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

The Employment Rights Act 2025 represents the most significant reform of UK employment law in a generation.

Since the original Employment Rights Bill was published, there has been widespread discussion about what’s changing, when those changes will apply, and what it means for small and medium-sized businesses.

If you’re feeling that the picture isn’t entirely clear, you’re not alone. Even within the HR profession, there is ongoing monitoring of consultations, commencement dates and secondary legislation.

This February 2026 blog separates:

  • What is confirmed in law

  • What is legislated but not yet in force

  • What remains subject to consultation

So you can focus on proportionate, informed preparation.

What Is The Employment Rights Act 2025?

The Employment Rights Act 2025 is new UK legislation introduced to reform workplace rights and modernise employment protections. It follows the draft Employment Rights Bill published in 2024 and sets out phased employment law changes expected between 2025 and 2027.

The Act covers wide-ranging areas of employment law, including:

  • Statutory sick pay reform

  • Day-one family leave rights

  • Unfair dismissal qualifying periods

  • Flexible working rights

  • Harassment protections

  • Trade union law

  • Collective redundancy rules

Importantly, these employment law changes are being introduced gradually. There is no single implementation date.

For SME business owners, understanding timing is just as important as understanding substance.

What Is Confirmed and Legislated

The Employment Rights Act 2025 has received Royal Assent. The legal framework is now in place.

Several key employment law reforms are confirmed, with implementation expected in stages.

Statutory sick pay (SSP) reform – expected April 2026

Confirmed reforms include:

  • Statutory sick pay payable from day one of absence (removal of waiting days)

  • Removal of the lower earnings limit for SSP eligibility

For employers, this will impact:

  • Absence management policies

  • Payroll processes

  • Manager guidance around sickness reporting

This is a confirmed legislative change, although final operational guidance may still follow.

Day-one family and parental leave rights – expected April 2026

The Act confirms that certain parental and family leave rights will apply from the first day of employment.

This has implications for:

Employers will need to ensure that new starters are treated in line with updated statutory entitlements.

Reduction in unfair dismissal qualifying period – expected 2027

The qualifying period for ordinary unfair dismissal is expected to reduce from two years to six months.

Although this change is not immediate, it significantly alters risk exposure for small businesses.

It increases the importance of:

For small and medium employers, unfair dismissal risk management will become increasingly important from 2027 onwards.

What Remains Subject To Consultation or Further Detail

Some elements associated with the Employment Rights Act 2025 remain subject to consultation, regulatory detail or phased commencement.

These include aspects of:

  • Trade union reform

  • Collective redundancy protective awards

  • Expanded harassment prevention obligations

  • Certain procedural elements linked to dismissal protections

The overall policy direction is clear. However, detailed regulations and precise implementation dates may still evolve.

This is typical for large-scale employment law reform. Secondary legislation and formal guidance often follow primary legislation.

Why Employment Law Feels Unsettled Right Now

Many employers have commented that the current employment law landscape feels ‘messy’. There are several reasons for this:

  • Phased commencement dates rather than a single implementation date

  • Ongoing government consultations

  • Secondary legislation still being drafted

  • Awaited guidance from ACAS and other advisory bodies

  • Media headlines sometimes blurring confirmed law with proposals

The result is uncertainty about what applies now versus what applies later.

For HR professionals, this means careful monitoring.
For small business owners, it means cutting through noise and focusing on confirmed obligations.

Why Getting Employment Law Compliance Right Matters For SMEs

The risk for small businesses is not deliberate non-compliance — it is misunderstanding timing or acting on incomplete information.

Potential risks include:

  • Outdated employment contracts

  • Policies that do not reflect statutory rights

  • Mishandled dismissals

  • Increased employment tribunal exposure

  • Reputational damage

At the same time, overreacting to proposed changes can create unnecessary cost and operational disruption. Balanced preparation is key.

Practical Steps For Small Employers In Early 2026

Rather than complete policy rewrites, consider structured preparation:

  1. Review sickness absence policies in light of statutory sick pay reform.

  2. Check family leave provisions within contracts and handbooks.

  3. Strengthen probation documentation and performance review processes.

  4. Ensure managers understand the increasing importance of fair process.

  5. Monitor confirmed government updates rather than relying solely on commentary.

Employment law compliance is not about reacting to every headline. It is about understanding confirmed legal change and responding proportionately.

Know When To Get Advice

The Employment Rights Act 2025 signals a long-term shift in UK employment law. However, most employment law changes will take effect gradually between 2026 and 2027.

For small employers, the focus should be on:

  • Clarity

  • Accurate information

  • Sensible preparation

  • Strong people management foundations

Over the coming months, I will publish further employment law updates breaking down specific reforms, including statutory sick pay changes, unfair dismissal reforms and flexible working developments, so you can remain compliant and confident.

Need Further Help?

BloomHR is situated in Portsmouth, Hampshire and helps businesses locally and nationwide. If you are unsure how the Employment Rights Act 2025 affects your business, taking advice early can reduce risk and provide peace of mind. Get in touch with us today to understand how we can help.