Magenta HR Consulting

Employment Rights Act 2025

What has already changed, and what is coming

Most of what you will read about this Act is written for HR departments. This is written for the owner who has to make the decisions. More has already changed than most people realise, and the biggest one for a small team lands on 1 January 2027.

Last reviewed 7 November 2026 by Samantha Newton FCIPD, Chartered Fellow CIPD. General guidance, not legal advice. Dates can change.

1 January 2027 · the one to plan for

Unfair dismissal protection starts at six months, not two years

  • •The qualifying period for ordinary unfair dismissal drops from two years to six months. An employee with six months' service by that date is covered.
  • •The six months has to be served by 1 January 2027, not after it. Anyone who started with you on or before 1 July 2026 is already there. That date has been and gone, so this is not a deadline you are working towards.
  • •The cap on the compensatory award is removed. An award still follows the loss a claimant can evidence, so this is not an automatic or unlimited payout.
  • •The right to request written reasons for dismissal also moves to six months.
  • •There is no new statutory probationary period. It was proposed and then dropped from the final Act when the six-month qualifying period went in instead. Your own probation clause is the only protection you have, and it now has to do its job inside six months.
  • •Dismissals with an effective date of termination before 1 January 2027 remain under the old two-year rule.

The group of employees who can bring an ordinary unfair dismissal claim gets considerably larger, and the ceiling on the compensatory element goes. Neither makes a fair dismissal unsafe. Both make an unfair one more expensive.

Already in force

These dates have passed

If you have not looked at the Act yet, start here rather than with January. Several of these are live now and carry real exposure.

April 2026

Statutory sick pay from day one

SSP is payable from the first day of incapacity rather than day four, and the lower earnings limit has gone, so all eligible employees qualify regardless of earnings. Those earning below the old limit receive a percentage of weekly earnings.

Paternity and parental leave from day one

Both became day-one rights. The old 26-week and one-year service requirements have gone.

Reporting sexual harassment is a protected disclosure

A disclosure that sexual harassment has occurred, is occurring or is likely to occur now sits expressly within whistleblowing protection.

Higher protective award for collective redundancy

The maximum award for failing to consult properly doubled.

October 2026

You are now liable for harassment by third parties

Customers, suppliers and visitors. You are liable unless you took all reasonable steps to prevent it. This is a real change in exposure for any business with a public-facing team.

The sexual harassment duty tightened

From taking reasonable steps to taking all reasonable steps to prevent it.

Fire and rehire is now largely off the table

Dismissing someone for refusing certain contractual changes, including cuts to pay, pension, hours or shift patterns, is automatically unfair. There is a narrow defence, but only where the business faces serious financial difficulty affecting its viability.

Tribunal time limits doubled

From three months to six months for most claims.

Tipping policies need consultation

Where you operate one, it now has to be reviewed with staff and refreshed periodically.

Expected later

Worth knowing about, not worth reorganising around yet

Much of the detail on these sits in regulations that have not been published, so timing and scope can still move.

Guaranteed hours

Zero and low-hours workers will be able to ask for guaranteed hours reflecting what they actually work, measured over a reference period. They can decline and stay as they are.

Notice of shifts, and pay when they are cancelled

Reasonable notice of shifts and changes, plus compensation where a shift is cancelled, moved or cut at short notice.

Refusing flexible working gets harder

You will still need one of the eight statutory grounds, but you will also have to show the refusal was reasonable.

Bereavement leave widens

Extending beyond the loss of a child to at least a week for other bereavements, likely unpaid.

Collective redundancy thresholds change

Counting is expected to move beyond the single establishment, which matters if you run more than one site.

An honest note on the zero-hours changes. The Government's implementation roadmap places them in 2027. Acas guidance says no date has been announced and that implementation is subject to consultation. Both are official sources and they do not currently agree. Treat any firm date you are given on this as a prediction.

What to actually do

Five things worth doing before January

None of them need a lawyer.

1

Look again at anyone under two years' service

From January, six months is the line. Anyone you were treating as low-risk on length of service probably is not any more.

2

Check your probation process actually happens

Probation only protects you if someone reviews it, records it and acts before it ends. Most of the ones I see were never formally closed. Watch the edges too: someone dismissed at five months and three weeks with pay in lieu can tip over the six-month line.

3

Deal with the harassment duty properly

Third-party harassment and the all-reasonable-steps duty are both already live. A risk assessment, a clear policy and trained managers is the whole job, and it is the part most owners have not done.

4

Write dismissals down as you go

With no cap on the compensatory award, a process you cannot evidence costs more. The fix is boring and it works.

5

Do not panic-change your contracts

Most of this needs no new contracts, and changing terms badly creates a different problem. Work out what actually applies to you first.

Go deeper

The three changes that need more than a paragraph

This page is the overview. These go into the detail on the parts that carry the most risk for a small team.

Not sure which bits apply to you?

Most owner-managed businesses are affected by three or four of these, not all of them. Twenty minutes is usually enough to work out which.