Changes to employment law 2025–2027: What UK employers and HR teams need to do now

UK employment law is going through one of its biggest periods of reform in decades. The Employment Rights Act 2025 is reshaping the employer-worker relationship across sick pay, parental leave, unfair dismissal, zero hours contracts, trade union rights, sexual harassment, collective redundancy and employment enforcement.

Some changes are already in force. Others will arrive in October 2026, January 2027 and later in 2027. For HR professionals, people managers and employers, this is not something to leave until the last minute.

This guide explains the key changes to employment law, what HR teams need to review, and how employers can prepare through better policies, training and people management practice.

Key takeaways

• The Employment Rights Act 2025 is changing UK employment law across 2026 and 2027.
• April 2026 changes include statutory sick pay from day one, removal of the Lower Earnings Limit, day-one paternity leave, day-one unpaid parental leave, the Fair Work Agency, and a higher collective redundancy protective award.
• October 2026 changes include stronger duties around harassment, employment tribunal time limits, tipping rules, trade union measures and public sector outsourcing.
• From 1 January 2027, unfair dismissal rights will change, including a six-month qualifying period and removal of the compensatory award cap.
• Later 2027 reforms include zero hours contracts, guaranteed hours, reasonable notice of shifts, flexible working, non-disclosure agreements, bereavement leave, pregnancy protections, umbrella companies and equality action plans.
• e-Careers can support HR teams and line managers through flexible online HR, CIPD and people management training.

Why UK employment law is changing so quickly

The Employment Rights Act 2025 is the main legislation behind the current wave of employment law reform. It was originally introduced as the Employment Rights Bill before becoming law.

The Government’s Plan to Make Work Pay is the wider policy programme behind many of these reforms. Its aim is to strengthen employment rights, improve job security, modernise enforcement and update the industrial relations framework.

For employers, these reforms affect:

• Contracts
• Staff handbooks
• Sickness policies
• Family leave policies
• Redundancy processes
• Probation reviews
• Flexible working requests
• Zero hours and low hours workers
• Trade union recognition
• Workplace harassment duties
• Non-disclosure agreements
• Holiday pay records
• Equality action plans

This article is designed for HR professionals, HR teams, line managers, business owners and people leaders who need a practical overview of what is changing and what to do next.

The Employment Rights Act 2025: Main themes

The Employment Rights Act 2025 changes several areas of UK employment law. Many reforms are being introduced in phases so employers have time to prepare.

The main themes include:

• Job security and unfair dismissal protections
• Fire and rehire restrictions
• Stronger family-related rights
• Statutory sick pay reform
• Better protection for zero hours and low hours workers
• Stronger trade union rights
• More protection around workplace harassment
• Changes to employment tribunal time limits
• More enforcement through the Fair Work Agency
• Regulation of umbrella companies
• Equality action plans for gender pay gap and menopause support

These changes are just the beginning of a longer period of workplace reform. Employers should expect further details, regulations and guidance as implementation continues.

Employment law timeline: 2025 to 2027

The reforms are being introduced in stages.

Employers should build this timeline into their HR planning, policy reviews and management training.

What changed in April 2026?

Several changes are already in force and should now be reflected in current HR practice.

Statutory sick pay from day one

From 6 April 2026, statutory sick pay (SSP) is paid from the first day of sickness absence. The three-day waiting period has been removed.

The Lower Earnings Limit has also been removed, meaning more employees are eligible for statutory sick pay.

Employers should review:

• Sickness absence policies
• Payroll systems
• HR systems
• Staff handbooks
• Manager guidance
• Return-to-work processes
• Absence reporting templates

This is one of the most immediate employment law changes for payroll, HR and line managers.

Day-one paternity leave and unpaid parental leave

Paternity leave and unpaid parental leave became day-one rights from 6 April 2026.

This means employees no longer need a long service period before becoming eligible for these leave rights. The notice period for paternity leave has also been temporarily reduced.

Employers should update:

• Family leave policies
• Onboarding materials
• Manager guidance
• Workforce planning processes
• HR system leave categories
• Employee communications

These reforms are important for job security, family support and employee wellbeing.

Bereaved partner’s paternity leave

Eligible fathers and partners can take up to 52 weeks of unpaid bereaved partner’s paternity leave if the mother or primary adopter dies within the first year of the child’s life.

This right is separate legislation but sits alongside the wider family-friendly reforms.

Employers should make sure managers understand this sensitive right and know where to seek HR guidance.

