penalties can be imposed for breaches of statutory obligations, with the scale of penalties linked to the nature and persistence of the breach.
Repeated or systemic failures are more likely to attract enforcement action, particularly where employers have failed to take corrective steps after initial engagement.
4. What this means for employers in practice
The introduction of the Fair Work Agency increases the importance of preventative compliance. Employers can no longer rely on the absence of tribunal claims as evidence that systems are working.
Accurate record-keeping, consistent application of policies and regular internal audits become central risk controls. Employers that address compliance issues early and transparently are better placed to manage regulatory engagement than those reacting only once enforcement action has begun.
Section J: Tribunal claims, remedies and compensation
The Employment Rights Act 2025 increases both the likelihood of tribunal claims and the potential consequences when claims succeed. By widening eligibility for core rights and strengthening enforcement, the Act shifts employment tribunal litigation from a marginal risk to a more routine feature of workforce management.
For employers, the change is less about new causes of action and more about volume, timing and leverage.
1. Increased access to tribunal claims
The removal of qualifying service requirements for unfair dismissal and the expansion of statutory rights across sickness absence, parental leave and contractual practices significantly increase the number of individuals able to bring claims.
Claims are more likely to arise earlier in the employment relationship and in situations that were previously regarded as low risk, such as probationary dismissals, short-term sickness absence and early-stage contractual disputes.
2. Changes to remedies and compensation exposure
While the Act does not introduce a single new compensation framework, it increases exposure by widening the circumstances in which remedies apply. Compensation risk rises through a combination of broader eligibility, stronger protection against detriment and increased scrutiny of employer justification.
Where claims succeed, employers may face compensation awards alongside reinstatement or re-engagement orders, particularly in cases involving unfair dismissal or trade union activity. The reputational impact of adverse findings is also more pronounced where enforcement bodies are involved.
3. Early resolution versus litigation risk
The expanded scope of claims increases pressure on early resolution strategies. Employers may find that disputes reach tribunal stage more quickly, as claimants no longer face procedural hurdles that previously filtered out weaker cases.
At the same time, the cost of defending claims, both financially and in management time, increases. Employers need to assess when early settlement is commercially sensible and when a defended position is justified by precedent, principle or deterrence.
4. Managing tribunal risk under the new framework
Effective risk management under the Act relies on consistency and evidence. Decisions affecting dismissal, pay, absence and contractual change need to be documented and capable of explanation against statutory criteria.
Training for managers and HR teams becomes more important as front-line decisions are increasingly subject to legal scrutiny. Employers that invest in decision-making discipline are better placed to manage tribunal exposure than those relying on informal or discretionary approaches.
Section K: Impact on contracts, policies and handbooks
The Employment Rights Act 2025 requires more than isolated policy updates. The breadth of reform means that employment contracts, workplace policies and staff handbooks need to be reviewed as an integrated set, rather than treated as standalone documents.
For employers, outdated drafting creates both legal risk and practical confusion where contractual terms no longer align with statutory rights.
1. Employment contracts
Employment contracts drafted under the previous framework often assume qualifying service thresholds, limited statutory coverage and narrower enforcement risk. Those assumptions no longer hold in many areas.
Contracts that reference probationary periods, dismissal rights, sickness absence or working hours need to be reviewed to ensure they reflect current statutory protections and do not inadvertently misstate legal position. Clauses that rely on flexibility or discretion should be examined closely, as they are more likely to be tested under the expanded rights regime.
2. Workplace policies and procedures
Policies governing sickness absence, family leave, disciplinary action and contractual change are directly affected by the Act. Inconsistent or outdated policies increase the risk of claims, particularly where managers apply them unevenly across the workforce.
Clear procedures, aligned with statutory entitlements and enforcement expectations, provide a critical line of defence. Policies also need to account for wider eligibility, ensuring that rights are applied consistently to employees and workers who now fall within scope.
3. Staff handbooks and internal guidance
Staff handbooks play an important role in shaping expectations. Where handbooks continue to describe rights in pre-2025 terms, employers risk misleading staff and undermining their own position in disputes.
