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Editor’s note, 3 July 2026: Reading a summary of the Employment Rights Act 2025 is one thing. Using the summer to prepare your business for the next wave of reforms is quite another. This article was originally published in December 2025 as Employment Rights Act 2025: Where Are We? It has been comprehensively updated to reflect the reforms already in force (from April 26), those coming up very soon (in October 26) and beyond, and most importantly, the practical steps employers should be taking now.

The Employment Rights Bill became law in December 2025, as the Employment Rights Act 2025 (ERA). It introduces wide-ranging changes to employment law which the Government plans to implement in phases during 2026 and 2027, in line with its published implementation roadmap.

Initial changes focused on trade union activity, including the repeal of most of the restrictions on strike action introduced since 2010.

The latest implementation phase, from 6th April 2026, brings into force a disparate mix of changes. The overall effect is greater regulatory oversight, increased costs for employers, enhanced time off rights for parents and reduced barriers for trade unions. The April changes in summary are:

April 2026: Employment Rights Act measures implemented:

• The ‘Fair Work Agency‘ (FWA) opened its doors on 7th April 2026, and has published its enforcement policy statement, setting out its principles of proportionality, accountability and transparency, among others. It brings together 3 existing enforcement bodies into a single agency and point of contact for workers who believe their rights have been breached.
  
  It is responsible for enforcing a number of employment rights, including Statutory Sick Pay. The Agency’s remit is expected to expand further, including holiday pay enforcement, while National Minimum Wage enforcement will transfer fully from HMRC to the FWA in April 2027.
  
  The Agency has significant new powers including the ability to bring Employment Tribunal claims on behalf of workers, inspect workplaces for compliance, require information and documentation, issue compliance notices and impose financial penalties on employers that transgress.
  
  
• Statutory Sick Pay (SSP) becomes a day one right, available to more employees, with the removal of the 3 day waiting period and the lower earnings threshold to qualify. From 6th April 2026 the rate of SSP is now set at whichever is the lower of the flat rate £123.25 per week or 80% of the employee’s weekly income.
  
  
• All workers gain ‘day 1′ rights to Paternity Leave and Unpaid Parental Leave, scrapping existing service requirements. (Women are already entitled to Maternity leave – note not maternity pay- from day 1 of employment).
  
  You should update family leave policies and employee handbooks to remove references to minimum qualifying service requirements for paternity leave and unpaid parental leave.
  
  
• Also from 6th April the maximum protective award for breach of collective redundancy consultation requirements doubles from 90 to 180 days gross pay, making it far harder (and costlier) for employers to avoid or buy out consultation obligations, as happened in the P&O Ferries dispute.
  
  
• From 6th April, whistleblowing protections are extended to cover sexual harassment. This means employees who report sexual harassment now have stronger legal protection if they suffer any detriment for doing so. The whistleblowing disclosure can relate to sexual harassment that has occurred, is occurring or is likely to occur.
  
  For employers, this change increases the risk of claims, as complaints may give rise to both harassment and whistleblowing claims if not handled carefully. Where claims succeed, overall compensation may be higher, as whistleblowing claims are uncapped.
  
  

• Large employers, (those with 250+ employees) can choose voluntarily to publish “equality action plans” ( these will become mandatory from Spring 2027) alongside their annual gender pay gap data. If published, the equality action plan must accompany the organisation’s gender pay gap data on the Government’s gender pay gap service, and must set out the steps the employer is taking to address its gender pay gap and to support employees going through the menopause.
  
  To ‘assist employers in preparing action plans’, the government has published initial guidance and list of 18 actions, which are termed “evidence-informed” actions, to reduce your gender pay gap and support employees experiencing Menopause.
  
  

• The process for Trade Unions to be recognised as bargaining units in organisations has been simplified. There will no longer be a requirement to show that at least 50% of workers in the barganing unit are likely to support recognition. The requirement for at least 10% of workers in the bargining unit to be union members may be reduced (to as low as 2% – which seems a ‘barely there’ figure). The 40% support requirement in the final ballot is removed, so that a simple majority of those voting is sufficient.
  