Collective redundancy protective award

From 6 April 2026, the maximum protective award for failure to consult properly in a collective redundancy process increased from 90 days’ pay to 180 days’ pay.

This significantly raises the financial risk of getting consultation wrong.

Employers planning redundancies should review:

• Collective consultation procedures
• Redundancy selection criteria
• Consultation notes
• Manager training
• Employee communications
• Legal review processes

The collective redundancy protective award can become costly quickly where large groups of employees are affected.

Whistleblowing protections for sexual harassment

From 6 April 2026, sexual harassment became a qualifying disclosure under whistleblowing law.

This means workers who disclose sexual harassment can receive whistleblowing protection from detriment and unfair dismissal.

Employers should review:

• Whistleblowing policies
• Anti-harassment policies
• Reporting channels
• Investigation procedures
• Manager training
• Confidentiality processes

This reform links closely to wider changes around workplace harassment and the duty to prevent sexual harassment.

Gender pay gap and menopause action plans

From 6 April 2026, employers can voluntarily publish action plans on gender pay gap issues and support employees experiencing menopause.

In 2027, equality action plans will become mandatory for employers with 250 or more workers.

Employers should start preparing now by reviewing:

• Gender pay gap data
• Pay progression patterns
• Promotion data
• Menopause support policies
• Flexible working practices
• Manager awareness
• Employee feedback

This should not be treated as a tick-box exercise. Action plans should show practical steps, ownership and progress.

Holiday pay records

From 6 April 2026, employers must keep records of annual leave and holiday pay. These records must be kept for at least six years.

This is important because the Fair Work Agency will have enforcement powers in areas such as holiday pay.

Employers should check that HR systems, payroll systems and absence records are accurate, accessible and consistent.

The Fair Work Agency

The Fair Work Agency was established on 7 April 2026.

It brings together enforcement activity and will take on responsibility for areas such as:

• Holiday pay
• Statutory sick pay
• National Minimum Wage
• Agency work rules
• Labour exploitation enforcement
• Umbrella company regulation when brought into scope

The Fair Work Agency is intended to uphold workers’ rights and help businesses understand their obligations.

Employers should expect closer scrutiny of records, processes and compliance in the years ahead.

Trade union and industrial action changes

Trade union laws are changing across several phases.

Changes already in force

From 18 February 2026:

• Dismissal for taking part in protected industrial action became automatically unfair.
• The previous 12-week limit for claiming unfair dismissal in this context was removed.
• Industrial action notice requirements were simplified.
• Picket supervisors are no longer required.
• Industrial action mandates now last 12 months rather than six months.
• Some trade union ballot rules were simplified.

Minimum service level rules for strikes were also removed on 18 December 2025.

Employers with unionised workforces should review industrial action procedures and seek advice before taking action against trade union members involved in protected industrial action.

Trade union recognition and representatives

From 6 April 2026, trade union recognition processes were simplified.

Further trade union measures are due in October 2026, including:

• A duty to inform workers of their right to join a trade union
• Stronger trade unions’ right of access
• New rights and protections for trade union representatives
• A right to time off for union equality representatives
• Updated rules on trade union recognition and derecognition
• Protection against detriment for taking part in industrial action

In 2027, further trade union changes are expected, including an updated industrial relations framework and stronger blacklisting protections.

HR teams should prepare managers to engage constructively with trade unions, trade union representatives and trade union equality representatives.

What is changing in October 2026?

October 2026 is another important milestone for UK employment law.

Stronger harassment duties

From October 2026, employers will face stronger duties around harassment.

The changes include:

• Liability for third party harassment, such as harassment by customers or clients, unless the employer has taken all reasonable steps to prevent it
• A stronger duty to take all reasonable steps to prevent sexual harassment

This means employers must do more than keep a policy in a handbook.

Practical steps include:

• Harassment risk assessments
• Regular staff training
• Manager training
• Clear reporting channels
• Prompt investigations
• Consistent disciplinary action
• Guidance on work events and online communication
• Review of customer-facing risk areas

In 2027, further detail is expected on what “reasonable steps” means when preventing sexual harassment.

Employment tribunal time limits

Employment tribunal time limits are expected to increase to six months for most employment tribunal claims no earlier than October 2026.

Breach of contract claims are expected to remain at three months.

This means employers may face a longer period of risk after workplace disputes. HR teams should improve record-keeping, investigation notes, performance documentation and manager decision records.

Tipping rules

Tipping law will change in October 2026.

Employers will need to:

• Consult workers or representatives before creating a tipping policy
• Update tipping policies every three years
• Keep clear records of consultation and distribution

This is particularly relevant for hospitality, leisure and customer-facing businesses.

