The Employment Rights Act 2025 (ERA) received Royal Assent on 18 December 2025 and is set to bring about the biggest change to rights in the workplace in decades.
The changes in the ERA are set to come into force gradually, with some coming into force in April 2026, some in October 2026 and some in 2027. Below we have set out the main changes set to come into force in April 2026 and some of the most fundamental changes to be aware of going into 2027.
Family Leave: Day‑one Paternity and Unpaid Parental leave
Currently employees must have been employed for one year to be eligible to take unpaid parental leave and employed for 26 weeks (assessed 15 weeks before the expected birth week) to be eligible to take paternity leave.
From April 2026, employees will gain a day‑one right to paternity leave and unpaid parental leave. The ERA is not changing the eligibility requirements for paternity pay so this means there will still not be a day-one right to paternity pay.
The rules around the taking of paternity leave will also be changed so that partners are able to take paternity leave after shared parental leave.
Statutory Sick Pay (SSP): Day‑one Entitlement and Widened Coverage
As it stands, SSP is only payable from the fourth day of sickness and employees must be earning the Lower Earnings Limit, which is currently £125 per week.
From April 2026, SSP will become payable from day one of sickness, not day four. The Lower Earnings Limit requirement will also be removed, extending entitlement to lower‑paid staff. This change is thought to mean that up to 1.3 million low-paid employees will now be eligible for SSP. The SSP amount will become the lower of the prescribed rate (currently £118.75) or 80% of the employee’s weekly earnings.
Collective Redundancy Consultation and Protective Awards: Widened Obligations and Increased Penalties
Employers currently must engage in collective consultation if redundancy proposals include 20 or more redundancies at “one establishment” within a 90-day period, which is typically one workplace site. As it stands, the penalty for breach of the collective consultation obligation is a maximum of 90 days’ actual pay per affected employee. The ERA will increase the maximum for this award from 90 to 180 days’ gross pay.
It will also broaden the scope of when collective consultation obligations will be triggered. There will be a new threshold test for the number of proposed redundancies across the business. We do not know at present what this threshold test will be as this will be set out in legislative regulations, which have not yet been published.
Gender Pay Gap Action Plans and Menopause Support
Currently, employers with more than 250 employees must publish annual gender pay gap reports but employers are not required to publish actions plans outlining steps to address the gender pay gap. As it stands, approximately only half of reporting employers currently publish such plans.
Employers with more than 250 employees will be encouraged to publish gender pay gap action plans (including how they support workers experiencing menopause) on a voluntary basis from April 2026. The creation and publication of action plans will then become mandatory in 2027.
Pregnancy and Maternity Leave: Strengthened Protections
Since April 2024 pregnant employees have had the right to be offered suitable alternative employment (where available) from the point they inform their employer of their pregnancy. This protection also applies for up to 18 months post the birth of the child.
From 2027 it will become unlawful to dismiss a pregnant employee or an employee returning from maternity leave within 6 months of their return, except in limited circumstances (such as gross misconduct or illegality). This enhanced right will apply to any dismissal, rather than just redundancy. The Government launched a consultation in October 2025 on what the limited circumstances would cover and we await the outcome of this consultation, which has very recently closed.
Bereavement Leave: Extended Protection
The current position, introduced in April 2020, is that only employees who experience the loss of a child under the age of 18 or a still birth after 24 weeks of pregnancy are entitled to bereavement leave. Employees who meet the criteria to be entitled to this parental bereavement leave are entitled to two weeks of leave and statutory pay.
From 2027 bereavement leave will be extended to cover early pregnancy loss before 24 weeks which will include losses resulting from miscarriage, ectopic pregnancy and unsuccessful embryo transfer during IVF treatment. Mothers and their partners who experience loss will be entitled to one week of unpaid leave.
The ERA also gives the Government power to introduce a day-one right to at least one week of bereavement leave for employees where they lose a dependant. Regulations will specify the definition of dependant.
Flexible Working: Employers’ decisions have to be reasonable
From April 2024, employees have had the right to make a statutory flexible working request from day one of employment. They are entitled to make two requests in any 12-month period. Employers are currently required to consult with an employee before making a decision on the request. They can only reject the request for one or more of the eight statutory grounds for refusal but that test is a subjective one – if the employer considers the ground is met, then it is satisfied.
From 2027, employers will not be allowed to refuse a request unless they explain their reasons and it is reasonable for them to refuse on the basis of those reasons. The existing eight statutory grounds for refusal will remain the same but the introduction of the employer’s decision needing to be reasonable is new and will make it more difficult for an employer to refuse a request for flexible working.
Unfair Dismissal: 2 years’ eligibility requirement decreased to 6 months and removal of compensation cap
Currently only employees who have been continuously employed for two years or more can claim ordinary unfair dismissal. The qualifying period for unfair dismissal will be reduced to 6 months. Employees who have been continuously employed for six months on 1 January 2027 will therefore immediately gain unfair dismissal protection, which is a major change to employment law.
The compensation cap for an ordinary unfair dismissal is currently the lower of 52-weeks’ pay or the statutory cap of £118,223 (which changes each year). The compensation cap on unfair dismissal is being completely removed, which is also another significant change.
Zero Hours Contracts
From 2027 employers will have to offer zero hours/ ‘low’ hours workers (and agency workers) contracts of guaranteed hours, reflecting workers’ regular working patterns over a reference period. Employers will also have to give workers reasonable notice of shifts. Workers will be entitled to compensation if employers cancel their shift or move their shift without reasonable notice.
How We can Help
If you require any advice in relation to how to prepare for the implementation of the ERA, please contact a member of our team employment@wslaw.co.uk.