The Employment Rights Act 2025 brought the biggest overhaul of UK employment law in a generation. Here is every change that affects your pay, sick pay, family leave, and job security.
The Employment Rights Act 2025, which received royal assent in December 2025, is the most significant overhaul of UK employment law since the Employment Rights Act 1996. Changes are being implemented in phases across 2026 and 2027. Many workers are entirely unaware of rights they have already gained. This guide covers everything that has changed or is changing, what it means for your pay and working conditions, and what you should do about it.
The first major implementation date was 6 April 2026. These changes are already in force:
This is arguably the most significant immediate change for working people. Before April 2026, Statutory Sick Pay (SSP) had a three-day waiting period, you received nothing for the first three days of illness, with SSP kicking in from day four. The Employment Rights Act abolished this waiting period entirely.
From 6 April 2026:
In practical terms, a worker earning £300/week who was previously sick for five days would have received two days of SSP (£47.50). Under the new rules, they receive five days of SSP (£119.00, or 80% of weekly earnings if lower). For lower paid workers who were previously excluded entirely, any SSP is a meaningful improvement.
Before April 2026, paternity leave required 26 weeks of continuous service before you were entitled. Unpaid parental leave required one year of service. Both requirements were abolished.
From 6 April 2026, all employees have the right to:
The pay rate for Statutory Paternity Pay also increased from £187.18 to £194.32 per week from April 2026.
A new category of leave was introduced for bereaved partners. This allows a partner who loses their baby or the mother to take paternity leave in circumstances previously not covered. This is a day one right from April 2026.
The protective award payable to employees where an employer fails to properly consult during collective redundancies (of 20 or more employees) doubled from a maximum of 90 days pay to 180 days pay per affected employee. This is a substantial increase in the financial consequences for employers who fail to follow proper process, and a meaningful protection for workers facing mass redundancies.
A new enforcement body, the Fair Work Agency, was established with powers to investigate and enforce employment rights. This agency has stronger teeth than its predecessor, including the ability to bring civil proceedings on behalf of groups of workers and inspect employers proactively rather than only in response to complaints.
The time limit for bringing most Employment Tribunal claims increased from three months to six months. This is significant, the previous three month limit was widely regarded as too short, particularly for workers who had recently left employment and were not immediately aware of their rights or did not initially intend to make a claim.
The extension applies to most claims including unfair dismissal, discrimination, and unlawful deduction from wages. Specialist claims (such as those under TUPE) have their own timescales and you should seek legal advice for specific situations.
The most significant changes are scheduled for 2027 and beyond:
Currently, employees need two years of continuous employment before they can claim unfair dismissal. From 2027, this threshold reduces to six months. This is a fundamental change to employment protection, it means that from six months into any job, your employer must have a fair reason to dismiss you and must follow a fair process.
The compensatory award cap for unfair dismissal is also being removed, potentially making claims more valuable. Currently the maximum compensatory award is the lower of £123,543 or 52 weeks pay.
From 2027, dismissing employees and re engaging them on worse terms (fire and rehire) will be automatically unfair dismissal in most cases. A limited exception exists for employers facing genuine financial difficulty where the change is necessary to avoid insolvency, but this is a high threshold and employers cannot simply use financial pressure as a pretext.
Workers on zero hours and low hours contracts will gain the right to be offered a guaranteed hours contract if they regularly work consistent hours over a reference period. This does not prohibit zero hours contracts but gives workers the right to move off them if their actual working pattern is regular and predictable.
The direct pay implications of the April 2026 changes are:
| Change | Previous position | From April 2026 | Financial impact |
|---|---|---|---|
| SSP waiting period | 3 days unpaid at start of illness | No waiting period | Up to £72/week gain for average earners in first week of illness |
| SSP lower earnings limit | No SSP if earning below £123/week | SSP for all employees (80% of earnings) | Low paid workers now receive SSP for first time |
| SSP weekly rate | £118.75/week | £123.25/week | +£4.50/week increase |
| Statutory Paternity Pay | £187.18/week | £194.32/week | +£7.14/week increase |
| Collective redundancy protection | Max 90 days pay per employee | Max 180 days pay per employee | Doubled protection if employer fails consultation |
The Employment Rights Act is the centrepiece of the Labour government's Make Work Pay agenda. The underlying policy aim is to shift the balance of power in the employment relationship toward workers, strengthening protections, increasing enforcement, and closing loopholes that allowed employers to reduce costs at workers expense.
Employer groups have raised concerns about the cost and complexity of implementation, particularly for smaller businesses. The Federation of Small Businesses and the CBI have both argued that some provisions, particularly the reduced unfair dismissal qualifying period, may make smaller employers more cautious about hiring.
The countervailing argument, supported by economic evidence from countries with stronger employment protections, is that secure employment actually improves productivity and reduces the economic costs of high turnover. The evidence from comparable economies suggests that strong employment protection need not harm overall employment levels, though the specific UK context and implementation details will ultimately determine the outcome.
Use our salary checker and take home calculator to understand your full pay picture.
Calculate Take Home Pay →The Act introduced day one rights to SSP (from April 2026, no three-day wait), day one paternity and parental leave rights, doubled collective redundancy protection, and established the Fair Work Agency. From 2027, unfair dismissal protection extends to workers from six months of service rather than two years.
From 6 April 2026, Statutory Sick Pay is payable from the first day of sickness absence. The previous three-day waiting period was abolished. The weekly rate increased to £123.25 or 80% of weekly earnings, whichever is lower.
Not yet. The reduction in the qualifying period from two years to six months is scheduled for 2027 implementation. As of August 2026, the qualifying period for unfair dismissal remains two years.
The guaranteed hours contract right for zero hours and low hours workers is still being developed for 2027 implementation. As of August 2026, zero hours contract workers do not yet have a statutory right to guaranteed hours, though other employment rights (SSP, paternity leave etc.) apply from day one.
The Fair Work Agency is a new enforcement body established by the Employment Rights Act with powers to investigate employment rights violations, bring civil proceedings on behalf of groups of workers, and conduct proactive inspections of employers.