Public sector outsourcing

New measures on public sector outsourcing are expected in October 2026. These are intended to avoid different terms and conditions for ex-public sector employees and private sector employees working on outsourced contracts.

Employers involved in public sector outsourcing should review procurement, contract management and workforce planning arrangements.

Adult social care negotiating body

A new Adult Social Care Negotiating Body is expected in October 2026.

This is part of the wider move towards stronger collective bargaining and fair pay arrangements in adult social care.

Employers in the sector should monitor further details and prepare for changes to pay, consultation and workforce planning.

Unfair dismissal changes from January 2027

Unfair dismissal protections will change from 1 January 2027.

Six-month qualifying period

From 1 January 2027, protection from unfair dismissal will apply after six months of employment. Currently, most employees need two years of service before they can claim unfair dismissal.

The Government had originally considered day-one unfair dismissal rights, but the final position is a six-month qualifying period.

This is still a major change. Employers will need stronger probation processes and better documentation from the start of employment.

Compensation cap removed

From 1 January 2027, the limit on the compensatory award for unfair dismissal will be removed.

This increases potential financial exposure, especially where employees can show significant loss.

Employers should review:

• Probation review processes
• Performance management procedures
• Disciplinary procedures
• Dismissal decision-making
• Manager training
• Documentation standards

Fire and rehire protections

From 1 January 2027, dismissal and rehire on worse terms will become automatically unfair in most cases.

This is sometimes known as fire and rehire.

Employers will need to show that they have followed a fair process and considered reasonable alternatives. Further guidance and an updated code of practice are expected.

HR teams should review contract variation processes during 2026, especially where changes to pay, hours, holiday, pensions or working arrangements may be needed.

Zero hours and low hours contracts

Zero hours contracts are not being banned, but they are being significantly reformed.

In 2027, workers on zero hours and low hours contracts will gain new protections.

Guaranteed hours

Workers on zero hours and low hours contracts will have the right to guaranteed working hours if they want them.

This is expected to apply where workers have worked regular hours over a reference period. Employers will need to monitor working patterns carefully and offer guaranteed hours where required.

Reasonable notice of shifts

Employers will need to provide reasonable notice of shifts and changes to shifts.

This will affect scheduling, rota planning and workforce management in sectors such as retail, hospitality, logistics, social care and healthcare.

Short notice shift changes and cancellations

Workers will have the right to be paid if a shift is cancelled, moved to another date or cut short at short notice.

Employers should review:

• Rota systems
• Shift cancellation processes
• Payroll rules
• Worker communications
• Workforce planning
• Use of agency workers
• Low hours contracts

Agency workers and umbrella companies

The reforms are also expected to affect agency workers and umbrella companies.

In 2027, the definition of agencies will be expanded to include umbrella companies, allowing enforcement by relevant bodies.

Employers using agency workers, labour suppliers or umbrella companies should audit their supply chains and check contracts, pay practices and compliance responsibilities.

Flexible working changes

Flexible working changed in 2024 when the right to request flexible working became a day-one right. Further amendments are expected in 2027.

If an employer refuses a flexible working request for a genuine business reason, they will need to:

• State the reason from the accepted list of reasons
• Explain why they believe the refusal is reasonable

This makes the quality of decision-making more important.

Employers should review:

• Flexible working policies
• Manager guidance
• Decision templates
• Appeal processes
• Record-keeping
• Equality risks

Flexible working requests should be handled consistently and fairly.

Non-disclosure agreements and workplace harassment

In 2027, changes to non-disclosure agreements will void clauses that prevent workers from alleging or disclosing work-related harassment or discrimination.

Employers should review:

• Settlement agreement templates
• Employment contracts
• Confidentiality clauses
• Investigation procedures
• Bullying and harassment policies
• Manager guidance

Non-disclosure agreements can still have a legitimate place, but they should not be misused to silence workers who want to report harassment, discrimination or wrongdoing.

Pregnancy, maternity and bereavement protections

Several further family-related protections are expected in 2027.

Pregnancy and maternity protections

The Employment Rights Act 2025 will strengthen dismissal protections for pregnant workers and those returning from maternity leave.

Employers should review redundancy, restructuring and performance processes to make sure pregnant workers and returning parents are treated lawfully and fairly.

Bereavement leave

A new right to statutory bereavement leave will be introduced in 2027.

Further details are expected, but employers should start thinking about compassionate leave policies, manager guidance and support for employees experiencing bereavement.

