UK Employment Rights Act 2025: What Employers Need to Know in 2026

The Employment Rights Act 2025, which received Royal Assent in December 2025, introduces a wave of changes aimed at strengthening worker protections, increasing transparency, and modernising employment law in the UK. Many of the reforms are being phased in throughout 2026 and 2027, giving employers time to prepare.

Stronger Worker Protections and Day-One Rights

Key protections for employees are being expanded:

• Family Leave: Parental and paternity leave are now day-one rights from April 2026, with protections for employees returning from family leave.

• Flexible Working: Employees already have the right to request flexible hours from day one, and the Act adds requirements for employers to clearly explain any refusals.

• Zero-Hours Contracts: Workers whose hours regularly exceed their contracted schedule must be offered guaranteed-hours contracts, though they can choose to remain on zero-hours terms. Employers also must give reasonable notice of shift changes and compensation for cancelled shifts.

Unfair Dismissal and Fire-and-Rehire

While day-one unfair dismissal rights were proposed during consultation, the final Act retains a qualifying period, which will be reduced from two years to six months starting January 2027.

The law also makes dismissals for refusing contractual changes automatically unfair unless the employer can demonstrate genuine financial necessity. Employment tribunals will assess whether consultation was sufficient.

Trade Unions and Industrial Action

The Act strengthens trade union rights, lowers thresholds for statutory recognition, and requires employers to inform new employees of their right to join a union. Changes to strike ballot rules and industrial action protections are already in effect or being phased in during early 2026.

Equality, Harassment, and Workplace Standards

Employers will see increased obligations in several areas:

• Equality Action Plans: Large employers (250+ staff) must prepare plans addressing gender pay gaps and menopause support, with implementation starting in 2026.

• Sexual Harassment: Duty to take “all reasonable steps” to prevent harassment, including risk assessments, policies, complaint procedures, and whistleblower protections, will come into force later in 2026.

• Pay Gap Reporting: The Equality (Race and Disability) Bill introduces mandatory reporting and equal pay rights for ethnic minorities and disabled workers.

Emerging Issues: AI, Surveillance, and ‘Right to Disconnect’

The Act also signals upcoming regulation in areas such as workplace surveillance, AI technologies, and employees’ right to disconnect outside contracted hours. Consultations are ongoing, and secondary legislation will define the specifics.

What Employers Should Do Now

Even with phased implementation, businesses are advised to:

• Review policies on probation periods, flexible working, family leave, and harassment prevention.

• Begin preparations for equality action plans, pay gap reporting, and zero-hours contract changes.

• Train managers and HR teams on trade union rights, consultation obligations, and new dismissal rules.

The UK’s employment landscape is shifting toward stronger protections, greater transparency, and clearer day-one rights. Employers who act now will be ready to meet the requirements as they come into force over the next 12–18 months.