Handbook updates should reflect the current legal framework, explain how rights operate in practice and direct managers and workers to the correct procedures. Ambiguity or omission is more likely to be interpreted against the employer where statutory rights are well publicised.
4. Training and implementation
Updating documents alone is not enough. Managers responsible for hiring, scheduling, absence management and dismissal need to understand how the reforms affect their decisions.
Without training, even well-drafted policies can be applied incorrectly, creating avoidable risk. Employers that treat implementation as an operational change rather than a purely legal exercise are better placed to manage compliance under the Act.
Section L: Practical implications for employers
Taken together, the reforms introduced by the Employment Rights Act 2025 change the risk profile of employing staff in the UK. The cumulative effect is greater exposure earlier in the employment relationship, wider statutory coverage and a higher likelihood of regulatory and tribunal scrutiny.
For employers, the challenge is not any single reform but how multiple changes interact in practice.
1. Cost modelling and workforce strategy
Many of the Act’s reforms increase cost indirectly rather than through headline rates. Wider SSP eligibility, earlier access to dismissal protection and expanded parental rights all create financial exposure that is harder to predict and less easily contained.
Employers need to revisit workforce models, particularly where staffing relies on variable hours, lower-paid roles or short-tenure employment. Budgeting based on historic absence, turnover or litigation patterns is unlikely to reflect future reality under the new framework.
2. Risk concentration by sector and workforce type
The impact of the Act is not evenly distributed. Employers in retail, hospitality, care, logistics and other labour-intensive sectors face greater exposure due to higher proportions of lower-paid staff, variable scheduling and turnover.
Unionised environments and public-facing services face additional pressure from trade union reforms and the removal of minimum service level protections. Employers with complex contractual structures or widespread use of flexible arrangements also carry higher compliance risk.
3. Early-stage employment risk
The removal of qualifying periods for unfair dismissal and the expansion of statutory rights at day one shift legal risk into recruitment and probation. Poor hiring decisions, weak onboarding and informal performance management now carry immediate legal consequences.
Employers need to invest more heavily in role definition, selection processes and early performance management. Where issues arise, decisions need to be supported by evidence and a clear rationale rather than assumptions about limited legal exposure.
4. Governance and decision-making discipline
Under the new framework, informal or inconsistent decision-making is more likely to be challenged. Employers benefit from clear governance structures, documented reasoning and consistent application of policies across teams and locations.
Senior oversight of workforce decisions becomes more important as enforcement bodies gain greater visibility and powers. Employers that embed compliance into routine decision-making are better placed to manage both legal and operational risk.
Section M: Practical implications for employees and workers
The Employment Rights Act 2025 materially changes how and when individuals gain protection at work. Many rights that were previously delayed, conditional or unavailable now arise earlier in the employment relationship or apply to a wider group of workers.
For employees and workers, the reforms increase legal protection, but they also place greater importance on understanding how rights operate in practice rather than in principle.
1. Earlier access to workplace protections
One of the most significant changes is the earlier availability of core employment rights. Unfair dismissal protection is no longer tied to a two-year qualifying period, and statutory rights linked to sickness absence and family leave apply to a broader range of workers.
This means individuals have legal protection from the outset of employment in situations that previously offered little or no recourse. Dismissals, changes to working patterns and responses to sickness absence are now more readily open to challenge.
2. Expanded coverage for lower-paid and variable-hours workers
Workers on lower pay or variable hours gain increased protection under the Act. Expanded SSP eligibility brings sickness absence support to individuals who were previously excluded due to earnings thresholds.
New rights linked to predictability of work and compensation for cancelled shifts also reduce income volatility for those working irregular patterns. These changes are particularly relevant in sectors where work has traditionally been insecure or fluctuating.
3. Stronger protection against adverse treatment
The Act strengthens protection against detriment and dismissal linked to the exercise of statutory rights, trade union activity and family-related leave. Employees and workers are better protected where they raise concerns, request changes to working patterns or take lawful industrial action.
