Upcoming Changes Under the Employment Rights Act 2025

On 18 December 2025, the long-awaited Employment Rights Bill received royal assent and became the Employment Rights Act 2025 (the "Act"). The Act will bring into effect a number of significant changes to employment law over the next two years. For example, one key change under the Act is the reduction in the qualifying period for an employee to bring a claim for unfair dismissal, which will be reduced from two years to six months, with effect from 1 January 2027.

This Legal Update provides a summary of the key changes that will come into effect in the first half of 2026, which companies will need to start preparing for in advance.

Changes Taking Effect on 18 February, 2026

Increased dismissal protection for industrial action: The Act will remove the current 12-week qualifying period for claims in relation to termination of employment for taking part in industrial action. It will, therefore, become automatically unfair to dismiss an employee for participating in industrial action, regardless of when the dismissal occurs.

Trade union activity: A number of changes will come into effect in relation to trade union activity. For example, the amount of notice required for industrial action will be reduced from 14 days to 10 days, giving businesses less time to prepare. It will no longer be required to have a picket supervisor, and industrial action mandates (i.e. the legal authority a trade union has to call for strike or other action following a successful vote) will be increased from 6 to 12 months. Additionally, information on ballot papers and notices of industrial action will be simplified, and the political fund rules will change.

Changes Taking Effect on 6 April, 2026

Paternity leave and unpaid parental leave: It will no longer be required for an employee to have worked for 26 weeks before becoming entitled to paternity leave, as it will become a day-one right. Similarly, unpaid parental leave will become a day-one right. In addition, there will no longer be a restriction on taking paternity leave after shared parental leave, enabling greater flexibility as to when the leave is taken. Companies should, therefore, review their family-friendly policies to ensure they align with the upcoming changes.

Statutory sick pay: Statutory sick pay will be payable from the first day of illness rather than from the fourth day. In addition, the requirement of earning £125 per week to qualify for statutory sick pay will be removed. Companies should ensure that their sick pay policies and template contracts of employment are updated to reflect these changes.

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. As there is currently no cap on the daily rate of pay for such awards, this could have significant financial implications for companies that fail to comply with their collective redundancy consultation obligations.

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. Companies should review any whistleblowing policies in place to ensure that they reflect the upcoming changes.

Changes Taking Effect in October 2026

There are a number of further significant changes which will come into effect in October 2026. Fire and rehire practices will largely no longer be permitted - that is, the process of re-contracting employees onto new terms by terminating their existing contracts and offering new, amended terms. In addition, there will be an extension of the duty to prevent sexual harassment in the workplace. It will become necessary for employers to take "all" reasonable steps rather than simply "reasonable steps." Notably, the time limit for making Employment Tribunal claims will also increase from three months to six, which is likely to result in a significant increase in the number of claims brought against businesses.

Conclusion

2026 and 2027 will bring a period of considerable change for UK employment law. Companies should ensure that they are aware of the upcoming changes and that the necessary steps are implemented within their businesses accordingly.