Employment Rights Act 2025: What Employers Need to Prepare for in 2026 and 2027

The Employment Rights Act 2025 brings significant changes to employment rights across Great Britain, but the reforms are not arriving all at once.

Implementation is being phased throughout 2026 and 2027. Some important changes are already in force, with further measures taking effect from 1 October 2026, 30 October 2026 and 1 January 2027. Future implementation dates remain subject to parliamentary processes and may change.

For SME employers, the challenge is not simply understanding what's changing. It is knowing what action to take, what documentation to review and when your business needs to be ready.

Here are some of the key changes employers should have on their radar.

What Has Already Changed in 2026?

Several significant employment law changes took effect earlier this year.

Statutory Sick Pay

From April 2026, more employees became eligible for Statutory Sick Pay (SSP). The lower earnings threshold and three waiting days were removed, meaning eligible employees can receive SSP from the first day of sickness absence.

Employers should already have reviewed their sickness absence procedures, payroll arrangements and relevant policies to make sure these changes have been reflected.

Day One Family Leave Rights

Paternity Leave and Unpaid Parental Leave also became day-one employment rights in April 2026, removing previous qualifying service requirements. Statutory Paternity Pay still needs 26 weeks' service, so a new starter can take paternity leave from day one but may not be entitled to statutory pay.

If your contracts, employee handbook or family leave policies still refer to the previous service requirements, they should be reviewed.

Other April Changes

Other changes introduced in April included stronger collective redundancy protections, enhanced whistleblowing protections relating to sexual harassment, new holiday pay record keeping requirements and the establishment of the Fair Work Agency.

For employers, this reinforces the importance of ensuring HR documentation and record keeping keep pace with legislative changes.

1 October 2026: Employment Tribunal Time Limits

Another important change takes effect from 1 October 2026.

The time limit for bringing the majority of Employment Tribunal claims will increase from three months to six months. The longer limit applies only where the act complained of (for a dismissal, the termination date) falls on or after 1 October 2026, so earlier events keep the 3 month limit. Breach of contract claims in Scotland move to six months separately, from 9 November 2026.

For employers, that makes good HR processes and comprehensive record keeping even more important.

Documents relating to grievances, disciplinary matters, performance management, absence, investigations and dismissals should be appropriately maintained so that the business can demonstrate the decisions and processes followed if a dispute arises.

30 October 2026: Harassment Protections

One of the most significant October changes relates to workplace harassment.

Preventing Sexual Harassment

From 30 October 2026, employers will be required to ”take all reasonable steps” to prevent sexual harassment of their employees.

This moves the focus firmly towards prevention.

For employers, simply having an anti-harassment policy sitting in a handbook may not be enough. Businesses should consider whether their approach is effective in practice, including whether managers understand their responsibilities, employees know how to raise concerns and appropriate preventative measures are in place.

Third Party Harassment

Employers will also have new obligations concerning harassment of employees by third parties. This could include people employees interact with through their work, such as customers, clients or suppliers. Unlike the sexual harassment duty, this covers harassment related to any relevant protected characteristic, not only sexual harassment.

For SMEs, this is a good time to consider where potential risks may arise within the particular working environment and whether existing policies, reporting procedures and manager training remain appropriate.

30 October 2026: Trade Union Changes

There are also important trade union reforms taking effect.

Employers will have a new duty to provide workers with a written statement informing them of their right to join a trade union, with detailed requirements being set through secondary legislation (EDIT - pushed back to January 2027)

Independent trade unions will also receive new rights to request access to workplaces and engage with workers, physically or digitally, under the new statutory framework. Different provisions apply depending on the employer's circumstances and workforce size. For example, the Central Arbitration Committee can only impose an access agreement on employers with 21 or more workers.

Employers should therefore keep an eye on the latest guidance as the implementation date approaches.

1 January 2027: A Major Change to Unfair Dismissal

For many SME employers, 1 January 2027 will be one of the most important dates to prepare for.

