A New ERA: Key Considerations for Employers Following the Employment Rights Act 2025 Receiving Royal Assent

On 18 December 2025, the UK Parliament passed the Employment Rights Act 2025 (ERA 2025), the most significant overhaul of employment law in the UK in over a generation. The Act consolidates and reforms core statutory rights, introducing broad protections for workers and new duties for employers. Although many changes will be phased in over 2026–27, the Act’s ambitious scope means employers must plan strategically for compliance.

1. Strategic Workforce Planning and Implementation Timetables

One defining feature of the ERA 2025 is its phased implementation, with key measures coming into force from 2026–27 following extended secondary legislation and government consultation processes. The ERA 2025 implementation is therefore an ongoing strategic project for employers and HR teams, which will require resource planning and prioritisation. We have set out an implementation timeline below.

The key reforms of the ERA 2025 have been well publicised, however a number of key reforms have evolved during the parliamentary process from the original proposals published in October 2024.

Now that the settled position of the reforms are known, here are some of the key areas employers need to plan for:

Changes to Unfair Dismissal Entitlement

The ERA 2025 reduces the qualifying period for unfair dismissal claims from two years to six months for dismissals from 1 January 2027.

Employers will need to review contractual probationary periods and practices to ensure that poor performing employees are proactively managed and that conduct issues are addressed within the first 6 months. Managers should be made aware of the changes and trained on the early-stage dismissal risks and liabilities and the importance of proactively managing new joiners where necessary.

From January 2027 the current statutory cap for unfair dismissal compensation (currently as at 6 April 2026 – 52 weeks’ pay or £123,543 whichever is lower) will be removed. This could significantly increase the financial liability resulting from an unfair dismissal claim for employers.

Harassment, Third-Party Liability and Workplace Culture

The ERA 2025 expands employer liability for harassment by third parties (e.g. contractors and service users) unless “all reasonable steps” to prevent it can be demonstrated. This expansion will take effect in October 2026.

Employers currently have a duty to take “reasonable steps” to prevent sexual harassment of their employees.  In October 2026, the ERA extends this duty on employers to taking “all reasonable steps”.

Employers will need to re-evaluate sexual harassment risk assessments which have been undertaken to ensure that they account for the risks from third parties (if this has not already been covered) and are robust. Policies, reporting channels, and training should be reviewed.

Statutory regulations specifying the steps to be regarded as “reasonable” to determine whether an employer has taken “all reasonable steps” will take effect in 2027 following consultation. Employers will need to review their risk assessments, policies and training again following the introduction of these.

Zero-Hours and minimum-hours workers

Although not abolishing zero-hours contracts outright, the ERA will introduce in 2027 a right for qualifying workers to receive guaranteed hours offers reflecting regular work patterns and notice/compensation for cancelled shifts. Employers that use casual or flexible contracts will need to audit contracts and workforce practices. Payroll and scheduling systems may require redesign to manage guaranteed-hours obligations.

Family-Friendly Rights

On 6 April 2026, paternity and unpaid parental leave become day 1 rights, significantly expanding entitlements. If this provision is not already made by employers, policies and internal guidance will need to be amended to reflect this entitlement and managers and staff made aware.

Employees that are newly eligible for day 1 paternity leave and unpaid parental leave can give notice.

Industrial Relations and Trade Union Duties

The ERA 2025 reforms multiple aspects of trade union law. This will include, from October 2026, the requirement to inform workers of their right to join a union and expanded union access rights and check off provisions. Employers will need to update employment contracts and staff communication materials to meet notification duties. HR teams will also likely need to engage with recognised trade unions to discuss the changes and their impact on a practical level.

Employment Tribunals

Time limits for bringing claims will change from 3 months to 6 months. This change will take effect no earlier than October 2026. Periods for early ACAS conciliation were also increased from 1 December 2025 from 6 weeks to 12 weeks. The result of these changes, coupled with the pressures currently on employment tribunals when processing claims means that an employer may not be aware for more than 9 months that they will be subject to a claim by an employee or former employee.

