January 2027
Unfair dismissal protection from 6 months
The qualifying period drops from 2 years to 6 months. The cap on compensatory awards is removed. Expect more tribunal claims — get probation processes watertight.
Employment Rights Act 2025
The biggest shake-up of UK employment law in a generation.
28 separate reforms, four key dates, one Act. We've broken down what it all means for SMEs — and exactly what to do, when. No jargon, no scare stories.
28+
reforms
4
key dates
6mo
to unfair dismissal
At a glance
What the Act actually does
The Employment Rights Bill received Royal Assent on 18 December 2025, becoming the Employment Rights Act 2025. It's part of the Government's "Plan to Make Work Pay" and rewrites large parts of the Employment Rights Act 1996.
Changes are being rolled out in waves through 2026 and into 2027 — most are not live yet. That's good news: it gives SMEs a runway to update contracts, policies, processes and manager training before the toughest provisions land.
The headline change? Unfair dismissal becomes a right after 6 months — down from 2 years — from January 2027. Plus stronger sick pay, day-one family leave, harassment liability for third parties, and brand-new rights for zero-hours workers.
Five pillars
Where the law is heading
Stronger job security
Unfair dismissal from 6 months; fire-and-rehire restricted; uncapped tribunal awards.
Better family rights
Day-one paternity & parental leave; pregnancy/return-to-work protections strengthened.
Predictable work
Guaranteed hours, shift notice and cancelled-shift pay for zero/low-hours staff.
Safer workplaces
Third-party harassment liability and 'all reasonable steps' duty for sexual harassment.
Active enforcement
New Fair Work Agency, doubled tribunal time limits, mandatory holiday records.
The big six
High-impact changes for SMEs
These are the changes most likely to land you in tribunal — or cost real money — if you're not prepared.
January 2027
Fire and rehire becomes automatically unfair
Dismissing and re-engaging someone on worse terms will, in most cases, be automatically unfair. A new statutory code of practice will follow.
April 2026
Statutory Sick Pay from day one
SSP is now paid from the first day of illness, and the lower earnings limit has been removed — meaning more workers qualify and absence costs rise.
April 2026
Collective redundancy award doubled
The protective award for failure to consult in collective redundancy increased from 90 to 180 days' pay — and consultation triggers will widen across the whole organisation in 2027.
October 2026
Third-party harassment liability
From 30 October 2026, employers will be liable for harassment by customers, clients or contractors unless they've taken 'all reasonable steps' to prevent it.
Later 2027
Zero-hours and low-hours rights
Workers gain the right to guaranteed hours reflecting those regularly worked, plus reasonable notice of shifts and payment for cancelled or curtailed shifts.
Need a hand?
Don't navigate the Employment Rights Act alone
Whether it's rewriting contracts, updating policies or training your managers — our CIPD-qualified team will help you get ready, calmly and commercially.