As we approach a seismic shift in UK employment law, all employers and employees need to brace for change. The Employment Rights Act (ERA) 2025 is set to radically revise day-to-day operations for businesses of every size. Here we provide a breakdown of what is changing and what you need to do immediately.
Family Rights: “Day One” Entitlements
Starting 6 April 2026, the ERA will fundamentally reshape the UK workplace by transforming several longstanding employment hurdles into “Day 1” entitlements. For parents, the previous 26-week service requirement for paid paternity leave and the 1-year requirement for unpaid parental leave will be abolished, allowing new starters to access these rights immediately after joining a firm. This flexibility extends to the timing of leave, as fathers will finally be permitted to take paternity leave even after finishing a period of shared parental leave, a change that applies to all babies born or placed for adoption on or after the April 6th deadline. Employers should also note the recent introduction of Bereaved Partner’s Paternity Leave, which offers up to 52 weeks of protected leave for those whose partner dies before a child’s first birthday.
Removing the Barriers to Statutory Sick Pay
The financial and administrative landscape of sickness absence is also changing fundamentally as the 3-day “waiting period” for Statutory Sick Pay (SSP) is removed. Under the new rules, employees are entitled to receive SSP from their first day of illness, eliminating the previous gap where the first 3 days were unpaid. Additionally, the Lower Earnings Limit (LEL), which previously required employees to earn at least £125 pw to qualify, has been scrapped. All workers, regardless of their weekly pay, are now eligible for either the standard rate of £123.25 pw or 80% of their average weekly earnings if that figure is lower. This change necessitates an immediate review of payroll systems and sickness policies to factor in a likely increase in both the number of eligible employees and the total expenditure on short-term absences.
Redundancy Risks and Whistleblowing Protections
The cost of procedural errors during collective redundancies has effectively doubled, as the maximum protective award for failing to properly inform and consult on redundancies involving 20 or more staff has increased from 90 days to 180 days of gross pay. This change places a significant premium on early and transparent consultation with staff and unions to minimise the risk of devastating financial penalties. At the same time, whistleblowing laws have been broadened to explicitly include complaints of sexual harassment as “protected disclosures”. This means that any worker who reports harassment is shielded by law against detriment or unfair dismissal, requiring employers to update their internal whistleblowing and harassment policies to reflect this heightened level of legal protection.
The Rise of the Fair Work Agency and Trade Union Reform
To ensure these new rights are strictly followed, the government has established the Fair Work Agency (FWA) as a single, powerful enforcement body. The FWA has the authority to inspect workplaces, audit payroll records for minimum wage and holiday pay compliance, and bring court proceedings against any organisations that fall short of statutory standards. This increased oversight coincides with major trade union reforms that make it significantly easier for unions to gain recognition.
The membership threshold for recognition applications has dropped from 10% to just 2%, and the requirement for a 50% turnout in industrial action ballots has been removed. With the introduction of electronic and workplace balloting, the logistical barriers to organising industrial action have been lowered, making it essential for employers to cultivate positive, proactive relations with their workforce.
New Rates and Equality Planning
Finally, all employers must ensure that their payroll reflects the new statutory rates effective this April, including the National Living Wage (NLW) increase to £12.71 per hour for those aged 21 and over, while statutory maternity, paternity, and adoption pay have also risen to £194.32 pw.†
In conclusion, this April’s reforms under the ERA 2025 represent a fundamental shift in the UK’s legislative landscape, moving away from service-based entitlements and toward a model of immediate workplace protection. For employers, the removal of “waiting days” for sick pay and the transition to “Day 1” rights for family leave require more than just a policy update; they necessitate a shift in financial forecasting and a more proactive approach to workforce management. With the establishment of the FWA and the doubling of protective redundancy awards, the cost of non-compliance has never been higher. By auditing payroll records, refreshing whistleblowing procedures, and engaging constructively with trade unions now, businesses can mitigate these new risks and ensure they are positioned as fair, compliant, and modern places to work. As these changes take effect, we will keep you up to date and explore the practical implications of the ERA 2025 in greater detail.
†While mandatory Equality Action Plans (EAPs) regarding gender pay and menopause support will not become a legal requirement until 2027, firms with 250 or more employees are encouraged to begin publishing these plans on a voluntary basis this year to demonstrate their commitment to workplace equality.