  Put simply, the Government wants to make it easier for unions to secure recognition from employers and negotiate collectively on behalf of workers – on things such as pay and conditions and holidays. These ERA reforms reduce the barriers to recognition and make it more likely that employers, including those with little or no previous experience of trade union recognition, may be required to engage with formal collective bargaining arrangements.
  
  Trade unions will be further strengthened by expanded workplace access rights due to come into force in October 2026. More on these changes in the October 2026 section below.
  

In addition to the Employment Rights Act reforms, April 2026 also brought the usual annual employment law increases, including changes to National Minimum Wage rates, Statutory Sick Pay, family-related statutory payments and employment tribunal compensation limits.

These updates operate alongside the new ERA measures and will impact your payroll, budgeting and employment-related risk. You can find a full summary in our separate guide: April 2026 Employment law updates – important for employers.

Download our Employment Law Factsheet for a summary of the latest statutory rates, payments and compensation limits.

Immediate priorities arising from the April reforms:

The April reforms are now live. The challenge for employers is no longer understanding the changes, but implementing them effectively. Update key policies, procedures where necessary, and ensure managers understand the practical implications of the new rights and obligations, specifically:

Sick Pay from day 1 of illness / removal of earnings limit: prepare for more short term sickness absence.

Payroll systems should already have been updated to reflect this change. Ensure and managers handling internal processes, settlement discussions etc. are informed of the new limits. Plan for more short term sickness absence.

• Review and update sickness absence policies now.
• Adjust any enhanced sick pay schemes you have that align with the new SSP.
• Begin tracking absence trends and strengthen your return-to-work procedures.
• Provide manager training so they can confidently manage short-term absences, capability issues, and medical referrals.
• Certain employers may find ‘bonusing’ employees to have a good non-sickness record may be an option where staffing is critical for service delivery.
  

Redundancy: revisit collective consultation procedures and train managers

Collective redundancy consultation has become much higher risk for employers, with the maximum protective award doubling, employers can no longer assume that consultation failures can be managed or “bought out” later.

• Review your reundancy procedures now and ensure managers are trained to recognise when collective consultation obligations may be triggered. Any proposal involving 20 or more redundancies within a 90-day period must ring alarm bells to prompt more careful consideration.
  

Fair Work Agency: appoint a lead and get them up to speed on the FWA’s powers

• Who will be your FWA lead? Yes, we know, it’s yet more regulation and red tape to manage, particularly for SMEs. However, employers must identify who within the organisation will deal with communications from the Fair Work Agency and ensure appropriate cover is available during periods of absence.
  
• Your nominated lead, or team, should keep abreast of developments as the FWA’s role and enforcement activities evolve, and plan how enquiries, requests for information and workplace inspections should be handled internally. We don’t yet know exactly how active this regulator will be, but someone or two in your business should be watching it.
  
• Carry out a standard compliance check on your statutory payment obligations, particularly Statutory Sick Pay and National Minimum Wage requirements, and ensure supporting records are accurate, accessible and up to date.
  
• Review record-keeping procedures to ensure payroll, sickness absence and other employment records can be produced promptly if requested.
  

Update Family leave policies

• Update paternity and unpaid parental leave policies and employee handbooks to remove references to minimum qualifying service requirements.
  
• The service requirements have gone but notice is still required, so ensure managers understand the notice requirements that still continue to apply when employees request family leave. Ensure also managers and employees understand that these changes relate to paternity and parental leave, not pay. Statutory Maternity Pay and Statutory Paternity Pay remain subject to separate eligibility requirements.
  
• While updating family leave policies to reflect the new Day 1 rights, take the opportunity to revisit the wider family-friendly employment rights introduced in 2024 to support working parents and carers. Many employers are still adapting to changes such as Carer’s Leave, Neonatal Care Leave and the enhanced flexibility around paternity leave. For a recap, see our article on the family-related employment law reforms introduced in recent years.
  
  

October 2026: ERA measures coming into force

While employers are still adapting to the April reforms, the implementation programme continues. A further package of ERA measures is due to come in October 2026, with several carrying significant practical and legal implications. These are:

• Doubling the time limit for employees to bring Employment Tribunal Claims from 3 to 6 months.
  
• Upping the requirement on employers to take “all” reasonable steps to prevent sexual harassment, (not just reasonable steps).
  
• Employers to be held liable if Employees are harassed by third parties, (the so-called “banter ban”).
  
