Employment law updates

The Employment Rights Act 2025: what it means for your business

The Employment Rights Act 2025 is the biggest change to UK employment law in a generation. It became law in December 2025, and its changes are being introduced in stages through to 2027. Here's what small employers need to know.

Already in force

•    April 2026: Statutory Sick Pay is paid from the first day of sickness, and the lower earnings limit has been removed.
•    April 2026: Paternity leave and unpaid parental leave became day-one rights.
•    April 2026: Employers must keep records of holiday and holiday pay for six years.

From October 2026

•    A stronger duty to take “all reasonable steps” to prevent sexual harassment, including harassment by clients and customers.
•    The time limit for most employment tribunal claims increases from three months to six months.

From January 2027

•    Employees can claim unfair dismissal after six months' service, down from two years. This will apply to anyone who has six months' service on 1 January 2027.
•    Tighter restrictions on “fire and rehire”.

Later in 2027

•    Changes to flexible working, guaranteed hours for zero and low-hours workers, enhanced protection for pregnant workers and new mothers, and bereavement leave.

What you should do now

1.   Review your probation process, because it will become your main opportunity to address concerns before unfair dismissal rights apply.
2.   Update your contracts, handbook and sickness policy.
3.   Check your harassment policy and manager training.
4.   Make sure managers keep clear records of performance and conduct conversations.

Not sure where to start?

Book a free 30-minute call and we'll review where your business stands, or call us on 07704 515167.

Dates follow the government's published implementation timetable and may change. Last reviewed October 2026.