Employment Rights Act 2025: What UK Employers Need to Do Right Now

The Employment Rights Act 2025 became law on 18 December 2025 and is being introduced in stages through 2026 and 2027. It affects every UK employer. The most pressing changes day-one statutory sick pay, tighter rules on zero-hours contracts, restrictions on “fire and rehire” and a shorter unfair dismissal qualifying period mean your contracts, policies and handbooks need reviewing now, not when each date arrives.

The Employment Rights Act 2025 is the biggest package of employment law changes UK employers have faced in a generation. At Harwood HR Solutions, we are already helping clients prepare, and we give them the same message: businesses that act early will absorb these reforms calmly, while those that wait will scramble. This guide explains what the Act does, what has changed, and the practical steps to take now.

What is the Employment Rights Act 2025 and when does it apply?

The Employment Rights Act 2025 began life as the Employment Rights Bill, published in October 2024, and received Royal Assent on 18 December 2025. It forms the centrepiece of the government’s “Plan to Make Work Pay”. The Act amends existing employment law, chiefly the Employment Rights Act 1996, rather than replacing it.

Crucially, almost nothing changed on the day of Royal Assent. The reforms are being switched on in phases, with much of the fine detail still to be confirmed through secondary legislation and consultation. The government published a roadmap in July 2025 and has since issued revised timetables, most recently on 16 July 2026.

Every employer is affected, regardless of size or sector. Many of the new rights apply from day one of employment, so this is not a concern only for large organisations; small businesses carry the same obligations. Because dates are still moving, we recommend treating the timeline as a live document and checking the current position before acting.

The headline dates as they currently stand:

• 6 April 2026: statutory sick pay (SSP) becomes a day-one right, and the lower earnings limit is removed; day-one paternity and unpaid parental leave begin.
• 1 October 2026: employment tribunal time limits extend from three to six months.
• 30 October 2026: strengthened duties to prevent sexual harassment take effect.
• 1 January 2027: the unfair dismissal qualifying period drops to six months, the cap on the compensatory award is removed, and “fire and rehire” restrictions begin.
• During 2027: guaranteed-hours rights for zero and low-hours workers, and revised flexible working rules.

Unfair dismissal: what happened to “day-one” rights, and what to do now

You may have read that the Act would introduce day-one unfair dismissal rights in 2025. That proposal was dropped shortly before Royal Assent. Instead, the qualifying period for ordinary unfair dismissal falls from two years to six months, expected to apply to dismissals from 1 January 2027. The Act also removed a statutory probation period, originally proposed.

This still represents a major shift. Today an employee generally needs two years’ service to claim ordinary unfair dismissal; from 2027 that protection arrives four times sooner. The Act also removes the cap on the compensatory award, sharply increasing financial exposure when a claim succeeds.

The practical consequences for employers are clear:

• Recruit and probation carefully: With protection arriving at six months rather than two years, getting the right person into the role and assessing them properly during probation matters far more.
• Strengthen probationary clauses: Contracts should set clear objectives, review points and expectations during the probationary period.
• Follow a fair process every time: Rushed or poorly documented dismissals will be far riskier once the qualifying period shortens.
• Document performance: Keep evidence of concerns raised, support offered and reviews held, so that any dismissal is defensible.

A robust, well-run procedure is your best protection. If yours needs tightening, our guidance on running a fair disciplinary process for UK employers covers the steps a tribunal expects to see.

Flexible working day-one rights in the UK: How to update your policy

The right to request flexible working has been a day-one right since April 2024, so employees can ask from their first day. The Employment Rights Act 2025 builds on this rather than creating the right from scratch a distinction worth getting right in your policy.

Under the Act, expected in 2027, handling a request becomes more demanding. If you refuse, you will need to rely on one of the eight recognised business reasons and explain why your refusal is reasonable. Simply citing a permitted reason will no longer be enough.

What existing flexible working policies typically need:

• Confirmation that requests can be made from day one, covering any working pattern or change to working hours.
• A clear, documented handling process with defined timescales.
• A requirement to give a genuine, evidenced business reason for any refusal, and to explain why that refusal is reasonable.
• A consistent, fair approach that avoids any risk of discrimination under the Equality Act 2010.

Getting this into writing now means you are ready before the stricter rules bite. We can review or rewrite yours as part of our company policies service, so your flexible working policy is clear and compliant.

Zero-hours contract reform 2025. What’s still legal and what’s not

Zero-hours contracts are not banned. However, the Act introduces significant new obligations designed to end “one-sided flexibility”, and these are among the most complex reforms. The core changes are expected in 2027.