• A new duty to inform workers of their right to join a trade union. Employers will be required to provide workers with a written statement informing them of their right to join a trade union. The Government has yet to publish regulations prescribing what the statement must contain. Be aware of this new duty and be ready to update your onboarding documentation once the regulations are published.
  
• A package of Union reforms including allowing Unions to access workplaces to organise and ballot members, new rights and protections for Trade Union reps, extending protection against detriment for taking part in industrial action.
  
  The Government has published a draft statutory Code of Practice explaining how the new workplace access rights are expected to operate in practice. Under this Code of Practice employers with 21 or more employees could have to facilitate access to a Trade Union on a weekly basis.
  
• Tipping. Employers will need to consult staff on the distribution of tips.
  

Immediate priorities, preparing for the October 2026 ERA changes

6 month qualifying period for unfair dismissal: start preparing now

Although the significant reforms to unfair dismissal regime do not take effect until January 2027, employers must prepare now. From 1st January 2027, any employee with six months’ continuous service will qualify for unfair dismissal protection. This means employees hired on or before 1st July 2026 will qualify for unfair dismissal protection from 1st January 2027. Employees recruited after July 2026 will gain protection once they reach six months service.

This fundamental shift effectively reduces the time available during a probationary period to five months in which employers can assess a new hire and address any performance, conduct or suitability concerns before unfair dismissal protection applies.

• Review your probationary arrangements (including employment contracts) together with your performance management procedures.
• Begin training managers now to manage probation more pro-actively, so they are confident in addressing underperformance, and having those difficult conversations, earlier.

Read our dedicated guide to the new unfair dismissal regime and managing probationary periods effectively here (link).

Doubling of the time limits to bring ET claims. Prepare for longer ‘tribunal risk’ windows

With the doubling of time limits employees have to bring a claim from 3 to 6 months, early resolution becomes more viable and important.

• Review and strengthen internal grievance and appeal processes
• Be more vigilant and keep detailed records of conversations with employees. Six months is a significant time for employees’ advisors to build strong claims, to submit Data Protection Subject Access requests, to negotiate via Acas or directly, and to bring ET claims that would previously have lapsed. Take witness statements from managers and supportive employees, in case they leave.
• Review and extend document retention to keep records at least 9 months post-incident – longer if you think litigation is a possibility
• Begin tracking absence trends and strengthen your return-to-work procedures
• Strengthen manager training over the summer to ensure they are confident managing short-term absences, capability issues, as mentionned above, and medical referrals.
• Reassess HR and legal fees budgets, as well as insurance cover, particularly where an ET claim also refers to an issue covered by your Employer’s public liability insurance or another insurance. A longer claim window may well increase claim volume and raise premiums.
  

Remember too that the Acas Early Conciliation period doubled from six to twelve weeks in December 2025. Together with the new six-month tribunal time limit, claims may not emerge until many months after an employee has left.

Sexual Harassment: Taking “all” reasonable steps and third party harassment.

You’ve got a harassment policy and carried out the risk assessment, but you’re not finished yet. The employer duty to prevent sexual harassment becomes more demanding from October 2026, with the requirement upping to taking all reasonable steps to prevent it. In addition, employers may become liable where employees are harassed by third parties, such as customers, clients, suppliers, service users or visitors. This applies not only to sexual harassment, but to all forms of discriminatory harassment.

We will have to wait until 2027 for the Government to publish guidance on what “all reasonable steps” will mean in practice. Now is the time to revisit your risk assessment, policies, reporting procedures and staff training, and to consider what all reasonable steps may mean in your particular business and sector.

For a practical guide to what these changes mean and how to prepare your business, read our New employer duty to prevent sexual harassment: prepare and protect your employees and your business.

Trade union workplace access: decide who will deal with access requests

• For many SME employers, this will be unfamiliar territory. If your workforce spans a range of roles, pay levels and working arrangements, now is the time to decide who will deal with trade union access requests if they arrive, and ensure managers understand the new framework, and
• Consider how your business listens and responds to employee concerns. Do your staff have have effective ways to raise concerns and be heard? Where employees do not feel heard within the business, they may be more receptive to outside representation. Ask for employee feedback and begin, if you need, to foster better channels of communication.
  

