TRW & Co · Employment law
Employment Rights Act 2025: Timeline and Action Plan for Employers
The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and is being phased in through 2026 and 2027. As of October 2026, day-one sick pay, family leave and collective redundancy changes are in force, tribunal time limits have doubled, and a six-month unfair dismissal qualifying period with no compensation cap starts on 1 January 2027.
Key pointThe new unfair dismissal rules apply where the effective date of termination is on or after 1 January 2027, so notice given in late 2026 can already fall under the new six-month, uncapped regime.
At a glance
Royal Assent
The Act received Royal Assent on 18 December 2025 and is commenced in stages by regulations, several of which also contain transitional rules.
April 2026 changes
Statutory sick pay from day one without a lower earnings limit, day-one paternity and parental leave, and a 180-day maximum protective award took effect.
Six-month time limit
From 1 October 2026, most employment tribunal claims can be brought within six months rather than three, for acts on or after that date.
Unfair dismissal 2027
From 1 January 2027 the qualifying period falls from two years to six months and the cap on the compensatory award is removed.
Still awaiting regulations
Fire and rehire, zero-hours guaranteed hours, bereavement leave and limits on confidentiality clauses were not in force as of October 2026.
Swipe or scroll →
The short answer: what the Employment Rights Act 2025 does and when
The Employment Rights Act 2025 is the biggest overhaul of UK workplace law in a generation. It received Royal Assent on 18 December 2025 and is being brought into force in phases through 2026 and 2027 by commencement regulations. As of October 2026, the sick pay, family leave, collective redundancy, whistleblowing and Fair Work Agency changes are in force, the employment tribunal time limit has doubled, and the major unfair dismissal reforms are fixed for 1 January 2027.
For employers, the practical consequence is that the reforms arrive in waves. Some require payroll and policy changes now. Others, such as the six-month unfair dismissal qualifying period and the removal of the compensation cap, change the risk of every dismissal decision from the start of 2027. A third group, including the zero-hours and fire-and-rehire provisions, still depends on regulations that have not yet been made.
This guide sets out what has changed, what is coming and what to do now. It is written for employers in Great Britain; Northern Ireland has separate employment legislation, so most of these reforms do not apply there.
Who is affected
The Employment Rights Act 2025 affects almost every employer in Great Britain, regardless of size or sector. Some measures apply to all workers, including agency and casual staff, while others apply only to employees. Sectors with high use of flexible contracts, such as hospitality, retail, logistics and care, face the largest operational changes. Professional services, technology and financial services employers are most affected by the unfair dismissal reforms, because uncapped compensation matters most for well-paid staff.
The legal framework: an Act brought in by regulations
The Employment Rights Act 2025 amends a series of existing statutes rather than replacing them. Most of its changes are made to the Employment Rights Act 1996, the Equality Act 2010, the Trade Union and Labour Relations (Consolidation) Act 1992 and the Social Security Contributions and Benefits Act 1992. Many sections only set out a framework, with the detail left to regulations and codes of practice.
Each provision takes effect only when a commencement order brings it into force. By October 2026, the government had made a series of commencement regulations, published on legislation.gov.uk, covering dates from January 2026 to January 2027. Those regulations, not press releases, are the reliable source for when a change applies. Several also contain transitional rules, for example tying the new unfair dismissal rules to the effective date of termination.
Enforcement is also changing. The Fair Work Agency, established in April 2026, brings together several state enforcement functions, including national minimum wage enforcement, under one body. Individual rights remain enforceable in the employment tribunal.
