UK employment law is undergoing its most significant transformation in a generation following the Royal Assent of the Employment Rights Act 2025.
This landmark legislation, a cornerstone of the government’s “Plan to Make Work Pay,” aims to modernise workplace rights, tackle insecure work, and boost wages.
For both employers and employees, understanding these changes is crucial for navigating the evolving professional environment.
Here’s a summary of the key shifts introduced by the Act:
For Employees: Strengthened Protections and Security
The Act delivers a significant boost to worker security and fairness:
- Earlier Unfair Dismissal Protection: A headline change is the reduction of the qualifying period for standard unfair dismissal claims from two years to six months, effective from 1 January 2027. This provides millions more workers with essential job security much earlier in their employment.
- Ending Exploitative Contracts: The Act tackles “one-sided flexibility” by introducing rights to guaranteed hours that reflect regular working patterns, reasonable notice of shifts, and compensation for short-notice shift cancellations, benefiting zero-hours and agency workers.
- Day-One Rights: Vital protections become available from the very first day of a job, including Statutory Sick Pay (with the lower earnings limit and waiting period removed) and unpaid parental and paternity leave.
- Enhanced Family and Bereavement Support: Protections for pregnant workers and new mothers returning to work are strengthened. Additionally, a new right to statutory bereavement leave (including for pregnancy loss) is introduced.
- Proactive Harassment Prevention: Employers now face a stronger duty to take “all reasonable steps” to prevent sexual harassment, including protection from harassment by third parties like clients or suppliers.
For Employers: New Compliances and Operational Shifts
While providing workers with more security, the Act necessitates significant procedural updates and potential cost adjustments for businesses:
- Revamped Probation and Dismissal: With unfair dismissal protection starting at six months, employers must refine their recruitment, probationary, and performance management processes. Robust, fair dismissal procedures from an early stage are now critical to avoid claims.
- Managing Predictable Hours: Businesses relying on flexible staffing models, such as zero-hours contracts, need to implement systems to track hours, offer guaranteed contracts, and manage shift scheduling in compliance with the new rules on notice and cancellation pay.
- Increased SSP Costs: The removal of the waiting period and earnings threshold for Statutory Sick Pay may increase payroll costs, especially for smaller businesses or those with lower-paid workforces.
- Strengthened Collective Redundancy Obligations: The stakes for large-scale redundancies are higher. The protective award for failing to collectively consult effectively can now double to up to 180 days’ pay. Consultation thresholds are also tightened.
- The Fair Work Agency: Compliance will be overseen by a powerful new enforcement body, the Fair Work Agency, simplifying the process for workers to seek help and creating a more level playing field for compliant businesses.
Looking Ahead
The changes from the Employment Rights Act 2025 are being phased in, with many key reforms taking effect on 1st April 2026 and 1st January 2027.
This phased approach gives both employers and employees time to adapt.
For businesses, this means proactively reviewing policies, training managers, and updating employment contracts.
For workers, it’s about understanding these powerful new rights to ensure a fairer and more secure working future.
Helping Employers and Employees Navigate Changes
At Rollos, we have been advising employers and employees on changes to employment law for generations.
Our experienced team of employment lawyers are already well versed in the changes that the Employment Rights Act 2025 brings.
So whether you are an employer wanting to make sure you are compliant with new regulations, or an employee seeking representation and/or clarification of your rights, Rollos are here to help.
Contact Rollos to discuss the latest changes to employment law.