The Employment Rights Act 2025 is Here: What Employers Need to Know
Last Reviewed: 17 December 2025
It's official - the Employment Rights Bill has now passed Parliament.
The Bill has now cleared all stages and is expected to receive royal assent before the end of the year becoming the Employment Rights Act 2025. This marks one of the most significant shifts in UK employment law in recent years, with wide-ranging implications for employers.
Unfair Dismissal: qualifying period reduced
As widely anticipated, the qualifying period to bring an ordinary unfair dismissal claim will reduce to six months.
The Government had initially proposed removing the cap on unfair dismissal compensation altogether. Following pushback from the House of Lords, the Government has agreed instead to consult on the cap and publish an impact assessment on the potential consequences of its removal. This is a development employers should watch closely, as it could have major financial and litigation risk implications.
Key amendments accepted by the House of Lords
The Lords also accepted a number of Government amendments, including:
- Guaranteed hours: employers must offer a contract guaranteeing hours where an employee has worked those hours consistently over the previous 12 weeks.
- Industrial action ballots: removal of the requirements for a 50% turnout.
- Trade union political funds: reforms to how political fund arrangements operate.
When do the changes take effect?
The first wave of reforms is expected to come into force in Spring 2026, including:
- Statutory Sick payable from day one of employment
- Day-one rights to paternity leave and unpaid parental leave
- An increase to the collective redundancy protective award
- Expanded whistleblowing protections covering sexual harassment disclosures
Further changes will follow on a phased basis.
What should employers do now?
Employers should start preparing early. Reviewing employment contracts, workplace policies, manager training and compliance frameworks now will help reduce risk and ensure a smoother transition as the new rules come into force.
As employment solicitors advising businesses across Sussex, Acumen Law will continue to track developments closely and provide practical, expert guidance as the detail of the legislation and accompanying regulations emerge.
We’ll keep you updated as the new rules take shape and as always, we’re here to help employers stay compliant and confident just get in touch.