Employment Rights Act 2025 timeline: what is in force
The table below sets out the key Employment Rights Act 2025 dates, as confirmed by commencement regulations made by October 2026.
| Date | Change | Status |
|---|---|---|
| 18 December 2025 | Royal Assent; repeal of the Strikes (Minimum Service Levels) Act 2023 | In force |
| 18 February 2026 | First tranche of industrial action and trade union reforms | In force |
| 6 April 2026 | Statutory sick pay from the first day of sickness and removal of the lower earnings limit; day-one paternity leave and unpaid parental leave; maximum collective redundancy protective award doubled from 90 to 180 days; sexual harassment disclosures protected as whistleblowing; duty to keep annual leave records | In force |
| 7 April 2026 | Fair Work Agency established | In force |
| 1 October 2026 | Time limit for most employment tribunal claims extended from three to six months | In force |
| 30 October 2026 | Duty to take all reasonable steps to prevent sexual harassment; protection from third-party harassment; trade union access and recognition reforms | Commencement regulations made |
| 1 January 2027 | Unfair dismissal qualifying period cut from two years to six months; cap on the compensatory award removed | Commencement regulations made |
| 2027 (dates to be confirmed) | Fire and rehire restrictions; zero and low hours rights; bereavement leave; pregnancy dismissal protections; limits on confidentiality clauses; other reforms | Awaiting regulations |
Changes already in force in 2026
Statutory sick pay
From 6 April 2026, statutory sick pay is payable from the first day of sickness absence, rather than after three waiting days, and the lower earnings limit has been removed. GOV.UK guidance now describes SSP as the lower of the weekly statutory rate or 80% of normal weekly earnings. Employers that previously relied on the waiting days or excluded low earners need updated payroll settings and policies; see our guide to statutory sick pay changes.
Family leave
Paternity leave and unpaid parental leave became day-one rights on 6 April 2026, with the earlier qualifying periods removed. Policies, handbooks and HR systems that still refer to qualifying service need to be updated.
Collective redundancy and whistleblowing
The maximum protective award for failing to inform and consult on collective redundancies doubled from 90 to 180 days' pay from 6 April 2026. That makes non-compliance substantially more expensive in a restructuring. From the same date, a disclosure about sexual harassment can be a protected disclosure under the whistleblowing regime.
Tribunal time limits
From 1 October 2026, the time limit for bringing most employment tribunal claims increased from three months to six months, for cases where the relevant act or dismissal occurs on or after that date. Claims remain subject to Acas early conciliation. Employers should expect claims to arrive later and should keep records for longer.
What comes next: October 2026 and January 2027
Sexual harassment: all reasonable steps
From 30 October 2026, the existing duty to take reasonable steps to prevent sexual harassment becomes a duty to take all reasonable steps, and employers must not permit harassment of their employees by third parties such as clients and customers. The Act also gives ministers power to specify steps that are to be regarded as reasonable. Our guide to the sexual harassment duty sets out what a defensible prevention programme looks like.
Trade union access and recognition
Also from 30 October 2026, trade unions gain a statutory framework for access to workplaces, and changes to the recognition process take effect. Employers in sectors with active union organising should prepare for access requests and review their approach to collective consultation. Our trade unions and industrial relations team advises on both.
Unfair dismissal: six months and no cap
The commencement regulations for the unfair dismissal reforms bring the changes into force on 1 January 2027. The qualifying period for ordinary unfair dismissal falls from two years to six months, and the statutory cap on the compensatory award is removed. The new rules apply where the effective date of termination falls on or after 1 January 2027, even if notice was given earlier. An employee who started work on or before 1 July 2026 is therefore likely to have unfair dismissal protection by early 2027. Our guide to unfair dismissal explains the fair reasons and how compensation is assessed.
From 2027, a dismissal of a well-paid employee with six months' service can carry uncapped compensatory exposure. Probation periods and early-stage performance management now matter far more.
Reforms still awaiting regulations
A significant part of the Employment Rights Act 2025 cannot operate until the government makes further regulations, often after consultation. As of October 2026, these were not in force:
- Fire and rehire. Dismissing an employee for refusing certain contract variations, or replacing them to impose such changes, will become automatically unfair, subject to narrow financial-difficulty exceptions. See our guide to fire and rehire.
- Zero and low hours. New rights to an offer of guaranteed hours, reasonable notice of shifts and payment for short-notice cancellation, extended to some agency workers. See our guide to zero-hours contracts.
- Bereavement leave. A new statutory right to bereavement leave, including for pregnancy loss.
- Pregnancy and maternity. Stronger protection from dismissal for pregnant employees and new mothers.