While employers retain the ability to manage performance and conduct, decisions that appear retaliatory or poorly justified are more likely to be scrutinised under the expanded legal framework.
4. Understanding limits and responsibilities
Although the Act expands rights, it does not guarantee outcomes. Claims remain fact-specific, and individuals still need to follow workplace procedures and engage reasonably with employers.
Employees and workers benefit most where they understand how rights are triggered, what evidence matters and when early advice is appropriate. Misunderstanding the scope of new protections can lead to misplaced expectations or unnecessary dispute escalation.
Section N: Employment Rights Act 2025 FAQs
When do the Employment Rights Act 2025 changes take effect?
The Act does not take effect in full on a single date. Different provisions are brought into force through commencement regulations and supporting statutory instruments between 2025 and 2027. Some changes apply from early 2025, others cluster around April and February 2026, with further reforms following later.
Does the Act apply to existing employees?
Many of the reforms apply to existing employees and workers once the relevant provisions are commenced. Rights are not limited to new starters, although transitional provisions may apply in some situations depending on timing and the specific right in question.
Are all workers now treated the same as employees?
The Act expands protection for workers in several areas, but it does not remove the legal distinction between employees and workers. Entitlement still depends on employment status, earnings and the specific statutory right involved.
Can employers delay implementation until contracts or policies are updated?
Once a provision is in force, employers are expected to comply regardless of whether internal documentation has been updated. Outdated contracts or policies do not override statutory rights.
Does the removal of the unfair dismissal qualifying period apply to all dismissals?
Once commenced, the removal applies to ordinary unfair dismissal claims. Certain dismissals already attracted day-one protection under existing law, and those protections continue alongside the expanded regime.
Will statutory sick pay apply to everyone?
Eligibility for SSP is widened to include lower-paid workers, but payment is capped at the lower of the statutory rate or 80 per cent of average earnings for those below the Lower Earnings Limit. SSP is not universal and still depends on qualifying conditions.
Does the Act ban zero-hours contracts?
Zero-hours contracts remain lawful, but new rights around predictability of work and compensation for cancelled shifts reduce the scope for unrestricted use without financial or legal consequence.
How does the Act affect trade union activity?
The Act lowers procedural barriers to industrial action, removes minimum service level regimes and strengthens protection against dismissal and detriment linked to trade union activity. This increases both the likelihood and potential impact of lawful industrial action.
Who enforces the new rights?
Enforcement is strengthened through the creation of the Fair Work Agency, which has powers to investigate and act on non-compliance without relying solely on individual complaints.
Section O: Glossary
| Term | Meaning |
|---|---|
| Employment Rights Act 2025 | The UK legislation introducing wide-ranging reforms to employment rights, delivered through a framework Act supported by commencement regulations and further statutory instruments. |
| Commencement regulations | Secondary legislation that brings specific sections of an Act into legal effect on particular dates, often with transitional provisions. |
| Secondary legislation | Regulations or statutory instruments made under powers in an Act, used to activate, amend or apply detailed rules. |
| Statutory instrument | A form of secondary legislation used to set detailed legal rules, such as eligibility tests, thresholds, enforcement powers and transitional arrangements. |
| Transitional provisions | Legal rules that manage the move from old law to new law, including where legacy arrangements continue to apply for a period. |
| Employee | An individual working under a contract of employment, with access to the broadest range of statutory rights, including unfair dismissal protection once in scope. |
| Worker | A broader legal category than employee, covering individuals who perform work personally but may not have employee status, with statutory rights that depend on the specific entitlement. |
| Unfair dismissal | A tribunal claim available where an employee is dismissed without a fair reason or without a fair process, with eligibility expanded under the Act by removing qualifying service requirements when commenced. |
| Probation period | An initial period of employment used to assess suitability, often linked to shorter notice periods or review processes, but not a legal exemption from statutory rights once they apply. |
