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Employment Rights Act 2025: everything you need to know
The most significant overhaul of UK employment law in a generation. Use this hub to understand what's changing, when it takes effect, and how PeopleHR can help your business stay compliant.
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Figures are estimates based on publicly available statutory rates, ACAS tribunal data (2023/24), and illustrative assumptions about workforce composition and incident rates. They are intended to indicate scale of risk, not predict actual liability. This tool does not constitute legal or financial advice.
In force now: April 2026
The first wave has landed
SSP from day one. Paternity leave from day one. Redundancy consultation failures now carry double the penalty. The Fair Work Agency is open for business.
- SSP from day one: No waiting period for statutory sick pay
- Paternity leave from day one: The 26-week qualifying threshold is gone
- Redundancy failures: Protective awards now up to 180 days' pay per employee
- Fair Work Agency: Can investigate underpayment without an individual complaint
If you haven't updated your policies and payroll yet, you're already behind.
Coming next: October 2026
Fire and rehire becomes almost impossible
Dismissing staff who refuse contract changes becomes automatically unfair. Zero-hours workers gain guaranteed-hours rights. Tribunal time limits double to six months.
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Fire and rehire: Genuine consultation is now the only route to changing contracts
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Zero-hours workers: Can request a contract reflecting their regular pattern after 12 weeks
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Tribunal time limits: Three months extends to six across all claim types
On the horizon: January 2027 onwards
Unfair dismissal gets a complete reset
The two-year qualifying period drops to six months. The compensation cap disappears. Anyone hired from mid-2026 could have full unfair dismissal rights by January 2027.
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Six-month qualifying period: New starters gain dismissal rights far sooner
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No compensatory cap: Awards previously capped at £115,115 will have no ceiling
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Probation processes: Need to be watertight well before this lands
If you're hiring now, get your probation processes ready before January.
8 things you need to know
Not every change carries the same risk. These are the ones that will have a direct impact on how you manage people and pay.
Day-one family leave
No qualifying period. A new starter on their first day can now request paternity or unpaid parental leave, and you can't refuse on grounds of short service.
SSP from day one
The three-day wait is gone. The lower earnings limit is gone. Every worker qualifies from their first day off sick. Your payroll system needs to reflect this now.
Redundancy penalties
Get collective consultation wrong and the maximum tribunal award is now 180 days' pay per employee. That's twice what it was before April 2026.
The Fair Work Agency
One enforcement body. Proactive inspections. No waiting for a worker to file a claim. If your records aren't audit-ready, the risk is no longer theoretical.
Zero-hours
Workers will gain the right to a contract reflecting their regular hours. If your staffing model relies on zero-hours flexibility, you need to be planning for this now.
Fire and rehire
Forcing through contract changes by dismissal becomes automatically unfair. The only defence is genuine financial crisis, and the bar is high.
Unfair dismissal
From January 2027, employees need just six months' service to claim. Anyone hired from around July 2026 could have full protection on day one of the new year.
Flexible working
Ticking a box isn't enough anymore. If you refuse a flexible working request, you have to explain in writing why the refusal is actually reasonable.
Stay compliant with PeopleHR's Employment Rights Act module
A 22-course learning programme built specifically for the Employment Rights Act 2025. Give your managers documented, date-stamped proof of training. Update automatically as legislation changes.
HR Strategy and Trends Webinar
The Employment Rights Act is one of the biggest pressures facing HR teams this year - but it's not the only one. Our on-demand webinar covers the trends and challenges shaping HR strategy in 2026, including what the ERA changes mean for your people processes.
Guides, blogs, and tools to help you prepare
Employment Rights Act UK: key changes every SME should know
A comprehensive guide to zero-hours contracts
10 HR policies and procedures your small business needs
What is HR compliance? Introduction and checklist
Employers' guide to Working Time Regulations UK
Can I re-employ someone I made redundant?
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