Employers will need to revise their retention records for information to ensure that these extended periods are covered. In contentious cases where the risk of a claim has been identified HR should work to ensure evidence is preserved and witness evidence documented (particularly if a relevant individual is leaving the organisation).

The Royal Assent of the Employment Rights Act 2025 marks a transformative shift in UK employment law. For all employers the ERA 2025’s provisions will require significant operational adjustments across HR, legal and policy. Effective planning and proactive training will help to raise awareness and mitigate legal risk to an organisation.

Implementation Timeline – Employment Rights Act 2025 (UK)

This is the current timetable but be aware that the timings are being kept under review as the government goes through its consultation process.

18 December 2025 – Royal Assent

The Employment Rights Bill became the Employment Rights Act 2025, formally on the statute book.

Immediate effects include:

• Repeal of the Strikes (Minimum Service Levels) Act 2023.

18 February 2026 – Measures that have taken effect

• The repeal of the great majority of the Trade Union Act 2016, thereby simplifying requirements on trade unions, including in relation to industrial action and political funds
• Removing the 10-year ballot requirement for trade union political funds
• Simplifying industrial action notices and industrial action ballot notices
• Protections against dismissal for taking industrial action
• Employees that are newly eligible for ‘Day 1’ Paternity Leave and Unpaid Parental Leave can give notice

1 April 2026 – Measures that will take effect

• The repeal of the levy that trade unions and employer associations pay to the Certification Officer

6 April 2026 – Phase 1 Substantive Rights Come Into Force

• Maximum Protective Award increased to 180 days gross pay per employee
• ‘Day 1’ Paternity Leave and Unpaid Parental Leave
• Whistleblowing – sexual harassment disclosures included
• Statutory Sick Pay – Lower Earnings Limit and waiting period removed
• Employers with 250+ employees encouraged to publish equality action plans addressing gender equality and menopause support
• Trade union recognition process simplified

7 April 2026 – The Fair Work Agency will come into existence

August 2026 – Measures that will take effect

• Electronic and workplace balloting for Statutory Trade Union Ballots

October 2026 – Phase 2 Implementation

A further set of substantive provisions will come into effect in October 2026 including:

• Employers to take ‘all reasonable steps’ to prevent sexual harassment of their employees
• Obligation on employers to take all reasonable steps to prevent the harassment of their employees on the basis of any protected characteristic by third parties
• Tightening law on tips to require consultation with staff on tipping policies and regular review of policies
• Establishment of the Fair Pay Agreement Adult Social Care Negotiating Body in England
• Procurement – two-tier code for procurement of outsourced services in public contracts (England only)
• Duty on employers to inform workers of their right to join a trade union
• Strengthening trade unions’ right of access
• Prohibition of unfair practices in the trade union recognition process
• New rights and protections for trade union representatives
• Extending protections against detriments for taking industrial action

Measures that will take effect no earlier than October 2026

• Employment tribunal time limits for bringing a claim will increase from three to six months

2027 – Phase 3 & Later Reforms

Many of the most widely discussed employment rights will come into force in 2027, following the conclusion of consultations and the making of more detailed regulations.

January 2027 – Measures that will take effect

• Unfair dismissal qualifying period reduced to 6 months
• Compensatory awards for unfair dismissal claims will no longer be capped
• Fire and rehire restrictions and automatic unfair dismissal

Measures that will take effect in 2027 – dates to be confirmed

• Mandatory action plans on gender equality and menopause for employers of 250+ employees
• Enhanced dismissal protections for pregnant women and new mothers
• Regulations on what is to be regarded as ‘reasonable’ steps to prevent sexual harassment
• Extending blacklisting protections
• Industrial relations framework expected
• Regulation of umbrella companies
• Collective redundancy – changes to collective consultation threshold
• Flexible working – reasonableness test introduced
• Bereavement leave including pregnancy loss
• Introduction of right to guaranteed hours and right to reasonable notice and short notice payments
• Electronic and workplace balloting for recognition and derecognition ballots

If you require any support with any matters of Employment Law, please contact the Geldards Employment Team below.