How does the Employment Rights Act 2025 impact HR processes and recruitment?

The Employment Rights Act 2025 represents the most sweeping reform of UK employment law in a generation.

We saw the first major wave of changes land on 6 April 2026, touching virtually every stage of the employee lifecycle.

However, when we ran a poll, 75% of HR and payroll professionals stated they aren’t yet fully prepared.

Our team of experts is here to help!

In a recent webinar, we explored what these changes actually mean in practice and how businesses can treat this as a strategic opportunity, not just an operational headache.

Here, in this blog, we summarise the key HR and recruitment advice from our webinar panel:

• Lizzy Barry, HR Director
• Dan Grace, Director of HR Consulting
• David Kisiaky, Senior Manager of Product Management

Employment Rights Act 2025 summary: the April 2026 changes

The first major wave of Employment Rights Act changes came this April.

To recap, these changes include:

• Day-one paternity leave: under the April changes, paternity and ordinary parental leave, but not shared parental leave, become a ‘day-one’ right, meaning no qualifying period of service is required to assert these rights.
• Day-one Statutory Sick Pay (SSP): the Employment Rights Act removed the three waiting days for SSP and the Lower Earnings Limit threshold (LEL) was also abolished.
• Collective redundancy protection: protective awards for failure to collectively consult on redundancies involving 20 or more employees have doubled from 90 days to 180 days’ pay per employee.
• Whistleblowing protections (sexual harassment): new measures have been introduced to safeguard employees from detriment and unfair dismissal when raising workplace issues relating to sexual harassment.
• Gender pay gap and menopause action plans: voluntary from 6 April 2026, and expected to become mandatory in 2027,any employer with 250 or more employees will be required to report their gender pay gap data and create action plans around menopause and gender pay gaps.
• Fair Work Agency: a new Fair Work Agency has been established to take enforcement action on employment rights against unscrupulous employers.

Doing the right thing

While all these changes may feel overwhelming, many of them simply formalise what good employers should already be doing.

Lizzy emphasised this point during our webinar: “These changes, which are simply the right thing to do as an employer, are things organisations should already be doing, even if they weren’t necessarily legally compelled to do so.”

If you haven’t already, start by auditing your current policies and processes against the current and incoming changes.

For many organisations, quick wins like updating policies and configuring payroll systems can be done immediately, while the more strategic work around culture, training and management capability will take longer to embed.

Critically, the work doesn’t stop in April.

Further waves of change are expected in October 2026 and throughout 2027, meaning businesses need ongoing review and adaptation.

Employment Rights Act 2025: looking forward to the October 2026 changes

Later this year, in October, more changes are due to come in.

However, in many cases, consultation is required first.

The expected changes include:

• Employment tribunal claim deadlines will double from three to six months for most claims, including unfair dismissal and discrimination.
• Fire and rehire practices (i.e. to change contractual terms) will be severely restricted, making most such dismissals automatically unfair.
• The October 2024 changes, which required employers to take reasonable steps to prevent sexual harassment, are further increased, and employers will be liable for all types of third-party harassment unless they took ‘all’ reasonable steps to stop it from happening.
• More changes to trade union law will come into force, including a new duty on employers to actively inform workers of their right to join a union, updates on a trade union’s right of access to the workplace (for instance to canvass for union membership among staff) and new rights to reasonable accommodation and facilities for union representatives to perform their duties as well as time off for union equality representatives.
• Workers taking part in industrial action will be protected against detriment, in addition to unfair dismissal – ‘detriment’ is when someone is treated less favourably by their employer, in this case, for going on strike or taking associated actions.
• Changes to NDAs will mean that clauses preventing workers from alleging or disclosing work-related harassment or discrimination are void.

Employment Rights Act 2025: looking forward to the 2027 changes

Next year, further changes are expected.

Although scheduled later, these changes will likely have the greatest practical impact:

• Employees will gain the right to claim unfair dismissal after six months’ service, reduced from the current two years. This provision will be retrospective in effect, so all employees with at least six months’ service as of 1 January 2027 will be able to bring an unfair dismissal claim. What this means in practice is that an employee who starts work on or before 1 July 2026 will be covered immediately on the new qualifying period coming into effect, as they will have at least six months’ service on 1 January 2027.
• Removal of the statutory cap on the unfair dismissal compensatory award – it has not yet been explicitly confirmed that this will take effect on the same date as the reduction in the unfair dismissal qualifying period, but this seems likely.
• Action plans around menopause and gender pay gaps will become mandatory.
• The law will clarify what ‘all reasonable steps’ means in terms of employers having to prevent sexual harassment.
• A new right to statutory bereavement leave will be introduced, but we do not know if this will be paid or unpaid yet.
• The rights of pregnant workers and those returning from maternity leave will be enhanced.
• Workers will have the right to be paid if their shift is cancelled, moved or cut short by an employer.
• In a huge boost to zero-hours workers, they will have the right to guaranteed working hours if they want them.
• If an employer rejects a flexible working request due to a genuine business reason, it is currently good practice to state the reasons for doing so and why they consider the refusal to be reasonable – this will become a legal requirement.
• A new industrial relations framework will be introduced to help unions and employers work together more effectively.
• Increased protection from discrimination and blacklisting for union members.
• The Woolworths case in 2014 created much debate and confusion on which workplaces counted towards the threshold for collective consultation in redundancy situations. The law will clear this up once and for all by clarifying that employers will have to take into account the total number of redundancies across their whole organisation (not just individual workplaces) in assessing whether they need to collectively consult. Currently, employers only need to consider the impacted numbers at the individual workplace where the redundancies are proposed.
• The definition of ’employment business’ will be expanded to include umbrella companies, bringing them under the same regulations and accountable to enforcement by the relevant bodies as are recruitment agencies currently.

