UK employers are entering one of the most transformative periods for employment law in decades. Legislative reform has been gathering pace for several years, but the Employment Rights Act, formerly the Employment Rights Bill, marks a decisive shift. Passed in December 2025, the Act begins a phased rollout across 2026 and 2027, touching almost every aspect of the employer/employee relationship.
HR teams, business leaders and managers alike will need to understand not only what is changing, but also when, and how these reforms may reshape workforce strategy, policies and processes. Below, we take a closer look at the key changes you should look out for.
April 2026:
Statutory Sick Pay changes
From April 2026, Statutory Sick Pay becomes payable from the very first day of sickness absence, removing the previous waiting period. The lower earnings limit is also abolished, meaning many more workers will now qualify for SSP. The weekly rate increases to £123.25, so employers will need to ensure payroll systems, absence procedures and employee communications are fully updated.
Family‑friendly rights expand
Family‑related entitlements become more accessible in April. Both paternity leave and unpaid parental leave move to day‑one rights, meaning employees no longer need to meet lengthy service requirements before making a request. Statutory family pay rises to £194.32 per week, with the qualifying earnings threshold increasing to £129. Organisations should ensure their family‑leave policies, onboarding information and manager training reflect these new early entitlements.
National living wage & youth rates increase
The National Living Wage for workers aged 21 and over rises to £12.71 per hour, with above‑inflation increases for younger age groups. These changes will have cost implications across many industries, so employers should incorporate the new rates into payroll planning, budgeting and workforce forecasting to avoid compliance issues.
Collective redundancies: higher penalties for non‑compliance
Employers failing to properly consult during a collective redundancy process will face significantly harsher consequences from April. The maximum protective award available to employees doubles from 90 to 180 days' pay. This makes it more important than ever for employers to maintain robust consultation procedures and ensure documentation is accurate and comprehensive.
Strengthened whistleblowing & harassment protections
Whistleblowing legislation is expanded to explicitly protect disclosures relating to sexual harassment. At the same time, employers face broader duties to actively prevent harassment in the workplace. This reform is a timely reminder to review and refresh anti‑harassment policies, training programmes, reporting mechanisms and wider culture‑building initiatives.
Launch of the Fair Work Agency
A new Fair Work Agency will begin operating in April as a single enforcement body overseeing areas such as the National Minimum Wage, holiday pay compliance, worker protections and certain tribunal claims. With a more coordinated enforcement approach, employers should be prepared for increased scrutiny, more inspections and a stronger focus on compliance standards across the board.
October 2026:
Strengthened duties regarding sexual harassment
From October 2026, the duty on employers to prevent sexual harassment in the workplace will be strengthened further so that employers must take ALL reasonable steps to prevent sexual harassment in the workplace. During the course of 2027 we can expect to see regulations which help define the steps that employers are expected to take to ensure that they are complying with the legislation.
Tribunal time limits extended
Many employment tribunal claim deadlines are expected to increase from three months to six. This change will affect how employers manage disputes, preserve evidence and handle internal processes. With claims potentially brought long after an issue arises, employers will need strong record‑keeping and clearer case management procedures to maintain compliance and minimise risk.
2027
In 2027, additional elements of the Employment Rights Act 2025 are expected to come into force as the government completes consultations and issues the necessary secondary regulations. These later‑phase reforms are anticipated to include new rules on the general prohibiting of fire and rehire, changes to flexible working so that employers will need to justify the reasons for any rejections further, guaranteed hours rights for employees and shift notice requirements.
However, the most significant changes from next January will be the qualification right for all employees to be able to bring a claim for unfair dismissal from 6 months, opening up rights to many more employees. Employers are advised to carefully review their probationary period policies and make decisions before the six-month period elapses to avoid increased exposure and risk for unfair dismissal claims.