Legal update – Employment Rights Act 2025

29 Mar

The Employment Rights Act 2025 became law on 18 December 2025. The law made a number of changes to the existing employment law in England. These changes will be implemented over a period of two years.

We summarise below some of the most significant changes that will impact employers in the UK.

On 6 April 2026, the following changes will come into force:

Paternity leave and unpaid parental leave

• Statutory Paternity Leave will become a ‘day one right’, meaning that an eligible employee may give notice of leave from their first day of employment (though the qualifying period for paternity pay remains). Currently the right to paternity leave only begins when an employee has been working for their employer for at least 26 weeks.
• Statutory Unpaid Parental Leave – where a parent takes time off to care for a child, will also become a day one right. Currently, an employee must have worked for their employer for at least 1 year in order to be eligible.
• The restriction on taking paternity leave after shared parental leave will be removed. Currently, an employee cannot take paternity leave after taking shared parental leave.

Sick pay

• Statutory Sick Pay (SSP) will be paid from the first day of sickness leave, rather than from the fourth day.
• The lower earnings limit will be removed so all employees will be entitled to SSP. Currently, workers must earn a minimum amount to be eligible for SSP.

The following changes are scheduled to be implemented by October 2026. The details of how these are to be implemented are currently still subject to government consultations.

Harassment

• Employers will become liable for harassment from third parties, for example customers or clients, unless they have taken all reasonable steps to prevent it happening – this will apply to all types of harassment.
• Employers will need to take ‘all reasonable steps’ to prevent sexual harassment – the current law only says ‘reasonable steps’.

A change to the law around non-disclosure agreements (NDAs) is also expected. This will void clauses that would prevent workers from alleging or disclosing work-related harassment or discrimination. The date of this change is not known yet.

Employment claims

The time limit to bring an employment claim will increase from three months to six months.

Changes due to come into force in January 2027:

• ‘Fire and rehire’ – dismissing someone then rehiring them on worse terms and conditions will become an automatically unfair dismissal in most cases. This is sometimes known as ‘fire and rehire’. This will come into force on 1 January 2027.
• Unfair dismissal – unfair dismissal will become a right after 6 months of employment, not the 2 years it has been until now.  The current cap on compensatory rewards will be removed.
• Zero hours workers – workers on Zero hours contract will receive the right to guaranteed working hours, if they want them. Employees will have the right to be paid if a shift is cancelled, moved to another date, or cut short by an employer. Companies will also have to provide reasonable notice of shifts and changes to shifts.
• Family protections – new protections will be put in place against dismissal for pregnant women, those on maternity leave, and for 6 months after they return to work.
• Flexible working requests – companies will only be able to reject a flexible working request from an employee if they provide a genuine business reason (from a list of 8 acceptable reasons) and explain why they believe the refusal is reasonable.
• Bereavement – there will be a new statutory right to bereavement law, however it is still unknown whether this will be paid or unpaid. This includes bereavement leave for pregnancy loss.

What should companies do to prepare for the above changes

The above changes are significant. The impact will vary for different employers and we encourage clients to take advice in relation to their particular situation. General actions to consider include:  

• Review of current staff and terms and potentially making changes before the new rights in relation to unfair dismissal and fire and rehire come into force
• Preparing for the enhanced harassment duties by reviewing policies and procedures to prevent harassment
• Update policies in relation to sick leave and pay, other statutory leave and flexible working requests
• Preparing processes in relation to zero or low hour workers
• Update template employment contracts

For more information contact Hadie Cohen, head of our employment team at Hadie.Cohen@asserson.co.uk.