The Employment Rights Act 2025 introduces the most significant shift in UK employment law in over a decade. Changes began being phased in from April 2026. The direction is clear: stronger worker protections, more regulatory intervention, higher financial risk for employers, and greater union influence. Organisations need to prepare progressively rather than react when each change is already in force.
[Updated April 2026]
TL;DR:
- Rollout throughout 2026 and beyond: key reforms have started landing and will continue to do so throughout 2026 and 2027 – ongoing monitoring and phased preparation are essential.
- Redundancy & TUPE risk increases: protective awards have now doubled to 180 days’ gross pay, thresholds may apply across the whole business, and intra-group transfers can trigger TUPE. Consultation failures in these areas have become significantly more expensive.
- Harassment rules tighten sharply: employers must prove all reasonable steps were taken; liability will extend
sto third parties; harassment complaints have become protected disclosures, and it’s proposed that NDAs will not silence them. - Unfair dismissal: From 1st January 2027, the two-year qualifying period will be reduced to six-months and there will be no cap on compensation. This is retrospective, so anyone with 6 month’s service as at 1st January will attain the right to not be unfairly dismissed. Remember that when considering whether someone has this right, you must add on the statutory notice that would apply (1 week), so employees will effectively get the right at 5 months and 3 weeks (currently it’s one year and 51 weeks).
- Fire-and-rehire effectively banned in 2026: only permitted in very limited circumstances e.g. genuine business distress.
- Union influence expands: recognition threshold may fall from 10% to 2%; mandatory access and ballot reforms (including in required turnout for strike action) expected in 2026.
- Mandatory equality action plans: employers with 250+ staff to publish pay-gap action plans.
- Disputes to be more uncertain for longer: tribunal limits extend from three to six months; ACAS conciliation is now 12 weeks.
- New Fair Work Agency: very wide investigatory powers and ability to pursue claims without employee consent.
LegalEdge’s Head of Employment, Nick Pritchett, sets out his key tips on what businesses need to consider in the short and long term:
1. Timeline & Implementation
The Act is now in force, with phased implementation through 2026 and beyond.
- Early changes already active (e.g. repealing the minimum service levels required for strike actions in emergency services).
- Changes to protective awards (redundancy and TUPE), SSP, parental-leave, and enforcement reforms including the establishment of the Fair Work Agency in force from April 2026, including statutory requirement to keep three years of records of employees’ holidays.
- Most major reforms require additional regulations and guidance, meaning gradual rollout. Multiple consultations already running.
- The staggered approach demands ongoing attention from HR and legal teams.
- All timelines are subject to government amendment.
Key expected dates:
- October 2026: harassment reforms, extended tribunal deadlines to apply.
- January 2027: reduction of qualifying period for unfair dismissal from two years to six months, and removal of cap on unfair dismissal compensation.
- April 2027: Zero-hours reforms, extended maternity and family leave protections, statutory bereavement leave, changes to collective consultation thresholds, flexible working, and umbrella companies.
2. Redundancies, TUPE & Collective Consultation
Protective awards (April 2026)
- Maximum award doubled from 90 to 180 days’ gross pay per affected employee.
- Failures in consultation during mass redundancy or certain reorganisations become far costlier.
- Government may further remove the “establishment” test and move to percentage-based thresholds (subject to consultation).
Thresholds (2027)
- The ‘20 employees’ trigger proposed to apply across the whole business or group, not by site.
- More restructures may unintentionally cross the threshold, requiring full consultation.
TUPE (April 2026)
- The risk of protective awards applies to consultation requirements for intra-group transfers, following for example, asset transfers, and reorganisations,
- No minimum employee numbers.
Action: Update redundancy playbooks, introduce consultation governance, train HR and managers, take advice early on potential TUPE situations.
3. Harassment, NDAs & Whistleblowing
New employer duty (October 2027)
- Must take all reasonable steps to prevent harassment (higher than previous standard).
