United Kingdom: Employment Rights Act 2025 - Upcoming Changes in 2026 and What Businesses Should Do to Prepare Now

On 3 February 2025, the government published an updated timeline for the implementation of significant reforms under the Employment Rights Act 2025 (the "Act").

The headline-grabbing reform that the Act will introduce is a change to unfair dismissal law, specifically reducing the qualifying period from two years to six months and removing the cap on the compensation that can be claimed. The unfair dismissal reforms are not due to take effect until January 2027, but, as noted below, businesses should factor this change into their workforce planning for 2026. In addition to considering unfair dismissal changes, this article provides a summary of the key changes that will come into effect this year, with a particular focus on the changes that will be implemented in October 2026. Given the significance of the changes ahead, businesses should begin preparing for these developments now in advance of implementation.

Changes Taking Effect in April 2026

Paternity leave and unpaid parental leave: The qualifying period of 26 weeks for statutory paternity leave and one year for statutory unpaid parental leave will be removed, meaning that these leave entitlements become day-one rights. To further increase flexibility, there will be no restriction on taking paternity leave after shared parental leave.

Statutory sick pay: The "waiting period" for statutory sick pay (currently three days) will be removed, meaning that statutory sick pay will be payable from the first day of illness. To further increase access to statutory sick pay, the current requirement of earning £125 per week to qualify for sick pay will be removed.

Collective redundancy protective award: The maximum protective award that can be issued by an Employment Tribunal for failure to consult in a collective redundancy situation—where 20 or more employees are at risk of redundancy—will double from 90 days' pay to 180 days' pay. Alongside the changes to unfair dismissal law planned for 2027, this change will materially increase potential financial exposure for companies planning mass redundancies.

Whistleblowing protection for sexual harassment: Sexual harassment will become a qualifying disclosure under the whistleblowing legislation. As such, employees will be able to benefit from protection against detriment and dismissal following a disclosure about sexual harassment.

In light of the above changes, we recommend that companies review their family-friendly policies and whistleblowing policies to ensure that they align with the upcoming changes.

Please see our prior Legal Update for further insights on these reforms.

CHANGES TAKING EFFECT IN OCTOBER 2026

Duty to Take "All" Reasonable Steps to Prevent Sexual Harassment

The Act will extend the scope of the current duty to prevent sexual harassment in the workplace. Currently, employers are required to take "reasonable steps" to prevent sexual harassment of their employees during the course of their employment. This duty will be strengthened to require employers to take "all reasonable steps" to prevent sexual harassment. The government has confirmed that it will publish regulations specifying what will be regarded as "reasonable steps" an employer should take to prevent sexual harassment. However, it has indicated that these regulations may not be introduced until 2027, after the duty has been implemented. Companies will therefore need to take action before the regulations become available. As a minimum, this should include reviewing policies that deal with sexual harassment/raising complaints and refreshing workforce training on this topic.

Liability for Third-Party Harassment

Under the Act, employers will also be liable if (i) their employees are harassed by third parties during the course of their employment, and (ii) the company failed to take all reasonable steps to prevent the third party from doing so. It will therefore be necessary for companies to conduct up-to-date risk assessments in relation to third parties, review and refresh policies applicable to third parties and review the mechanisms for employees to report such concerns.

Increase in Employment Tribunal Time Limits

The time limit for bringing a claim in the Employment Tribunal will increase from three months to six, except for breach of contract claims arising or outstanding on the termination of employment. The government has confirmed that this change will take effect no earlier than October 2026. It is anticipated that this change will significantly increase the number of claims in the Employment Tribunal, particularly when coupled with the further changes that will be introduced in January 2027 under the Act; e.g., reducing the qualifying period for unfair dismissal claims to six months.

Enhanced Protections for Union Activity

The Act introduces a number of enhanced protections in relation to trade unions that will affect how employers engage with trade unions and their members.

• Right to a statement of trade union rights: Employers will be required to give both new and existing workers a written statement advising them that they have the right to join a trade union. The specific content and form of the statement and how and when it must be given will be detailed in further regulations.
• Trade union right of access to workplaces: Until now, trade unions have not had a general right to enter workplaces unless a company voluntarily agrees or the Central Arbitration Committee orders access. However, under the Act, trade unions will have a right to access workplaces, both physically and by communicating digitally with workers. The new provisions will enable trade unions and employers to enter into "access agreements" for union officials to access an employer's workforce for various purposes including to meet, support, represent, recruit or organise workers, and to facilitate collective bargaining.
• Time off for trade union duties and facilities: The Act expands union representatives' existing rights to paid time off to carry out their duties by introducing a requirement to provide the employee with reasonable accommodation and other facilities for carrying out those duties in all circumstances.
• Protection against detriment for taking industrial action: The Act will introduce protection from detriment for workers where the "sole or main purpose" is to prevent, deter or penalise industrial action. Employers will, therefore, need to exercise caution in dealing with workers involved in industrial action.

On the Horizon

Whilst this article focuses on the changes taking effect in 2026, employers should also be aware of the significant reforms to unfair dismissal law that will come into effect in January 2027. The Act will reduce the qualifying period for unfair dismissal claims from two years to six months, meaning that employees will be able to bring claims much earlier in their employment. Importantly, any employee who has accrued six months' service by 1 January 2027 will be covered by the new regime from the outset, which is why employers should be reviewing their workforce positions now. In addition, the statutory cap on compensatory awards for unfair dismissal will be removed, which will materially increase the cost of exit for employers and bring high-paid employees back into the unfair dismissal regime. Employers should begin planning for these changes now, including reviewing their probationary processes, performance management procedures and exit strategies to mitigate the increased risk and cost of potential claims.

Conclusion

The changes taking effect in October 2026 mark a significant step in the government's broader reform agenda and will require employers to take proactive steps to ensure compliance. In particular, employers should review their existing policies and procedures in place in relation to sexual harassment. The extended limitation period for Employment Tribunal claims will increase potential exposure for employers and is very likely to lead to a significant increase in claims. More generally, the outcomes of ongoing consultations and further regulatory guidance must be monitored. Looking ahead to 2027, employers should also begin preparing for the significant changes to unfair dismissal law, including the reduction of the qualifying period from two years to six months and the removal of the compensation cap, which will materially increase both the cost of dismissal and potential exposure to unfair dismissal claims.