The central new duty is the guaranteed-hours offer. Where a zero- or low-hours worker regularly works a certain pattern over a reference period (the government’s stated preference is 12 weeks), you must proactively offer them a contract reflecting those hours. This is an employer duty to make the offer; the worker can decline and stay on their current arrangement if they prefer.

Alongside this, qualifying hours workers will gain:

• A right to reasonable notice of shifts.
• A right to payment where a shift is cancelled, moved or cut short at short notice.
• Protection from detriment for exercising these rights.

Importantly, these protections now cover agency worker arrangements, closing an obvious loophole. Zero-hours contracts remain lawful for genuinely variable demand, but if you rely on them, you should audit them now: identify who works regular hours in practice, and be ready to make guaranteed-hours offers.

Our team can review your arrangements through our employment contracts service and provide tailored zero-hours contract advice so you stay on the right side of the reforms.

Fire and rehire ban in the UK 2025: what the new restrictions mean

“Fire and rehire”  dismissing an employee and re-engaging them on less favourable terms to force through a contract change faces tough new restrictions. These are expected from 1 January 2027, having been pushed back from October 2026 while the government consults on the detail.

The Act does not ban all contract variations. Instead, it targets what it calls “restricted variations” such as cutting pay or pension benefits. If you dismiss an employee because they refuse a restricted variation, that dismissal will normally be automatically unfair. In practice, this removes dismissal-and-rehire as a route to imposing detrimental changes.

So what should you do when you genuinely need to change terms? The lawful route is agreement, reached through a proper process:

1. Consult early and openly about what you need to change and why.
2. Explain the business rationale and listen to alternatives.
3. Seek genuine agreement, confirmed in writing with an updated statement of terms.
4. Seek advice before acting if you cannot reach agreement.

Managing contract change well is exactly the kind of situation where expert support pays for itself. Our HR support services for UK employers give you an experienced adviser to guide any consultation and keep it defensible.

Your ERA 2025 action checklist. What to do in the next 30 days

You do not need to solve everything at once, but you should start now. Here is the practical order of work we recommend to clients:

1. Review your employment contracts. Check probationary clauses, notice terms and any zero-hours arrangements against the incoming rules. Start with our employment contracts review.
2. Update your flexible working policy to reflect the day-one right to request and the stricter refusal process. See our company policies service to update your policies for the ERA 2025.
3. Audit your zero-hours and low-hours staff. Identify who works regular hours and model where guaranteed-hours offers may be due.
4. Tighten your disciplinary and performance procedures ahead of the shorter unfair dismissal qualifying period.
5. Refresh your staff handbook. Sick pay, family leave and harassment sections all need attention; our staff handbook review brings it up to date in one pass.
6. Update sick pay processes for day-one SSP from April 2026, including for lower-paid staff previously below the earnings limit.
7. Brief your managers so they understand the new landscape and apply it consistently.

If that feels like too much to manage in-house, that is exactly what we do. Our outsourced HR support gives you an expert team to work through the whole list with you.

What are the key ERA 2025 takeaways for employers?

• The Employment Rights Act 2025 is law and phasing in through 2026–2027; every employer is affected.
• Day-one unfair dismissal was not introduced; the qualifying period instead drops to six months from January 2027, and the compensatory award cap is removed.
• Flexible working has been a day-one right to request since April 2024; from 2027, employers must show refusals were reasonable.
• Zero-hours contracts remain legal, but a guaranteed-hours offer duty (based on a likely 12-week reference period), and shift protections arrive in 2027, extending to agency workers.
• “Fire and rehire” for restricted variations becomes automatically unfair from January 2027; use consultation and agreement instead.
• Statutory sick pay (SSP) becomes a day-one right from 6 April 2026, with the lower earnings limit removed.
• Priorities now: contracts, flexible working policy, zero-hours audit, disciplinary procedure and staff handbook.

The Employment Rights Act 2025 is being implemented in stages, and several dates and details remain subject to consultation and secondary legislation, with further government updates possible. Always confirm the current position before acting.

Get expert ERA 2025 support from Harwood HR Solutions

Building a strong, compliant and people‑focused workplace starts with the right HR expertise on your side, and that’s exactly what we deliver at Harwood HR Solutions. From tailored consultancy and HR support to bespoke training and policy development, our experienced team helps businesses of all sizes navigate complex people‑related challenges with confidence. Ready to strengthen your HR strategy and support your employees more effectively? Contact Harwood HR Solutions Ltd, Hawthorne Lodge, Sutton Lodge Farm, Frolesworth Road, Broughton Astley, Leicester, LE9 6PG and call us on 020 3936 9171 to explore our full range of services and start transforming your workplace today.