Gender pay gap and menopause action plans

From 2027, mandatory action plans around gender pay gaps and menopause support will apply to employers with 250 or more workers.

These plans should set out practical steps to:

• Reduce gender pay gaps
• Improve progression
• Support employees experiencing menopause
• Improve workplace culture
• Strengthen equality and inclusion
• Track progress over time

HR teams should link action plans to employee engagement, absence data, flexible working, pay progression and leadership development.

Practical steps for employers and HR teams

These reforms affect almost every part of employment practice.

A practical preparation plan should include the following steps.

Create an employment law roadmap

Map the key dates across:

• February 2026
• April 2026
• August 2026
• October 2026
• January 2027
• Later 2027

Assign owners for each reform and set review dates.

Review HR policies and contracts

Review:

• Contracts
• Staff handbooks
• Sickness policies
• Family leave policies
• Flexible working policies
• Harassment policies
• Whistleblowing policies
• Redundancy procedures
• Disciplinary and grievance procedures
• Zero hours agreements
• NDA templates
• Trade union procedures
• Holiday pay records

Train line managers

Line managers will play a major role in implementation.

Training should cover:

• Statutory sick pay
• Paternity leave
• Unpaid parental leave
• Flexible working requests
• Harassment prevention
• Sexual harassment duties
• Employee relations
• Performance management
• Probation reviews
• Unfair dismissal
• Redundancy consultation
• Trade union activity
• Zero hours scheduling

Managers need to know when to act and when to involve HR.

Improve record-keeping

Better records will be essential.

Review how you record:

• Sickness absence
• Holiday pay
• Annual leave
• Probation meetings
• Performance concerns
• Flexible working requests
• Harassment complaints
• Investigation notes
• Consultation meetings
• Redundancy decisions
• Shift patterns
• Cancelled shifts
• Trade union communications

Stronger documentation can reduce risk if employment tribunal claims arise.

Audit zero hours and low hours arrangements

Employers using zero hours contracts or low hours workers should review:

• Regular working patterns
• Shift notice periods
• Cancellation processes
• Payroll impact
• Guaranteed hours risk
• Worker communications
• Agency worker use
• Umbrella company arrangements

This is especially important for employers in hospitality, retail, logistics, healthcare and social care.

Review harassment prevention

Employers should take reasonable steps now and prepare for all reasonable steps duties.

Practical actions include:

• Updating policies
• Running training
• Assessing harassment risk
• Reviewing third party risks
• Improving reporting routes
• Training managers
• Recording complaints
• Acting consistently
• Reviewing workplace culture

Employers should not wait until a claim is made before taking action.

Strengthen employee communication

Employees will need clear information about their employment rights.

Employers should plan communications on:

• Sick pay
• Family leave
• Flexible working
• Trade union rights
• Harassment reporting
• Zero hours rights
• Bereavement leave
• Workplace policies

Clear communication helps build trust and reduces confusion.

How e-Careers can support employers and HR teams

e-Careers supports HR professionals, line managers and employers through flexible online training.

Our human resources courses and CIPD courses can help learners build knowledge in employment law, employee relations, people management, HR processes and organisational practice.

Relevant routes include:

• CIPD Level 3 Foundation Certificate in People Practice
• CIPD Level 5 Associate Diploma in People Management
• CIPD Level 5 Associate Diploma in Organisational Learning and Development
• CIPD Level 7 Advanced Diploma in Strategic People Management
• CIPD Level 7 Advanced Diploma in Strategic Learning and Development

Learners benefit from:

• Flexible online study
• 24/7 access to an industry-leading eLearning platform
• Interactive course content
• Tutor videos, animations and knowledge checks
• Assessment checklists and assignment tips
• Unlimited expert tutor support through the platform
• Optional live online classes
• Recorded sessions for catch-up learning
• Kogan Page Library access
• Additional tutor-uploaded resources
• Forums to connect with other CIPD students
• Interest-free payment options
• Price-match guarantee

For employers, structured HR and people management training can help build confidence across HR teams and line managers as the legal framework changes.

Final thoughts

The changes to employment law from 2025 to 2027 affect almost every employer. Some reforms are already in force, while others will arrive in October 2026, January 2027 and later in 2027.

The safest approach is to prepare early. Review your policies, strengthen manager training, improve record-keeping and make sure employees understand their rights.

For HR teams, this is a major compliance challenge, but also an opportunity to improve workplace culture, employee trust and people management practice.

Explore our human resources courses and CIPD courses to support your team through the next phase of UK employment law change.

Frequently Asked Questions