The New Employment Rights Act: What UK Employers Need to Know

Parliament has passed what the government is calling “the biggest upgrade in employment rights for a generation” – the Employment Rights Bill. This is expected to receive Royal Assent imminently and will become law soon.

This is a big moment for UK workplaces. A lot of the change formalises what good employers already do, but there are also new obligations that cannot be ignored. And if you’re responsible for people operations, understanding what’s coming matters.

Below, we break down the key areas of change and what you need to think about now (before reforms begin to take effect from 2026).

1. Job Security & Flexibility

This legislation changes the balance of flexibility and protection in how people work.

Key shifts include:

• New rights for workers on zero-hours contracts – including more predictable hours and compensation for last-minute cancellations.
• The controversial practice of “fire and rehire” becoming significantly harder – dismissing someone for refusing new terms will generally be automatically unfair.
• The UK’s Employment Rights Act 2025 significantly changes unfair dismissal by reducing the qualifying period from two years to six months (effective Jan 1, 2027) and removing the cap on compensation, allowing for uncapped awards.

What to do now:
Ensure your contracts, policies and onboarding practices are clear and robust from the start of employment, because there won’t be room for ambiguity once these rights apply.

2. Pay & Statutory Sick Pay (SSP)

There are important enhancements in financial protection for employees.

Notable changes:

• SSP will become a day-one right, removing the previous waiting period of 3 days.
• Tipping and gratuities will be subject to stronger consultation requirements – employers will need to involve staff when updating their tipping policies.

What to do now:
Review your budgeting and payroll approach to account for potential increases in sick pay costs and make sure your tipping policies are formalised, transparent, and agreed with employees.

3. Family Leave & Flexible Working

Support for working families and flexible working is being strengthened.

Key points:

• Paternity Leave from day one of employment.
• Flexible working requests must be handled transparently – reasons for any rejection must be provided, and must be reasonable.
• New protections against dismissal for pregnant women and mothers returning from maternity leave.

What to do now:
Check that your family leave and flexible working policies are clear, fair and applied consistently in practice.

4. Wellbeing & Equality Responsibilities

Employers’ duties to create safe, equitable workplaces are expanding.

This includes:

• A strengthened duty to take all reasonable steps to prevent sexual harassment.
• Coverage of harassment by third parties (e.g. clients or customers).
• For relevant employers, requirements to produce gender pay gap action plans and support employees experiencing menopause.

What to do now:
Ensure your anti-harassment policies, training and equality reporting approaches are up to date and robust.

5. Trade Unions & Enforcement

Workplace relations and enforcement mechanisms are also changing.

Highlights:

• Changes to industrial action rules, including shorter notice periods for strikes.
• A new Fair Work Agency with stronger investigatory and enforcement powers.
• The window for bringing an Employment Tribunal claim will extend from 3 to 6 months.

What to do now:
Be aware that enforcement is likely to be more robust overall. Staying compliant is not just best practice, it’s essential.

What This All Means

For proactive, values-led businesses, many of these changes feel like formalising good practice, the stuff you should already be doing if you care about fairness and clarity. But that’s exactly the point: good practice is becoming the standard, not the exception.

This isn’t legislation to fear, it’s a prompt to make sure your people-process foundations are strong, compliant and practical. And if you need support with that, we’re here to help. Book a call  with us to talk through what these changes mean for your business and the right next steps for you.