- Confidentiality clauses. Limits on agreements that stop workers speaking about harassment or discrimination, which will affect settlement agreements.
- Flexible working. A requirement that refusals of flexible working requests are reasonable, with a consultation process.
- Collective redundancy and umbrella companies. Changes to how collective consultation thresholds are counted, and regulation of umbrella companies.
Dates for these measures should be treated as provisional until commencement regulations are made.
Why the regulations matter
For these provisions, the Employment Rights Act 2025 sets the principle but leaves the operational detail to secondary legislation. For guaranteed hours, for example, the regulations will decide the reference period, how an offer must be made and which workers are covered. For confidentiality clauses, they will decide which agreements are affected and what exceptions apply. Employers should therefore avoid redesigning contracts around the bare text of the Act and should instead respond to consultations, track the draft regulations and budget for changes in 2027.
An action plan for employers
- Audit payroll and policies for the 2026 changes. Confirm SSP is paid from day one with no lower earnings limit, family leave policies reflect day-one rights and annual leave records are being kept.
- Revisit restructuring plans. With protective awards doubled, collective consultation must be planned carefully, with accurate headcounts and properly elected representatives.
- Refresh harassment prevention before 30 October 2026. Carry out a risk assessment, update policies, train managers and address third-party risks in client-facing roles.
- Prepare for the 1 January 2027 unfair dismissal changes. Review probation periods, train managers in fair procedure and decide how to handle performance concerns with recent hires before they reach six months' service.
- Price exits on the new risk. For senior hires, model uncapped unfair dismissal exposure and consider how settlement terms, notice periods and contractual pay in lieu of notice interact.
- Map workforce flexibility. Identify zero and low hours arrangements, agency use and any plans to vary contracts, ahead of the guaranteed hours and fire and rehire regulations.
- Track commencement. Assign someone to monitor regulations, codes of practice and consultation outcomes, and review the plan each quarter.
Under the transitional rules, the new unfair dismissal rules turn on the effective date of termination, not the date notice is given. A dismissal decided in December 2026 with notice expiring in January 2027 will be judged under the new regime.
An illustrative scenario
This scenario is illustrative only; the parties are generic.
A London technology company hired a senior engineer on a high salary in May 2026 with a six-month probation period. By October, managers had concerns about performance. Under the old rules, the company would have had until the second anniversary before ordinary unfair dismissal protection applied. Under the Employment Rights Act 2025, the engineer would have six months' service by the time any notice expired in 2027, and the compensation cap would no longer limit the loss-of-earnings claim.
The company's advisers recommended a documented capability process: clear objectives, regular reviews, support and a fair hearing before any decision. They also reviewed the contract to confirm the notice period and whether a payment in lieu of notice clause existed. The decision was made on the evidence, with a fair procedure, rather than by relying on the timing of the qualifying period. Where an exit was agreed, it was documented in a settlement agreement priced on the new risk profile.
Risks and common mistakes
Treating announced dates as law
Government roadmaps and press releases indicate intent, but a provision only takes effect when commencement regulations bring it into force, and dates have moved during implementation. Build compliance plans around the regulations on legislation.gov.uk and treat any undated reform as provisional.
Leaving early-service dismissals to the last minute
Some employers will be tempted to dismiss staff before they reach six months' service. That approach does not remove discrimination, whistleblowing or other day-one claims, and dismissals effective on or after 1 January 2027 fall under the new rules. A consistent, documented probation process is the better protection.
Ignoring the cost of collective consultation failures
With the maximum protective award at 180 days' pay per affected employee, collective redundancy errors now carry much larger liabilities. Count proposed dismissals carefully, start consultation in good time and document it properly. Further changes to how the threshold is counted are expected.
Underestimating the harassment duty
The move to "all reasonable steps", together with third-party harassment protection, raises the standard employers will be judged against. Generic policies without training, reporting routes and monitoring are unlikely to be enough, and compensation uplifts can apply where the duty is breached.
Cross-border employers
International groups with UK staff need to apply the Act to employees working in Great Britain regardless of where the employer is based or the contract's governing law, because many statutory rights apply by reference to where the employee works. Global policies drafted elsewhere, including in Bangladesh, the EU or the Gulf, often assume longer qualifying periods or no harassment duty and need UK-specific adjustment.