6 Month Qualifying Period

From 1 January 2027, the qualifying period for protection against ordinary unfair dismissal will reduce from 2 years to 6 months. Employees who already have 6 months' service on that date will be protected immediately.

This has significant implications for how businesses manage:

• Recruitment;

• Probationary periods;

• Performance;

• Conduct;

• Manager decision making;

• Dismissal procedures;

• Employment documentation.

The change does not mean employers cannot dismiss someone after 6 months. Employers will continue to be able to dismiss employees for legitimate reasons, but where unfair dismissal protection applies, the reason and process followed will need to be fair.

Existing day 1 protections, including discrimination and automatically unfair reasons for dismissal also remain.

Don't Wait Until Month 6

This is where I would encourage SMEs to think practically.

If an employee is struggling during their probationary period, managers need to address concerns early rather than allowing issues to drift.

Expectations should be clear, performance conversations should take place at the appropriate time, and important decisions should be properly documented.

If your business currently uses a 6 month probationary period, now is a particularly good time to review how that process will operate once the new 6 month unfair dismissal qualifying period takes effect. Official employer guidance specifically recommends considering how contractual probation periods will operate alongside the new qualifying period.  Take care with decisions close to the 6 month point: the statutory minimum notice period can be added when working out whether an employee has qualifying service, so waiting until the final week of probation may be too late.

Unfair Dismissal Compensation

The existing cap on the compensatory award for unfair dismissal (currently the lower of one year's gross pay and £123,543) will also be removed from 1 January 2027, although compensation will continue to be calculated on the basis of actual and projected losses evidenced by the claimant.

This makes effective management practices and fair procedures even more important.

What Should Employers Do Now?

The Employment Rights Act should not be treated as something to address only when each new deadline arrives.

A structured review now gives businesses time to make changes properly.

I recommend focusing on five areas:

1. Review Your Contracts

Check whether your employment documentation reflects current rights and consider how probationary arrangements will operate alongside the six-month unfair dismissal qualifying period. From 30 October 2026, new workers will also need a written statement of their right to join a trade union alongside their written statement of employment particulars.

2. Update Your HR Policies

Review policies covering:

•           Sickness absence

•           Family leaves

•           Grievance and disciplinary procedures (the Acas Code of Practice is also being revised)

•           Sexual harassment

•           Third party harassment

•           Performance and probation

•           Dismissal

3. Review Record Keeping

Make sure important HR decisions and processes are appropriately documented.

With tribunal claim time limits increasing, good records become even more important.

4. Review Your Approach to Harassment Prevention

Don't wait until 30 October to consider what “take all reasonable steps” means in practice for your workplace.

Review potential risks, reporting mechanisms, policies and training.

5. Prepare Your Managers

Managers are often the people putting HR policies into practice.

They need to understand how to deal with performance, absence, grievances, conduct concerns and workplace issues appropriately and consistently.

The reduction in the unfair dismissal qualifying period makes early and effective people management increasingly important.

Don't Wait for Each Deadline to Arrive

For SMEs, keeping up with major employment law reform while also running the business can feel overwhelming.

The good news is that preparation does not have to mean changing everything at once.

The starting point is understanding what has already changed, what's coming next, what affects your business and what action should be prioritised.

At ABZN Consultancy, I provide practical, commercially focused HR support to help SMEs understand employment changes and translate them into workable policies, processes and management practices.

Is Your Business Ready for the Next Employment Rights Act Changes?

If you're unsure whether your contracts, policies and HR processes are ready for the October 2026 and January 2027 changes, now is the time to review them.

Book an Employment Rights Act Compliance Readiness Review to identify potential gaps and establish clear priorities for your business.

Protecting Businesses. Supporting People. Enabling Growth.

This article provides general HR information and is not legal advice. Employment law and implementation dates may change. Businesses should refer to the latest official guidance relevant to their individual circumstances. Information is correct as at 29 September 2026.