The infamous Employment Rights Bill became law on the 18th of December 2025 and is now known as the Employment Rights Act 2025.
The Act introduces some of the most significant changes to UK employment law in recent years. Many of the changes will come into force gradually throughout 2026 and 2027, meaning employers should begin preparing now to ensure their policies, procedures, and contracts remain compliant.
For businesses, particularly small and medium-sized employers, these changes will have practical implications for day-to-day management of staff. Below we outline some of the key developments and what they may mean for your organisation.
Day One Rights to Parental Leave Under the Employment Rights Act 2025
Employees will gain day one rights to paternity leave and unpaid parental leave, removing previous service requirements. This change is intended to provide greater support for working families but will require employers to ensure that their leave policies and HR processes are updated accordingly.
Statutory Sick Pay Reform
Changes to Statutory Sick Pay (SSP) are also expected to come into effect during 2026. Under the new framework:
✓ The lower earnings limit for SSP will be removed.
✓ SSP will become payable from the first day of sickness absence, rather than after the traditional 4 day waiting period.
These reforms will increase access to sick pay for lower-paid workers but may also increase cost and administrative obligations for employers.
Unfair Dismissal Law Changes Coming in 2027
Looking ahead, further reforms are coming into force in 2027, including a reduction in the qualifying period for bringing an unfair dismissal claim and the removal of the compensatory award limit. The period will decrease from two years’ service to six months, which could significantly increase the number of employees eligible to bring claims and their compensation awards.
For employers, this change underlines the importance of following fair procedures and maintaining clear documentation when dealing with performance, conduct, or dismissal matters.
How Employers Can Prepare for the Employment Rights Act 2025
The Employment Rights Act 2025 represents a major shift in the UK employment law landscape. While some reforms will not take effect until later phases of implementation, businesses should begin reviewing their employment practices now.
Key steps may include:
✓ Updating employment contracts and staff handbooks
✓ Reviewing sickness absence and family leave policies
✓ Ensuring managers are trained in fair disciplinary and dismissal processes
Early preparation will help minimise risk and ensure your organisation remains compliant as the reforms take effect.
Employment Law Advice for Businesses: How We Can Help
Here at Fiona Bruce Solicitors, our Head of Employment Law, Tim Grainger, would be more than happy to assist with any queries you have following these reforms.
Tim is a member of the Employment Lawyers’ Association and has a wealth of experience in advising both individuals and businesses. Tim has a strong track record in pursuing fair settlements for our clients and taking matters to Tribunal.
Please contact Rebecca Hall on 01925 263 273 or enquiries@fionabruce.co.uk for more information.
The contents of this post do not constitute legal advice and are provided for general information purposes only ■
