Have you made the changes you need to comply with the changes already in force?
The Employment Rights Act 2025 is the most significant shake-up of employment law in decades, which is currently being implemented in phases. A first wave of changes is already in force (April 2026), with further major reforms expected from October 2026 and into 2027.
The Act reflects a deliberate policy shift, materially expanding employee protections and increasing employers' responsibilities in the day-to-day management of their workforces.
In this blog, our Employment Lawyers explore the 10 priority actions employers should be taking now, followed by the other changes you should be aware of.
The Reforms at a Glance
| Change | When it Takes Effect | Action Needed Now? |
|---|---|---|
| Statutory sick pay payable from day one; lower earnings limit removed | 6 April 2026 | Yes – payroll and policies |
| Holiday and annual leave record-keeping (six-year duty) | 6 April 2026 | Yes – systems and retention |
| Day-one family and parental leave rights | April 2026 | Yes – policies and training |
| Collective redundancy protective award doubled (90 to 180 days) | 6 April 2026 | Yes – process and escalation |
| National living wage and statutory rate rises | April 2026 | Yes – payroll |
| Tribunal claim time limits extended (3 to 6 months) | Expected October 2026 | Prepare now |
| Trade union rights of access to workplaces | Expected October 2026 | Prepare now |
| Duty to take all reasonable steps to prevent sexual harassment; third-party harassment | Expected October 2026 | Prepare now |
| Written statement of the right to join a trade union | Expected October 2026 | Prepare now |
| Strengthened tipping law (duty to consult workers) | Expected October 2026 | Prepare now |
| Unfair dismissal: six-month qualifying period and removal of compensation cap | 1 January 2027 (affecting hires from July 2026) | Yes – recruitment and probation now |
| Equality action plans (employers with 250+ staff) | 2027 | Prepare voluntarily now |
1. Unfair Dismissal Rights
The most impactful change is that, with effect from 1 January 2027, all employees with 6 months’ continuous employment will qualify to make a claim of unfair dismissal. In addition, the cap on unfair dismissal compensatory awards will be removed.
These changes will inevitably increase the number and value of claims.
Action
Employers must urgently:
- Adopt robust recruitment processes
- Review probationary period procedures
- Manage known problem individuals without delay
- Train managers to identify, address and document issues promptly and effectively
- Ensure HR or legal advice is taken at an early stage.
Watch out for our upcoming video series on preparing for this change and managing your risk.
2. Extended Periods to Make Claims
Additionally, probably from October 2026, the period for making most Employment Tribunal claims will be extended from three to six months.
This is highly likely to increase the number of claims brought. Together with extended ACAS Early Conciliation periods and delays in the Employment Tribunal system, employers may find they are dealing with cases relating to employees who left their business years before.
Action:
Employers should establish systems to keep clear records of recruitment processes, probationary reviews, disciplinary and grievance matters, performance and redundancy processes.
They should collate information, documents and witness statements as soon as a potential dispute is recognised and secure the cooperation of managers and witnesses in relation to future legal proceedings.
3. Updates to Terms of Employment
We recommend that employers review offer letters, contracts of employment and other policies to reflect a new approach to recruitment and probationary periods and to accommodate other changes discussed in this note, for example, changes to statutory sick pay and new tipping laws.
Additionally, from October 2026, employees must be provided with a detailed written statement confirming their right to join a trade union. This should be provided at the same time as the employee receives their written statement of employment particulars and at intervals during employment.
Action:
Employers should update template offer letters, terms and conditions and policies.
The government has yet to publish details of the required content and form of the statement regarding the right to join a union; employers should watch for this.
Combined with recent changes in relation to union recognition procedures and new trade union rights of access (see below), employers should anticipate greater union confidence and voice in the workplace.
4. Statutory Sick Pay
From 6 April 2026, the 3-day waiting period for Statutory Sick Pay (SSP) was abolished.
SSP is now payable from the first day of absence. The lower earnings limit is also abolished, with SSP now available to all employees.
The rate of SSP is the lower of the statutory SSP rate and 80% of normal earnings.
Action:
As well as making payroll adjustments, employers should budget for higher statutory sick pay costs, update contracts of employment, and consider amending company sick pay schemes that currently reflect the SSP framework.
5. Annual Leave Record Keeping
From 6 April 2026, employers have been under a statutory duty to keep adequate records of workers’ entitlements to statutory annual leave, additional leave and holiday pay and pay in lieu of holiday for a period of 6 years.
Failure to keep adequate records is a criminal offence.
Action:
Employers should ensure they have robust systems and practices in place to record and monitor holiday and holiday pay entitlement.
This will be particularly important for atypical workers, such as those with irregular hours or part-year workers. Policies and internal processes should be updated to reflect the new record-keeping obligations and regularly audited.
6. Collective Redundancy Processes
Employers proposing to dismiss 20+ employees at one establishment within a 90-day period must carry out collective consultation with appropriate employee representatives.
Previously, a failure to comply could result in a tribunal award of up to 90 days’ gross pay per affected employee.
From 6 April 2026, the maximum award doubled from 90 to 180 days’ pay.
Action:
Further changes in this area in relation to relevant thresholds (due in 2027) and the practice of ‘fire and rehire’ (due in January 2027) mean that this is a very complex area of law.
Ongoing and planned processes may already be affected by these changes.
We recommend taking early legal advice on the statutory requirements to avoid the risk of extremely significant awards.
7. Trade Union Rights of Access
With effect from October 2026, trade unions will have brand-new rights of physical and digital access to workplaces for purposes including representation, recruitment, and collective bargaining.
