What will the Employment Rights Act 2025 mean for you?

Last year we published an article on the Employment Rights Bill. This Bill is now the Employment Rights Act 2025 (the ‘Act’) and introduces a number of new workplace rights. Some of these changes are already in force, but the majority will come into force throughout 2026 and 2027. Both employees and employers should be aware of how these changes might impact them.

We wanted to let readers know the updated position on the points discussed in our previous article is as follows:

• Unfair Dismissal – it was proposed that the current two-year qualifying period to bring an ‘ordinary’ unfair dismissal claim would be removed completely, however, this proposal was changed before the Act became law. The two-year qualifying period is now being reduced to six months from 1 January 2027.
  
  More surprisingly, the compensation cap for unfair dismissal claims which is currently the lower of 52 weeks’ pay or £118,223 has been removed. This means that from 1 January 2027 some employees will be able to bring higher value unfair dismissal claims;
  


• Paternity Leave and Unpaid Parental Leave – the current length of service requirements to be eligible for these will be removed from 6 April 2026 and will become a ‘day one right’. This is likely to provide better support to working parents;
  


• Statutory Sick Pay (SSP) – access to SSP is being improved and from 6 April 2026 it will become a right from the first day of absence. The lower earnings limit required to qualify will also be removed on this date;
  


• Zero-hour Contracts – ‘exploitative’ zero-hour contracts are not being banned completely, but there will be a duty for employers to offer certain workers guaranteed hours based on what they regularly worked over a reference period. This change is expected to be implemented in 2027;
  


• Menopause – larger employers will be required to produce ‘menopause action plans’ to assist employees and in an attempt to support gender equality. These plans will be voluntary from 6 April 2026 before becoming mandatory in 2027;

• Fire and Re-hire – from 1 January 2027, terminating an employee’s contract and re-engaging them on less favourable terms or dismissing them for failing to agree to a change in their contract will become grounds for claiming automatic unfair dismissal. An exception to this is where the employer’s decision is related to financial difficulties;
  


• Bereavement Leave – bereavement leave will no longer be limited to parents following the loss of a child or pregnancy loss after 24 weeks. For example, the entitlement will be extended to those experiencing pregnancy loss before 24 weeks. This change will come into force in 2027;
  


• Flexible Working – employers will be required to state the statutory ground for refusal of a flexible working request and to explain why they believe the refusal is reasonable. This is already good practice but will change formally in 2027. However, employers will still have to be aware of potential discrimination claims, for example, as now and in the future simply following the Flexible Working procedures is not necessarily enough.

These are all important areas of employment law for both employers and employees, and it will be interesting to see how these matters develop.

How can we help you with employment law?

We offer a full range of employment law services to employers and employees. We provide clients with genuine experience and expertise. We can advise and represent clients in relation to pre-employment issues such as recruitment decisions, employment contracts and policies, employment law issues in the workplace, termination of employment, settlement agreements, and disputes including Employment Tribunal proceedings. We also offer a unique approach to employment law fees providing real value for money for an expert service.

We are always delighted to assist our clients with employment law issues that arise. We understand that these are difficult and often sensitive issues, and we try to help in a way which is effective, sympathetic, and of course confidential.

If we can be of assistance with employment law matters, please contact one of our solicitors on 0131 554 8649, or you can find more details on our website www.elpamsolicitors.co.uk/employment-law/.

Article written by Kirsty Ross, Trainee Solicitor,

Employment Law & Commercial