Employment Rights Act 2025. FAQs

The Employment Rights Bill received royal assent and officially became law on 18 December 2025. It is now following its passage through parliament. With many changes coming into force in the months and years ahead, in this article, we’ve answered some of your most frequently asked questions about the new Act and how it may affect you:

When does the Employment Rights Act 2025 come into force?

The Act received Royal Assent on 16 December 2025, but most of its provisions will not take effect immediately. Many of the changes require secondary legislation and further consultation. Implementation will therefore be phased, with different measures expected to come into force between April 2026 and 2027.

Does the Act apply to all UK employers?

The Act applies to employers in England, Scotland and Wales. It does not apply in Northern Ireland, where employment law is devolved. However, employers operating across multiple UK jurisdictions will need to consider how to manage differing regimes.

What is the new qualifying period for unfair dismissal?

The qualifying period for ordinary unfair dismissal will reduce from two years to six months’ continuous service. This change is expected to take effect from 1 January 2027. From that date, many more employees will be able to bring unfair dismissal claims.

Is the cap on unfair dismissal compensation really being removed?

Yes. The Act removes both the 52-week pay cap and the statutory maximum cap on compensatory awards for unfair dismissal. Although the detail will be confirmed through secondary legislation, this represents a significant increase in potential financial exposure for employers once the change comes into force, likely from January 2027.

Does the Act ban “fire and rehire”?

The Act does not use the language of an outright ban, but in practice, it severely restricts the use of dismissal to impose changes to key contractual terms. Dismissals for this purpose will generally be automatically unfair unless the employer can demonstrate that the changes were unavoidable due to genuine financial difficulties threatening the business’s survival.

Can employers still make redundancies?

Yes. Genuine redundancies remain lawful. The new restrictions are aimed at dismissals used to force through changes to terms and conditions, not at dismissals arising from a genuine reduction in work or business closure. TUPE-related dismissals are also excluded from the new fire and rehire rules.

Will zero-hour contracts be banned?

No. Zero-hour contracts are not banned. However, employers will be required to offer qualifying zero or low-hours workers a contract reflecting the hours they regularly work over a defined reference period. This is likely to significantly reduce the use of zero-hour arrangements in practice once the new rules come into force, expected in 2027.

Do the new zero-hour rules apply to agency workers?

Yes. Following consultation, the guaranteed hours and shift predictability rights are expected to apply to agency workers as well as directly engaged workers. The precise detail will be set out in regulations.

What is changing about flexible working requests?

Employers will still be able to refuse flexible working requests for the existing statutory business reasons. However, refusals must be reasonable in the circumstances, clearly explained, and preceded by consultation with the employee. Employers should review their policies and ensure managers are trained to handle requests properly.

What are equality action plans and who must publish them?

Employers with 250 or more employees will be required to publish equality action plans, including gender pay gap action plans. The Government also intends to require reporting on ethnicity and disability pay gaps. These requirements may be introduced voluntarily from April 2026, before becoming mandatory in 2027.

What new duties do employers have around harassment?

Employers will be required to take all reasonable steps to prevent harassment in the workplace, including harassment by third parties such as customers or clients. Failure to do so may result in liability. These measures are expected to take effect in October 2026.

Are non-disclosure agreements now banned?

The Act makes confidentiality provisions void where they seek to prevent workers from making allegations or disclosures about harassment or discrimination, including how the employer responded. Limited exceptions may be introduced by regulation, but the timing and scope of these provisions are not yet clear.

Has the time limit for bringing tribunal claims changed?

Yes. The standard time limit for bringing Employment Tribunal claims will increase from three months to six months. This applies to all claims, including unfair dismissal and discrimination, and is expected to take effect from October 2026.

What is the Fair Work Agency?

The Fair Work Agency is a new enforcement body that will bring together the functions of several existing agencies. It will have wide powers to enforce employment rights, including statutory sick pay, holiday pay, national minimum wage and unpaid tribunal awards, and to impose penalties for non-compliance.

What new family-related rights does the Act introduce?

The Act expands day one rights, including paternity leave, unpaid parental leave and statutory sick pay. It also introduces a new right to bereavement leave, including for pregnancy loss before 24 weeks, subject to further consultation and regulations.

What should employers be doing now?

Although many changes will not take effect immediately, employers should start preparing by reviewing contracts, policies and consultation processes, training managers, and monitoring the progress of secondary legislation. Early planning will be key to managing risk and maintaining compliance.

If you need advice in respect of any of the above, please contact Nighat Sahi and our employment team.

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