Action:
This new right is subject to a detailed request procedure, including short response times.
Employers should be able to respond to such requests and take action and advice at an early stage.
Employers are also advised to carefully review the employee engagement strategy and consider which organisations (internal or external) and what arrangements optimise the capture of employee voice.
8. Prevention of Sexual Harassment
From October 2026, employers will be required to take all reasonable steps to prevent sexual harassment.
This proactive duty will increase the level of scrutiny on steps taken by employers before any complaint or claim of harassment arises.
Employers must also prevent third-party harassment of workers by clients, customers, suppliers, contractors or other third parties.
Action:
Employers must audit and adjust their approach to preventing harassment, including through anti-harassment policies, risk assessments, staff and manager training programmes, reporting channels and investigation procedures.
Policy review alone will not be sufficient. The focus will be on whether all reasonable preventative steps have been taken in practice.
9. Extended Rights For Parents
A number of changes benefitting parents came into force in April 2026.
New Day One rights include paternity leave (not paternity pay) and unpaid parental leave. Bereaved partners’ paternity leave also came into force, providing a Day One right of up to 52 weeks' leave where the child's mother or adoptive parent has died within 52 weeks of the birth or adoption placement.
Eligible employees also now have the right to take statutory paternity leave after a period of shared parental leave. Further enhanced protection from dismissal for pregnant women and new mothers and yet further parental rights will come into force in 2027.
Action:
Supporting parents in the workplace is an area of constant change. Employers must review and update policies on an ongoing basis and also consider whether adjustments are required to contractual enhancements.
10. Strengthened Tipping Law
The existing law requires employers to allocate qualifying tips, gratuities and service charges fairly and transparently, pass qualifying tips on in full, maintain a written tipping policy where tips are received more than occasionally and exceptionally, and keep records of tips received and allocated.
From October 2026, the tipping regime will be further strengthened, imposing a procedural obligation on employers to formally consult workers in accordance with strict statutory requirements before developing or revising their written tipping policy.
Action:
In addition to carefully observing the current law and Code of Practice, employers will be effectively restricted from making changes to tipping policies without first consulting with workers, with the aim of reaching an agreement on the tipping policy. Employers will also be required to review their written tipping policy at least once every three years, with the same consultation process applying when the review take place.
Other Employment Rights Act 2025 Changes To Be Aware Of
Simplified Trade Union Recognition Rules
From 6 April 2026, the process for statutory trade union recognition has been simplified and only a simple majority in a recognition ballot is now needed as the former 40% turnout threshold no longer applies.
Non-unionised employers should revisit their employee relations strategy rather than assume these changes are irrelevant to them.
Employers should also strengthen direct communication channels, employee voice mechanisms and consultation forums.
Managers should be trained in recognising requests for recognition and escalation points so that a business does not mishandle early union activity.
As good practice, employers should keep workforce records and organisational charts accurate in case of proceedings.
Sexual Harassment Disclosures Now Protected as Whistleblowing
Disclosures about sexual harassment are now expressly capable of amounting to protected disclosures for whistleblowing purposes.
Employers should assume that sexual harassment complaints may now be whistleblowing disclosures, and should align whistleblowing, grievance, dignity at work and anti-harassment policies so that a complaint can be dealt with correctly from the outset.
Whistleblowing policies should be amended to expressly state that disclosures relating to sexual harassment may qualify for protection.
Managers and HR staff should be trained to recognise when a harassment complaint may also be a protected disclosure.
Employers should also strengthen audit trails for treatment, role changes, performance management, and dismissals following a complaint.
Fair Work Agency: Increased Enforcement Powers
The new Fair Work Agency has been launched and has broad investigatory powers extending to areas including minimum wage, agency work and, in due course, holiday pay and SSP.
Employers should prepare for proactive enforcement by the Fair Work Agency, and work on the assumption that enforcement will no longer depend solely on an individual bringing a tribunal claim.
Employers should create an internal protocol for handling inspections or information requests, and ensure managers understand the enforcement risk and the importance of strong record-keeping.
It is recommended that a compliance health check be conducted on compliance with the national minimum wage, statutory sick pay, holiday pay, record retention, etc., before any investigation.
Equality Action Plans & Menopause Guidance: Preparing Ahead
Equality action plans become mandatory in 2027 for employers with 250+ employees, and it is recommended that they be implemented by all employers on a voluntary basis from now on.
Government menopause guidance has also been introduced, and recommends actions employers should begin adopting now.
Employers already within the gender pay gap reporting regime should treat 2026/27 as a rehearsal year for forthcoming mandatory equality action planning.
All employers should also review existing menopause support, manager guidance, absence management, and workplace adjustments for employees experiencing menopausal symptoms.
April 2026 Rate Increases & Payroll Compliance Risks
April 2026 also brought higher statutory rates and limits, including a national living wage increase, an increase in statutory sick pay, and increases in tribunal discrimination compensation limits.
Employers should check payroll implementation, especially for lower-paid workers and apprentices, to ensure compliance.
They should particularly audit salary sacrifice, deductions, uniforms, training time and other national minimum wage risk points, and also consider “pay compression effects” and the impact on differentials between junior and supervisory staff.
Payroll non-compliance is likely to attract much more visible enforcement once the Fair Work Agency powers are established.
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Isobel Barton
Solicitor
Isobel is a Solicitor in the award-winning Employment team at Myerson. Isobel earned a First-Class degree in the Mlaw Exempting Degree with a combined LPC from Northumbria University in Newcastle, graduating in 2019. She joined Myerson as a Trainee Solicitor in September 2022 and qualified as a Solicitor in September 2024.
About Isobel Barton