14 Jan 2026
Peterborough office
48 Broadway, Peterborough Cambridgeshire, PE1 1YW
01733 346 333 01733 562 338 enquiries@hegarty.co.ukStamford office
10 Ironmonger Street, Stamford Lincolnshire, PE9 1PL
01780 752 066 01780 762 774 enquiries@hegarty.co.ukOakham office
66 South Street, Oakham Rutland, LE15 6BQ
01572 757 565 01572 720 555 enquiries@hegarty.co.ukMarket Deeping office
27a Market Place, Market Deeping, PE6 8EA
01778 230 120 01778 230 129 enquiries@hegarty.co.uk14 Jan 2026
The Employment Rights Act 2025 has now received Royal Assent and represents the most significant overhaul of UK employment law in over a generation. It modernises workplace rights, strengthens worker protections, and introduces wide-ranging reforms that will affect employers and employees alike across all sectors.
Understanding these reforms and preparing in advance is essential for employers of all sizes. This article provides a clear breakdown of what’s changing, when changes will take effect, and what employers should be doing now to stay compliant and ahead of the curve.
The Employment Rights Act 2025 (ERA) modernises employment protections by:
With changes phased across April 2026, October 2026 and 2027, the Act represents a seismic shift in how employment law operates in the UK.
Please see later in this article for details of the key dates for changes to come into force.
1. Unfair Dismissal Rights and Compensation
Under the new Act, employees will gain protection from unfair dismissal after six months’ service instead of the current two-year qualifying period. The Act also removes the cap on compensation, potentially allowing for higher awards in Tribunal where unfair dismissal is proven.
This change strengthens employee rights significantly and means many dismissals that were previously outside the scope of claim may now be actionable.
Employers should review probationary practices, performance management procedures and dismissal policies. Training managers on lawful dismissal processes and documentation will reduce risk.
2. Restrictions on “Fire and Rehire”
The Act significantly limits the controversial practice of “fire and rehire” by limiting an employer’s ability to dismiss and re-engage staff to change terms and conditions.
It will become an automatic unfair dismissal if an employer fires and then rehires an employee on new terms, unless there is agreement from the employee to vary the contract. This effectively puts an end to the fire and rehire arrangements and expands on legislation introduced in recent years.
Place of work or routine and non-detrimental changes to contracts would not be classed as automatically unfair, however an employee could still consider unfair dismissal proceedings in that regard.
Additionally, dismissing an employee and replacing them with someone who is not an employee, such as agency staff, could also be considered automatically unfair for a dismissal claim. There is some availability within the Act to justify such steps depending on the reasoning however.
3. Stronger Family-Friendly Rights
The Act introduces expanded family leave entitlements, including enhanced rights for parental, paternity, (to be day one rights) and carers’ leave. It also provides new protections for pregnancy and maternity returners, and a statutory right to bereavement leave following the loss of a child.
These updates reflect a modern understanding of family and workplace needs, helping employers support employees through significant life events.
4. Statutory Sick Pay and Fair Work Enforcement
The Act expands entitlement to Statutory Sick Pay (SSP) by:
Additionally, a new enforcement body, the Fair Works Agency, will be established to oversee compliance with employment rights and fair work standards. The Agency will have powers to investigate and enforce entitlements such as statutory sick pay, holiday pay, minimum wage, and other statutory rights.
This adds a new dimension to regulatory oversight and means employers must be ready to demonstrate compliance proactively.
5. Flexible Working
Employees will now have the right to request flexible working from their first day of employment. Employers must be able to justify refusals on reasonable grounds, making flexible working a more robust and widely accessible right.
This highlights a meaningful shift towards greater work-life balance and requires employers to review existing flexible-working processes and policies.
6. Harassment Prevention and Workplace Culture
From October 2026, employers will have a legal duty to take “all reasonable steps” to prevent workplace harassment, including harassment by third parties such as clients or contractors. This covers all protected characteristics.
Employers need proactive training, clear policies, and reporting pathways to comply with heightened obligations.
This aligns with broader modernisation of equality law and reinforces employers’ obligations to maintain a safe and inclusive workplace.
7. Zero-Hours and Insecure Working Rights
Workers on zero-hours or variable contracts will receive stronger rights to predictable hours and protection from exploitative practices. The Act strengthens rights for these workers by:
These reforms aim to strike a fair balance between flexibility and security in insecure work. The government has also indicated plans to extend protections to agency workers.
These protections will be shaped by upcoming regulations and consultations in 2026–27.
8. Collective Redundancy and Tribunal Time Limits
The Act updates collective redundancy thresholds and consultation rules:
Employers planning workforce changes should seek legal advice early to mitigate risk.
Most reforms will be introduced gradually between 2026 and 2027. Secondary legislation and statutory instruments will provide detail on the exact effective dates for key measures.
April 2026
October 2026
2027 and Beyond
This phased delivery gives employers space to plan, so taking proactive steps now will help organisations manage risk and ensure compliance as the new law takes effect.
Review policies now: Consider updating contracts, employee handbooks and internal processes well before new rights take effect.
Train HR and line managers: Understanding the nuances of dismissal rights, family leave, flexible working, and harassment prevention is essential.
Audit workforce contracts: Especially those on zero-hours, flexible hours, or within probation periods.
Stay ahead of consultation outcomes: Many reforms depend on secondary legislation so continuing updates from legal counsel are vital.
The Employment Rights Act 2025 is a landmark reform and represents a modernisation of UK employment law, impacting almost every aspect of the workplace.
Both employers and employees stand to be affected by broader protections, more employee rights, and greater regulatory oversight.
Employers should embrace proactive planning, comprehensive policy updates, and ongoing education to ensure compliance and minimise risk.
If you need support understanding how these changes will affect your organisation or workforce, Hegarty is here to help, offering guidance on implementation, policy drafting, and strategic employment law advice.
Whatever legal support you need, our experienced and highly skilled solicitors and legal advisors are here to help. With expertise across a wide range of legal areas, we provide clear, practical advice tailored to you. What sets us apart is our commitment to understanding your needs and delivering the best possible outcome with a personal touch.