| Statutory Sick Pay (SSP) | The statutory minimum payment employers provide to qualifying employees during sickness absence, with eligibility widened under the Act to include lower earners on an 80 per cent earnings basis when commenced. |
| Lower Earnings Limit (LEL) | An earnings threshold used in employment and National Insurance rules, including as a gateway for certain statutory payments, with its role in SSP eligibility reduced under the Act once reforms take effect. |
| Predictable working pattern | A more stable or regular set of working hours, linked to new rights for qualifying workers to request greater predictability under the Act. |
| Zero-hours contract | A contract that does not guarantee minimum working hours, remaining lawful but subject to new predictability rights and compensation rules for cancelled shifts. |
| Shift cancellation compensation | A statutory compensation entitlement triggered when scheduled work is cancelled, shortened or materially changed at short notice, with details set out in regulations. |
| Family-related leave | Statutory leave entitlements connected to pregnancy, birth, adoption and related circumstances, with eligibility widened under the Act for some rights once commenced. |
| Statutory family pay | Statutory payments such as maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay, subject to eligibility and earnings conditions. |
| Detriment | Unfavourable treatment short of dismissal, such as withholding opportunities or imposing penalties, which can give rise to legal claims where linked to protected activity or statutory rights. |
| Trade union recognition | A formal process through which a trade union is recognised for collective bargaining purposes, with the wider industrial relations environment affected by the Act’s reforms. |
| Industrial action | Collective action by workers such as strikes or action short of a strike, governed by detailed statutory rules that are modified under the Act and related instruments. |
| Minimum service levels | Statutory requirements aimed at maintaining service provision during strikes in certain sectors, removed under the post-2025 reform framework. |
| Fire and rehire | A practice involving dismissal and re-engagement on new terms, restricted under the Act through higher legal thresholds and strengthened scrutiny of justification and process. |
| Fair Work Agency | A new enforcement body established under the Act with powers to investigate, require information and enforce compliance with a range of employment rights. |
| Employment Tribunal | The specialist court that determines most employment law disputes, including unfair dismissal, unlawful deductions and detriment claims. |
| Remedy | The outcome a tribunal can order where a claim succeeds, including compensation, reinstatement or re-engagement depending on claim type. |
Section P: Additional resources and links
| Resource | What it covers | URL |
|---|---|---|
| Employment Rights Act 2025 (primary legislation) | The enacted Act and the legal wording of the reforms, including the enabling powers and the new statutory framework. | https://www.legislation.gov.uk/ukpga/2025/36/enacted |
| Employment Rights Act 2025 (Commencement No. 1) Regulations 2026 | The commencement instrument bringing specified provisions into force and setting out commencement dates and related provisions. | https://www.legislation.gov.uk/uksi/2026/3/made |
| ACAS: Employment Rights Act 2025 | Plain-English guidance on what is changing, including worker and employer implications and timelines for key reforms. | https://www.acas.org.uk/employment-rights-act-2025 |
| ACAS: Unfair dismissal guidance | How unfair dismissal works, including the qualifying period position and how the Act is expected to change entitlement when commenced. | https://www.acas.org.uk/dismissals/unfair-dismissal |
| CIPD: Employment Rights Act 2025 resources | HR-focused explanation of reforms, including implementation timing and compliance planning for employers. | https://www.cipd.org/uk/knowledge/employment-law/employment-rights-act-2025-unfair-dismissal/ |
| GOV.UK: Proposed benefit and pension rates 2026 to 2027 | Official proposed statutory payment rates, including SSP, statutory family leave pay rates and the Lower Earnings Limit figures. | https://www.gov.uk/government/publications/benefit-and-pension-rates-2026-to-2027/proposed-benefit-and-pension-rates-2026-to-2027 |
| GOV.UK: Trade union law transition guidance | Government guidance on the transition arrangements and commencement timing for trade union and industrial action changes. | https://www.gov.uk/guidance/trade-union-law-transition-to-employment-rights-act-2025 |
| Employment Tribunal: GOV.UK guidance | How Employment Tribunal claims work, how to submit a claim and the procedural steps, including early conciliation. | https://www.gov.uk/employment-tribunals |
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