For UK–Bangladesh businesses, we coordinate UK employment advice with our Dhaka colleagues, particularly on secondments, mobile employees and group-wide HR policies. See our page on Bangladeshi businesses in the UK.
What to do next
- Confirm the April 2026 changes are fully implemented in payroll and HR systems.
- Complete a sexual harassment risk assessment before 30 October 2026.
- Review probation, capability and disciplinary procedures before 1 January 2027.
- Reprice exit strategies and settlement offers for uncapped unfair dismissal exposure.
- Identify zero-hours, agency and contract-variation plans that the 2027 reforms may affect.
- Monitor commencement regulations each quarter.
The Employment Rights Act 2025 changes the cost of getting employment decisions wrong. TRW & Co's London office is authorised and regulated by the Solicitors Regulation Authority, and our employment law team advises employers on implementation, policies, restructurings and exits. To discuss your plan, contact us at info@trw.co.
Frequently asked questions
01When did the Employment Rights Act 2025 come into force?
The Act received Royal Assent on 18 December 2025, but most provisions only take effect when commencement regulations bring them into force. Changes have been phased: a first set of trade union reforms in February 2026, sick pay, family leave and collective redundancy changes in April 2026, longer tribunal time limits from 1 October 2026, the harassment duty from 30 October 2026, and the unfair dismissal reforms from 1 January 2027. Other measures await regulations.
02What is the new unfair dismissal qualifying period?
From 1 January 2027, employees need six months' continuous employment, rather than two years, to bring an ordinary unfair dismissal claim in Great Britain. The change applies where the effective date of termination falls on or after 1 January 2027. Some dismissals, such as those for whistleblowing or certain health and safety reasons, have never required a qualifying period. Northern Ireland has separate legislation.
03Is the unfair dismissal compensation cap being removed?
Yes. The Employment Rights Act 2025 removes the statutory limit on the compensatory award for unfair dismissal, with effect from 1 January 2027 for dismissals where the effective date of termination is on or after that date. Until then, the compensatory award remains capped at the lower of a year's pay or the statutory figure. The basic award, which is calculated using a capped week's pay, continues to apply.
04What changed for statutory sick pay?
From 6 April 2026, statutory sick pay is payable from the first day of sickness absence rather than after three waiting days, and the lower earnings limit has been removed, so lower-paid employees now qualify. GOV.UK guidance describes the entitlement as the lower of the weekly statutory rate or 80% of normal weekly earnings. Employers should update payroll settings, sickness policies and absence management procedures.
05How long do employees now have to bring a tribunal claim?
From 1 October 2026, the time limit for most employment tribunal claims increased from three months to six months, for cases where the relevant act, failure or dismissal occurs on or after that date. Earlier cases remain subject to the old three-month limit. Prospective claimants must still notify Acas for early conciliation before presenting most claims.
06What should employers do now?
Confirm the April 2026 changes are in payroll and policies, complete a sexual harassment risk assessment before 30 October 2026, and review probation and capability procedures before the unfair dismissal reforms on 1 January 2027. Employers planning restructurings or contract changes should take advice on collective consultation and the forthcoming fire and rehire restrictions. Monitor commencement regulations because several reforms are still awaiting dates.
Sources and official materials
- Employment Rights Act 2025 — The Act as enacted and amended
- Employment Rights Act 2025 (Commencement No. 4 and Transitional and Saving Provisions) Regulations 2026 — Unfair dismissal reforms from 1 January 2027
- Employment Rights Act 2025 (Commencement No. 6 and Transitional and Saving Provisions) Regulations 2026 — Harassment duty and union reforms from 30 October 2026
- Employment Rights Act 2025 (Commencement No. 5 and Transitional Provisions) (Amendment) Regulations 2026 — Six-month tribunal time limits from 1 October 2026
- Statutory Sick Pay (GOV.UK) — Current SSP entitlement
- Fair Work Agency (GOV.UK) — State enforcement body
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.