The new Employment Rights Act (ERA) 2025, which received Royal Assent at the end of December 2025, marks a pivotal moment in UK employment law. As the cornerstone of the government’s commitment to modernising work, the ERA 2025 introduces a comprehensive raft of reforms which are designed to enhance worker security while imposing rigorous new compliance obligations on employers. From stronger unfair dismissal and harassment protections to new practices on ‘fire and rehire’ and guaranteed hours, 2026 will bring significant changes for employers.
A central pillar of the 2025 reforms is the radical recalibration of the law governing unfair dismissal. The reforms have reduced the longstanding two-year qualifying period to six months (after a concession on day-one rights). This amendment, anticipated to take effect in January 2027, effectively transforms the first half-year of employment into a mandatory statutory probation period. During this window, employers may operate a “light-touch” dismissal process for performance or conduct issues, provided that they adhere to specific procedural safeguards. Furthermore, the removal of the statutory cap on compensatory awards for unfair dismissal significantly increases employers’ potential liability, aligning these claims more closely with the uncapped nature of discrimination and whistleblowing litigation.
The Act also codifies stringent protections against the practice of “fire and rehire”. Under the new Section 38A, a dismissal is deemed automatically unfair if the primary reason is the employee’s refusal to agree to a variation of their contractual terms, unless the employer can demonstrate that the changes were necessary to ensure the business remained a going concern. This creates an exceedingly high evidentiary bar, as routine cost-cutting or efficiency measures will no longer suffice as a legal justification for unilateral contractual changes. Coupled with this is the expansion of collective redundancy consultation obligations. The threshold for these obligations now applies across an entire organisation rather than being restricted to a single “establishment,” and the maximum protective award for failure to consult has doubled to 180 days’ pay.
As of 18 February 2026, the first significant wave of substantive changes under the ERA 2025 officially comes into force. The most immediate and profound impact of the 18 February commencement lies in the comprehensive repeal of the majority of the Trade Union Act (TUA) 2016. For the first time in a decade, the administrative and legal hurdles required to initiate industrial action have been substantially lowered. The additional 40% support threshold previously required for ballots in “important public services” has been abolished, leaving only the standard 50% turnout requirement in its place. Furthermore, the mandatory notice period an employer must receive before industrial action begins has been reduced from fourteen days to just ten. These changes, coupled with the extension of a successful ballot’s mandate from six months to a full year, represent a significant shift in industrial relations, requiring employers to react with far greater operational speed when faced with potential disruption.
Parallel to these structural shifts in union law is the immediate enhancement of legal protections for employees participating in industrial action. As of today, any dismissal of an employee for taking part in protected industrial action is deemed automatically unfair, regardless of the duration of the action. This removes the longstanding “12-week protected period” and places a permanent shield over striking workers, effectively making it legally perilous for an employer to terminate staff in response to persistent industrial disputes. The ERA 2025 also introduces new protections against detriments intended to deter workers from participating in union activities, although the full regulatory detail of what constitutes a “prescribed detriment” is expected to be refined in further statutory instruments later this year.
Beyond industrial relations, 18 February 2026 serves as a critical “point of entry” for parents seeking to benefit from the new family-friendly regime. While the full transition to “day-one” paternity and unpaid parental leave is scheduled for 6 April 2026, the transitional regulations coming into force today allow newly eligible employees to begin serving their formal notices. This means that an employee who previously lacked the 26-week or 52-week qualifying service can now legally notify their employer of their intention to take leave on or after the April commencement date. Employers must, therefore, ensure that their internal human resources (HR) systems and leave-tracking software are updated immediately to handle these advanced notifications, as any failure to recognise a valid notice served today could lead to claims of statutory interference.