The Fair Work Agency: what employers need to know

Of all the changes coming through the Employment Rights Act, the Fair Work Agency (FWA) has perhaps generated the most anxiety among employers.

Understandable as the FWA represents an entirely new enforcement body, and much of how it will operate in practice remains to be seen.

More detail on the Fair Work Agency will emerge over the coming months, but in the meantime, David offered some valuable perspective during our webinar on what businesses should be thinking about now: “The Fair Work Agency is being brought in to amalgamate compliance and policy agencies.

“Now, if the Fair Work Agency comes into your business, they’ll want to know more than what initially brought them in, so you need to have your records right.

“The requirements for keeping some records can go up to six years, plus the current tax year.

“That’s a lot of record-keeping.”

Fair Work Agency: don’t get caught out

David’s advice underscores a critical point: the Fair Work Agency won’t be looking at a single issue in isolation.

FWA will want to see the full picture:

• Your records
• Your processes
• Your compliance across the board

It’s essential that your documentation is robust and your processes are watertight.

Lizzy echoed this sentiment: “You really don’t want the Fair Work Agency to come knocking, so make sure you’re comfortable and doing everything by the book.

“Ensuring you’re getting really robust legal advice, particularly while everyone is still feeling their way through the new requirements, will be important to help you feel confident.

“At the minute, their scope seems quite broad, so we’ll have to see whether there are specific areas or types of violations they choose to focus on.”

What does the Employment Rights Act 2025 UK mean for recruitment?

The Employment Rights Act will have significant implications for how you attract and hire new talent.

With the expansion of day-one rights, the relationship between employer and candidate shifts from the very first interaction.

Lizzy explained how these changes could reshape the recruitment landscape: “Certainly, it’s giving people more safeguards.

“I think it now levels the playing field between new and existing employees.

“Hopefully, from a candidate perspective, it gives people some comfort that they have greater levels of protection.

“What that then means is that, because the playing field has been raised for everybody, the expectations of what employees are looking for in a business may be higher.

“Candidates will now consider if there are organisations that are further enhancing their benefits or offering broader opportunities for progression and development.”

Unfair dismissal changes and what they mean for recruitment

Coming in 2027, the reduction of the unfair dismissal qualifying period, from two years to six months, will have a profound impact on how businesses approach recruitment and onboarding.

Lizzy explained: “I think it’s worth saying that nobody hires someone hoping they’re not going to work out.

“Whether that’s six months or two years, no one wants to hire the wrong person.

“But rather than having a 24-month period to assess whether someone is a good fit, it will be a much shorter timeframe, and those conversations need to happen much sooner.

“So, it’s about making sure recruitment and selection practices are really robust, and that you’re doing things like assessment centres, trial days and on-the-job training to understand what people are like before you bring them in.

“Then it’s about making sure your managers really understand what good performance looks like, and that you’re measuring that from day one.

“For example, put in place regular, documented check-ins each month during someone’s first six months in a new role, so that any performance concerns are identified and addressed very quickly.

“There are many ways this can be seen as a benefit.

“Rather than allowing underperformance to drag on before it’s properly addressed, this encourages employers to tackle issues sooner, but only if they have the right policies, training and support systems in place.”

Understanding the risks

David highlighted the potential risks: “The amount of litigation and potential conflicts being addressed by the courts and tribunals could increase.

“The two-year window perhaps meant we didn’t see a lot of litigation, but now, with it reducing to six months, we may see more employers being subjected to unfair dismissal processes.

“Also, if you previously thought you were dealing with one individual, this time around, you may also be dealing with the Fair Work Agency.”

Dan offered a crystal clear piece of advice: “When clients ask me what they should do about this unfair dismissal risk, my number one answer is, perhaps a bit cheeky: don’t dismiss anyone unfairly.”

Now, Dan’s advice may sound simple, but the underlying message is important.

If your processes are fair, documented and consistently applied from day one, you massively reduce your exposure, regardless of whether the qualifying period is six months or two years.

Homework

With the first wave of Employment Rights Act changes now upon us and further reforms landing soon, the window for preparation is narrowing.

Lizzy Barry left our webinar audience with a clear call to action: “I’d like to give everyone some homework.

“If there’s something you think might cause an issue, take it away, research what you need to do and make sure you’re starting the process now.

“Some of these are quick wins, such as system and policy updates, which can be done straight away.”

If you’re looking for further guidance on what we’ve covered in this blog or want to understand the impact the Employment Rights Act will have on your payroll, check out the on-demand webinar!