The Employment Rights Act 2025 received Royal Assent on 18 December 2025, completing the passage of the government's main package of workplace reforms. The Department for Business and Trade said more than 15 million workers will benefit, and that the changes will be phased in over a two-year period.
Corporate INTL Newsroom · Employment & Labour
Employment Rights Act 2025 Receives Royal Assent: What Employers Need to Know
By The Corporate INTL Newsroom · 19 December 2025
Key changes
- Unfair dismissal: the qualifying period will fall from two years to six months of employment. Under the compromise announced on 27 November 2025, the qualifying period can only be changed by primary legislation in future, and the cap on compensation will be lifted.
- Family leave: day-one rights to paternity leave and unpaid parental leave, which the government says will allow 32,000 more fathers and partners a year to take paternity leave and 1.5 million more parents to take unpaid parental leave.
- Sick pay: reforms to statutory sick pay that could cover up to 1.3 million low-paid employees.
- Bereavement: a new entitlement to bereavement leave that could apply to up to 2.7 million employees a year.
- Zero-hours contracts: a right to a contract reflecting the hours actually worked and compensation for shifts cancelled at short notice.
- Other measures: an end to fire and rehire practices, stronger collective redundancy rights, enhanced protection against dismissal for pregnant workers and new mothers, and a new Fair Work Agency.
When the changes apply
The government has said day-one rights to statutory sick pay and paternity leave will arrive in April 2026, when the Fair Work Agency will also launch. Other measures will follow through secondary legislation, and the government has committed to consult transparently on that legislation and to support small businesses. Day-one protection against discrimination and automatically unfair dismissal remains in place.
What employers should do
The Employment Rights Act 2025 will affect recruitment, probation, scheduling and dismissal processes. Employers should review contracts for workers on variable hours, update policies on family leave and sick pay, check that probation reviews are completed within six months and prepare managers for the changes to dismissal and redundancy procedures as each commencement date is confirmed.
Sources
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