Employment Rights Act update: What business owners need to know

The Employment Rights Act 2025 received Royal Assent in December 2025, but the changes it will impose are going to be rolled out in stages throughout 2026 and 2027.

What the Act does at a glance

In broad terms, the Act strengthens day‑one employment protections, reforms work practices, expands family‑related entitlements and codifies a more preventive approach to workplace standards. The details of several measures are still subject to consultation and will be set out in regulations, but for now, here are the key features for owner‑managed businesses.

What’s already happening in early 2026

• February 2026: Industrial action reforms take effect (e.g., 12‑month ballot mandate and 10‑day notice).
• April 2026: Day‑one Statutory Sick Pay (no lower earnings limit) and day‑one paternity leave and unpaid parental leave; the Fair Work Agency launches; maximum protective award for collective redundancy breaches doubles to 180 days’ pay.

What’s coming later in 2026

• October 2026: Tribunal time limits are extended to six months; a strengthened duty to take “all reasonable steps” to prevent sexual harassment will be introduced (including third‑party harassment); tighter rules on “fire and rehire”; enhanced trade union access rights.

Looking ahead to 2027

• The qualifying period to claim unfair dismissal reduces to six months and the compensation cap is removed (currently slated for 1 January 2027).
• Further zero‑hours measures and family‑friendly and flexible working refinements are expected during 2027.

Why it matters now

Although commencement is staggered, the implications of the Act are immediate. The risk associated with early‑service dismissals will change, meaning that fair reason, fair process and robust probation management will become critical from the outset of employment. Family‑friendly and health‑related entitlements will be broadened, requiring prompt updates to contracts, policies, payroll and manager training. Much of the new regime will be underpinned by regulations and guidance yet to be published, so employers need to monitor commencement orders and official guidance as they are published.

We will be holding webinars and in‑house training sessions on the Act including its phased implementation throughout 2026. Please email our Employment team to enquire today at employmenttraining@lawblacks.com.