Employment Rights Act receives Royal Assent

The Employment Rights Bill has now passed into law, having received Royal Assent on 18 December 2025. This formal approval by the King confirms the Bill as an Act of Parliament, known as the Employment Rights Act 2025.

The Act introduces a series of changes to existing employment legislation, including amendments to the Employment Rights Act 1996.

The reforms will not take effect all at once. Instead, the new Employment Rights Act will be introduced in stages over a two-year period, with most changes expected to come into force during 2026 and 2027.

1. Expanded worker rights and employer duties

The new Act introduces a broad range of enhanced protections for employees, many of which place additional legal duties on employers:

Unfair dismissal: lower thresholds & greater exposure

One of the headline changes is a reduction in the qualifying period for unfair dismissal claims from two years’ service to six months. This means more employees will be eligible to bring claims, increasing employers’ exposure to litigation.

The Government previously considered further reducing this to ‘day one’ protection, but compromised on the six-month period to secure parliamentary passage.

Businesses should expect:

• Increase in tribunal claims
• Higher potential liabilities
• A need to tighten probationary dismissal practices and documentation

Guaranteed hours & zero-hours contracts

The Act introduces new statutory protections for workers on casual or zero-hours contracts.

Employers will be required to offer guaranteed hours where a regular working pattern has emerged, reducing reliance on indefinite flexibility.

While intended to improve job security, this change may bring operational and cost challenges, particularly for sectors dependent on flexible staffing arrangements. It may also prove unhelpful for casual workers in practice with employers taking steps to avoid the establishment of regular working patterns.

Flexible working, family leave, and pay protections

Employers will face expanded rights and duties in several areas, including:

• Flexible working requests
• Expanded day-one rights to certain family leave entitlements
• Enhanced statutory sick pay provisions

These reforms are designed to modernise work/life balance and align statutory rights with contemporary workforce expectations, but require policy updates, management training and payroll readiness.

2. Industrial relations and union rights

The Act makes significant changes to trade union and industrial action law, including

• Repealing much of the 2016 Trade Union Act
• Abolishing rules on minimum service levels during strikes

These changes are likely to have a substantial impact on larger employers and unionised sectors, including:

• Easier union organisation and recognition including union access to workplaces
• Stronger legal protections for workers taking industrial action

Employers should review collective bargaining arrangements and operational risk exposure arising from these reforms.

3. Harassment, equality and workplace culture

The reforms also strengthen employer duties  concerning workplace harassment, discrimination and equality. Statutory protections are extended, and new compliance expectations introduced, requiring employers to focus on:

• Updating harassment and discrimination policies
• Enhanced training for managers and staff
• Robust reporting systems and documented risk mitigation procedures

4. What businesses should do now

Employers should begin preparing for implementation by:

• Auditing policies and contracts – Reviewing employment contracts, dismissal procedures, flexible working policies and contractual rights to ensure compliance with forthcoming statutory obligations.
• Training managers and HR teams – Ensuring decision-makers understand new unfair dismissal thresholds, expanded leave rights and evolving discrimination duties.
• Scenario planning and communication – Preparing for staffing, scheduling and industrial relations scenarios to minimise disruption and maintain workforce confidence.

The Employment Rights Act represents a transformational shift in the UK labour market. While it strengthens worker protections, it also raises the compliance bar for employers.

If you would like support interpreting these changes or preparing your business for implementation, our employment law team can provide practical, tailored advice and training packages.

Meredith Hurst