Employment Rights Act 2025 – what you need to know

Starting from last December, employment rights have been undergoing major changes. Some elements of the new law came into effect immediately, while many others are still on the way.

For employees, these laws mean new rights that empower you to receive fair treatment and a positive working environment.

For employers, the act functions as guardrails to support you in managing staff and developing your business sustainably.

 

So, what does the act actually cover?

From sick pay to trade unions and tipping practice, the Employment Rights Act 2025 includes regulations for a wide range of aspects of the relationship between employers and their employees. Much of the content updates pre-existing legislation, however there are some completely new additions to reflect the modern workplace. The last Employment Rights Act is from 1996, so we were due a change since the dawn of smart technology, a financial crash and a global pandemic!

In the six months since the bill became law, a few changes have already come into play. The rest are being introduced gradually over the coming months and into 2027. By keeping up to date with the changes and what’s coming, you’ll be able to prepare for any new requirements and, for employees, any new rights that you have access to.

The below is a summary of the points that are likely to be most relevant to you. To make sure you understand the full implications of the act so far and all the areas covered, we recommend reading the ACAS guidance.

 

Already in action

These changes have been made since December 2025 and are already in force. As an employer, it’s essential that you are delivering these now. If you are an employee, you have the right to claim these powers as needed.

 

Leave

• Employers must now keep records of annual leave and holiday pay.
• Statutory sick pay no longer has a lower earnings limit and must be paid from the first day of illness.
• New day-one rights around paternity leave and unpaid parental leave have been introduced.

 

Equality

• Sexual harassment is now a ‘qualifying disclosure’ for whistleblowing protections.
• Employers can publish action plans around menopause and gender pay gaps (this will become mandatory for large employers in 2027).
• The Fair Work Agency was established to enforce employment rights.

 

Strikes and trade unions

• There is no longer a minimum service level during strikes. This means that even if services cannot be kept running, employees have the right to strike.
• Employees cannot be dismissed for taking part in strike action.
• The notice period for strike action has been reduced, along with several other rules for how strikes can be carried out.

 

Coming soon

Over the remainder of 2026, a few more sections of the law will become enforceable. All of the below will change in October 2026, but some trade union changes will take effect in August.

 

Tipping

From October 2026, employers will need to consult with workers before creating a tipping policy. The policy will need to be updated every three years.

 

Harassment

• Employers will need to take ‘all reasonable steps’ to prevent sexual harassment. The current law says ‘reasonable steps’.
• Employers will be liable for harassment from customers and other third parties.

 

More strike and trade union changes

• As well as being protected from unfair dismissal, strike participants will also be protected against less favourable treatment by their employer.
• Employers will need to inform workers of their right to join a trade union.

 

There are quite a lot of other updates in this area, so if you are connected to trade unions in any way, it’s a good idea to read up on what will happen.

 

Next year

Lots of changes will be introduced next year. Below are some of the key points that may affect your business or employment. While specific dates have not been set for many of these changes, it has been confirmed that they will be introduced in 2027.

 

Working hours

• Workers will get the right to guaranteed working hours, affecting those on zero- and low-hours contracts.
• Workers will get the right to be paid if a shift is cancelled, cut short or moved to another date by their employer.
• Employers must provide reasonable notice of shifts and shift changes.
• Employers will need to provide further explanation for refusal of flexible working requests.

 

Redundancy and dismissal

• There will be increased protections against dismissal of pregnant workers and those returning from maternity leave.
• For collective redundancy, employers will need to consider the total number across their organisation rather than just an individual workplace.
• From 1 January 2027, protection from unfair dismissal will begin from six months of being in a job, reduced from two years.
• Also from 1 January, dismissing someone and rehiring them on worse terms (also known as ‘fire and rehire’) will become unfair dismissal in most cases.

 

Equality

• It will become mandatory for large organisations to publish a menopause and gender pay gap action plan.
• ‘Reasonable steps’ for preventing sexual harassment will be defined.
• The law will void contract clauses that prevent workers from reporting work-related harassment or discrimination.

 

Make sure you’re prepared

We hope that this summary of some of the key changes to employment rights law has been helpful to get you thinking. To gain a deeper understanding of the updates that affect you specifically, we recommend reading some of the resources below that go into further detail about the Employment Rights Act 2025.

While it might seem like a lot of additional work for employers, these new legal requirements are designed to ensure that your workforce is safe and able to function at the best of their ability. By delivering on these essential upgrades, you will be setting solid foundations for your business to grow.

As an employee, it’s important that you understand your rights so that you can benefit from a safe and supportive workplace. If you aren’t sure how these changes might affect you, talk to your employer about any specifics relating to your situation.

 

Find out more

We recently hosted an exclusive webinar for CIMSPA partners going into detail about all the aspects of the Employment Rights Act 2025 that you need to know about for your business. Catch up by watching the recording, and boost your knowledge by following up with the additional resources below.