Employment Rights Act 2025: Law Specialists Support

Finally becoming law at the end of 2025, the ERA is a fundamental and transformational piece of legislation that has brought major reforms to the employment sphere, affecting both employers and employees. It arguably represents the biggest shift in employment law and rights, since the last Employment Rights Act, in 1996.  Many of the ERA’s provisions will be phased in throughout 2026 and 2027. However, some provisions have already taken effect, in February 2026 relating to trade union strike notices and enrolment into a political fund.

As a major shake-up to employment legislation, it comes as no surprise that the ERA will affect all businesses across the UK. There is no general exemption for small employers, though some of the equality reporting requirements only apply to large employers (as is the case now). Some key business areas that will be affected are:

• HR & Management. Contracts and polices will need to be amended to reflect the wide-ranging changes. Such updated policies and practices will need to be legally compliant when enforced.
• Restructuring, Redundancy, and Dismissals. Legislation changes surrounding unfair dismissal and ‘fire and rehire’ will mean businesses must amend the way they operate to remain legally compliant.
• Trade Union rights. The changes give trade unions greater rights of access and simplify the processes for industrial action and formal recognition. Businesses therefore need to be prepared for greater engagement with trade unions within their workplaces.
• Flexible working. Changes to rights for zero hours workers, flexible working and family related rights mean many businesses will need to be more adaptable.

Employers will need to review their employment contracts, staff handbooks and HR polices to ensure they incorporate appropriate levels of flexibility, to future proof them given the restrictions around fire and rehire, but also to reflect some necessary changes to remain compliant. Employers should prepare by mapping the ERA’s phased implementation to help understand what changes are coming into force and when. For example, employers should already be planning contract changes ahead of April 2026, which introduces changes to SSP, paternity & parental leave. Employees, on the other hand, should familiarise themselves with the ERA to understand how this new legislation will alter their rights and ensure such rights are reflected in the necessary employment documents.

Before a piece of legislation is approved by both Houses of Parliament and given Royal Assent (signed by the King), it is known as a Bill. After it receives Royal Assent, it becomes an Act, at which point, it becomes the law, subject to any specific provisions setting out implementation dates.

The Employment Rights Bill was subject to much scrutiny, falling  back and forth between the House of Parliament and the House of Lords, undergoing a lengthy parliamentary process which saw a number of changes proposed and adopted. Perhaps one of the most significant changes from the original Bill was the late amendment to the proposals around unfair dismissal, introducing a blanket 6 month qualifying service requirement and removing the current cap on compensation.

Finally, the Employment Rights Act 2025 received Royal Assent on 18 December 2025 and thereby became law.