- Requires proactive action to have been taken before a claim is made, including things like demonstrable recurring training, leadership involvement, and documented prevention measures.
Third-party harassment (October 2026)
- Liability for harassment by customers, clients, and others.
Protected disclosures (April 2026)
- Sexual harassment complaints capable of being protected whistleblowing disclosures.
- Proposed that NDAs will not silence such complaints (currently in consultation).
- Retaliation is automatically unlawful.
Action: Refresh training, update policies, review settlement practices, and strengthen reporting channels.
4. Unfair Dismissal & Probation (January 2026)
Significant policy change: the Government will replace the current two-year qualifying period with a six-month qualifying period to apply to any employee who has 6 months’ service* at 1st January 2027. Employers should therefore plan on a six-month window* where unfair dismissal rights will apply after six months’ service* — this is a change from both the pre-Bill two-year position and the earlier day-one proposal.
Probation
While the statutory probation concept is no longer needed,; employers should work around a 3-month probation period (with a 1 or 2-month extension) and build proactive management and documentation into process design.
Fixed-term contracts
Do not avoid unfair dismissal rights (e.g. redundancy); renewals count towards continuous service.
NOTE – calculation of 6 months’ service must take into account the statutory notice that would have applied but for the dismissal, so the actual time limit will be 6 months minus 1 week.
5. Fire-and-Rehire Restrictions (January 2027)
Dismissal and re-engagement to force new terms will become automatically unfair, except in narrowly defined situations such as evidencable distress.
Action: Review change-management strategies and consult early on any contractual variations.
6. Flexible Working (2027)
Employers must show refusals are objectively reasonable, not just rely on statutory reasons.
- Heightened evidence requirements.
- Stronger discrimination considerations.
Action: create a documented decision framework and train managers in lawful, consistent handling.
7. Union Recognition & Industrial Action (2026 and beyond)
The Bill simplifies union recognition and enhances union access.
- Recognition threshold may reduce from 10% to 2%.
- Consultation reforms increase union involvement in workplace change.
- Ballot and mandatory access reforms from August 2026.
Action: Strengthen employee-voice mechanisms and train managers on lawful union interactions.
8. Sick Pay, Parental Rights & Other Protections
No three-day waiting period for SSP → payroll and systems changes (April 2026).
Day-one parental and paternity leave rights (not pay). (April 2026).
Bereavement leave becomes a universal right (typically unpaid except for the existing Parental Bereavement Leave already in force). (2027).
Maternity dismissal protection expected to extend to six months post-return and apply to any dismissal (2027).
Zero-hours contracts – from 2027, among other changes, workers can request contracts reflecting actual working patterns and must be given reasonable notice of shifts. Details awaited but likely to reduce use of zero-hours workers.
9. Equality Action Plans (250+ Employees) (2027)
Employers must publish equality action plans to support gender equality and supporting women going through menopause.
Action: build KPIs, timelines, ownership and use existing gender pay reporting as the foundation.
10. Strategic Context – Costs & Automation
Rising labour costs and Budget changes increase pressure on employers:
• National Living Wage (NLW): announced increase to £12.71/hr from April 2026.
• Budget changes to pension salary-sacrifice and future NI treatment (cap on salary-sacrifice benefits from 2029) will affect reward design – review benefits packages.
Action: update payroll forecasts and pricing model
Strategic Priorities:
- Strengthen restructuring governance and consultation processes before April 2026.
- Upgrade harassment prevention, training, and reporting systems.
- Rebuild the hiring–onboarding–probation pipeline to manage early dismissal risks (plan on a qualifying window of less than 6 months
- Prepare for increased union presence and raise industrial-relations capability.
- Enhance HR data, diversity reporting, and equality action planning capability.
- Model cost impacts (SSP, NI, minimum wage, compliance) and assess automation opportunities.
- Prepare for longer dispute timelines due to extended tribunal and ACAS time limits.
To discuss any of the above or how we can help you prepare for these changes get in touch on info@legaledge.co.uk
