The Employment Rights Act 2025:
What Changes and When?
THE EMPLOYMENT RIGHTS ACT 2025
The Employment Rights Act 2025 has been passed by Parliament and is now law.
However, as is often the case with new legislation, the individual provisions will not all come into force immediately.
Our team has generated a list of the key changes in chronological order to give you a clearer idea about what is coming – and when.
We also highlight reforms announced in the government’s Next Steps to Make Work Pay plan, which are not contained in the Act itself but will affect businesses.
A Timeline of Events:
December 2025
Changes taking effect on 18 December 2025, when Royal Assent was received, include:
Repeal of strike legislation
The Strikes (Minimum Service Levels) Act 2023 was repealed with immediate effect.
February 2026
Most of the Trade Union Act 2016 was repealed last month, rolling back restrictions previously placed on industrial action including:
Ballot notice requirements were simplified, industrial action mandates extended to 12 months and notice of action reduced from 14 to 10 days.
Validity of strike ballots extended to 12 months.
Enhanced protection provided for employees taking part in strike action.
Changes to facility time, union subscriptions, and political fund reporting.
April 2026
Family-Related Leave Reforms
Day One parental leave: the one-year qualifying period is removed.
Day One paternity leave: the 26-week service requirement is abolished.
Paternity leave and shared parental leave: employees can take paternity leave even if they have already taken shared parental leave.
Whistleblowing
Disclosure of sexual harassment is explicitly added to the list of qualifying disclosures for whistleblowing protection.
Statutory Sick Pay
Day One – SSP becomes payable from first day of sickness.
The lower earnings limit is removed, extending entitlement to all eligible employees.
Those earning below the former threshold will receive SSP at 80% of weekly earnings.
Trade Union Recognition (Phase One)
Removal of the 40% turnout threshold for statutory recognition ballots.
Restrictions on employer “unfair practices” apply earlier in the process.
Employees hired late in a recognition process are excluded from voting.
Fair Work Agency Established
A new Fair Work Agency will be created, bringing together state enforcement of the National Minimum Wage, Statutory Sick Pay, holiday pay, and employment agency standards.
The Agency will have wide-ranging powers, including issuing underpayment notices with 200% penalties, entering premises, and bringing tribunal claims on behalf of workers.
October 2026
Fire and Rehire Restrictions
Dismissals used to impose changes to key contractual terms (including pay, hours, pensions, and leave) will become automatically unfair – subject to a narrow “financial distress” exception.
The ban extends to “fire and rehire” scenarios.
The existing Code of Practice remains but will be updated.
Collective Redundancies
Protective awards for failure to consult double from 90 to 180 days’ pay.
New penalties will apply even where dismissals arise from fire and rehire exercises.
Harassment Reforms
Employers must take “all reasonable steps” (not just reasonable steps) to prevent workplace harassment.
Employers become liable for third-party harassment, subject to a defence that the business took “all reasonable” preventative steps.
Trade Union Access and Rights
Trade unions gain statutory rights to access workplaces (including digitally) for recruitment and organising.
New protections against detriment for taking part in industrial action.
Introduction of union equality representatives with paid time off.
Obligation to notify workers explicitly of their right to join a trade union.
Consultation and review requirements introduced for tips policies.
Outsourcing of Public Services
Regulations introduced to prevent a two-tier workforce on public service contracts.
Private contractors must treat transferred public-sector staff, and their own workforce, no less favourably.
Tribunal Time Limits
Time limits for most Employment Tribunal claims extended from three to six months.
2027
Unfair Dismissal
The qualifying period for unfair dismissal reduces from two years to six months.
The government commits to protecting this threshold by requiring future changes to be made by primary legislation.
Unfair Dismissal Compensation
The 52-week cap and statutory compensation cap are abolished, making unfair dismissal awards uncapped (basic awards remain unchanged).
We await clarity as to what will replace the cap settings.
Collective Redundancy Thresholds
A new, business-wide threshold for triggering collective consultation will be introduced (details to be set by regulations).
Zero Hours and Predictability Reforms
Duty to offer guaranteed hours contracts reflecting hours worked over a reference period.
Right to reasonable notice of shifts and proportionate compensation for late cancellation.
These rights extend to agency workers, with obligations split between agencies and end hirers.
Flexible Working
Employers must show refusals are reasonable and explain why.
Flexible working remains a Day One right.
Equality Action Plans
Employers with 250+ employees must publish equality action plans, including gender pay gap action plans and menopause action plans.
A voluntary period begins in April 2026, becoming mandatory in 2027.
Family Rights
Enhanced protections against dismissal for:
Pregnant employees.
Those on maternity and other family leave.
Returners (subject to limited exceptions).
Introduction of a Day One right to bereavement leave, including for pregnancy loss before 24 weeks
Umbrella Companies
These will be formally defined and brought within statutory regulation, paving the way for tighter enforcement.
Dates still to be confirmed.
Other Changes
Other Changes
Some important reforms are not yet on the roadmap, including:
A proposed ban on non-disclosure agreements covering harassment and discrimination.
New obligations on employers to keep holiday entitlement and pay records.
A statutory right for employees to “switch off.”
Surveillance technology consultation.
We await details, including implementation dates, for the forthcoming Equality (Race and Disability) Bill, including:
Ethnicity and disability pay gap reporting.
Extension of equal pay rights.
Pay transparency measures.
A new Equal Pay Enforcement Unit.
How We Can Help
The purpose of this chronology is to give your businesses a better idea of what is happening and when, in order that you can make preparations in good time.
Those preparations will best be made in conjunction with expert legal advice to ensure that your business policies and procedures are fit for purpose and do not inadvertently expose you to risk.
HR Services Scotland are on hand to walk you through what needs to be done so that you are ready for when the changes are introduced.