Tipping: review your policy and consultation arrangements

• For hospitality businesses, review your tipping policy and identify how you will consult staff before making changes. From October 2026, consultation will become a legal requirement when introducing or revising tipping policies, and policies must be reviewed at least every three years.
  

2027: ERA measures set to become law

1st January 2027: Major reforms to unfair dismissal law

Taken together, these reforms represent the most significant changes to unfair dismissal law for many years and substantially increase the legal and financial risks associated with dismissing employees.

• Reduction in the unfair dismissal qualifying period from two years to six months. See our guide (link)
  
• Removal of the cap on unfair dismissal compensation awards (currently £123,543) will significantly increase employers’ financial exposure in unfair dismissal claims involving higher earners.
  
  Good process is about to become even more valuable. Now is the time to tighten poor performance, dismissal and redundancy procedures and ensure managers follow them consistently.
  
  Senior exits are likely to become more expensive if handled badly, particularly where dismissal processes are weak or poorly documented. Settlement negotiations may also become more difficult and costly, reflecting the potential for substantially higher awards and employees’ awareness that the cap has been removed.
  
  The removal of the cap isn’t as risky as it might appear. In any unfair dismissal claim, employees remain under a duty to mitigate their loss by seeking alternative work, and Employment Tribunals are alive to this when when assessing compensatory awards..
  
  Where you think a claim is possible following a high earner’s departure, gather evidence of the job market and suitable vacancies at the time they leave and in the weeks and months that follow. Screenshot and save relevant job adverts, and any social media posts, such as on Linked in, showing evidence of new employment.
  
  Note, this change does not affect discrimination or whistleblowing claims, where compensation is already uncapped.
  
• The ban on “fire and rehire” (dismissal and re-engagement), in all but cases of immiment financial collapse, was delayed until January 2007, from October 2026, to align with the unfair dismissal reforms. Employers planning to make changes to terms and conditions have until the end of 2026 to make the changes under the current legal rules which, while still available, remain complex and highly sensitive.
  

Further Employment Rights Act reforms expected during 2027

While the direction of travel is now clear, several important aspects of the Employment Rights Act still depend on further regulations, Codes of Practice and the outcome of Government consultations. Employers should focus on the reforms that are already in force, prepare over the summer for those with confirmed implementation dates, and expect further detail to emerge in the Autumn /Winter.

• New guaranteed hours offer for zero- and low-hours employees and agency workers, including right to reasonable notice of shifts, and payment for shifts that are cancelled, or moved at short notice.
  
• Employers will be required to reasonably justify refusals to flexible working requests.
  
• Changes to the trigger for collective redundancy consultation requirements.
  
• Large employers with over 250 staff will be required to publish menopause action plans as well as report on gender pay gaps (introduced on a voluntary basis in April 2026).
  
• Further regulations to specify what amounts to ‘reasonable steps‘ to determine whether an employer has taken all reasonable steps to prevent sexual harassment.
  
• Increased protection against dismissal for pregnant employees and those returning from maternity leave.
  
• Employees also gain Day-1 right to Bereavement Leave including pregnancy loss.
  
• Regulations for umbrella companies, to ensure that individuals working through these companies have comparable rights and protections to people working through employment agencies.
  
• Strengthened protections against trade union blacklisting, making it unlawful to discriminate against workers because of their trade union membership or activities.
  
• A new industrial relations framework to, quoting the Government’s words, ‘help employers and trade unions work together’.

Against all of this, ET claims are already soaring. Single claims filed at ETs are up 39% year on year. It’s taking 18 months to 2 years to get to final hearing and this is rising continually. The implemention roadmap refers to building “capacity and capability” to enforce the new rights, but without considerable investment in the court system this promise may be hard to deliver.

We can assist.

The Employment Rights Act represents the biggest overhaul of employment law in a generation. For SMEs in particular, and for already stretched HR teams, the volume of change can feel overwhelming.

The reforms are being introduced in stages, and you don’t have to navigate them alone. We can help you prioritise what matters, prepare your business and turn the legislation into a practical action plan.

If you would like to discuss the Employment Rights Act reforms or receive straightforward, practical advice on preparing your business, please call us on +44 208 255 1914 or get in touch by email.

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