In this article, Simon Thomas, Partner specialising in employment law, looks at the new Employment Rights Act and what it means for employers and employees.
The workplace is undergoing one of its most significant legal reforms in a generation. Following Royal Assent in December 2025, the new Employment Rights Act introduces wide-ranging changes designed to modernise employment law and strengthen protections for workers while providing greater clarity for businesses.
With more than 15 million workers expected to benefit, both employers and employees should begin preparing now — particularly as the changes will be introduced gradually over the next two years.
The Government has positioned the Act as a move to bring employment law “into the 21st century”, balancing stronger worker protections with support for responsible businesses.
The reforms focus on three core aims:
- Improving job security and fairness at work
- Supporting working families
- Encouraging productivity and long-term economic growth
For employers, this means reviewing workplace policies sooner rather than later. For employees, it signals enhanced rights from much earlier in their employment.
Below, we outline the key developments and what they mean in practice:
- New “day one” rights
One of the most notable changes is the expansion of rights available from the start of employment.
Employees will now benefit from:
- Day one entitlement to paternity leave
- Day one entitlement to unpaid parental leave
- A new right to bereavement leave
This removes previous qualifying periods and aims to give families greater flexibility during important life events.
What this means for employers: Recruitment, onboarding processes and HR policies will need updating to reflect immediate eligibility for these rights.
- Statutory sick pay reform
The Act strengthens Statutory Sick Pay by removing the lower earnings limit and expanding eligibility. This is expected to help around 1.3 million lower-paid workers who previously did not qualify.
Practical impact: Employees can take necessary sick leave without facing immediate financial hardship, while employers may see improved staff wellbeing and retention — but should prepare for potential cost and absence management implications.
- Increased protection from unfair dismissal
Previously, employees generally required two years’ service before qualifying for protection against unfair dismissal.
Under the new law, this protection will apply after six months of employment.
What this means for employers: Probationary periods, performance management procedures, and dismissal processes must be carefully managed and properly documented from an earlier stage.
- Stronger protections for pregnant employees and new parents
The legislation introduces enhanced safeguards against dismissal for pregnant workers and new mothers. This reflects a growing emphasis on workplace equality and family protection.
Key takeaway: Employers should ensure managers are trained to handle maternity-related issues lawfully and sensitively to reduce the risk of claims.
- Changes to zero-hours contracts
With over one million workers currently on zero-hours arrangements, the Act seeks to tackle what it describes as “exploitative” practices.
New protections include:
- The right to a contract reflecting regular working hours
- Compensation for shifts cancelled at short notice
What this means for employers: Businesses relying on flexible staffing models should review contracts and workforce planning strategies now.
- Action against “Fire and Rehire”
The Act also aims to restrict unfair “fire and rehire” or “fire and replace” practices, signalling a stronger expectation of meaningful consultation with staff during contractual changes.
- Creation of a Fair Work Agency
A new enforcement body — the Fair Work Agency — will oversee compliance with employment rights, suggesting increased scrutiny and enforcement in the future.
What this means for employers: While some employers may initially view the reforms as regulatory expansion, the Government and business leaders supporting the Act argue that clearer rights can improve workplace stability.
In practice, well-prepared employers may find the reforms level the playing field by ensuring fair competition among businesses.
What should employers do now?
Although implementation will be phased over two years, preparation should begin immediately. Employers should consider:
- Reviewing employment contracts and staff handbooks
- Updating sickness, family leave and dismissal procedures
- Training managers on new legal obligations
- Auditing the use of zero-hours or flexible contracts
- Seeking legal advice before making structural workforce changes
Early planning can significantly reduce legal risk once the reforms come fully into force.
Employers who stay informed — and act early — will be best placed to adapt successfully.
If you would like advice on how these changes may affect your business or employment rights, or would like help reviewing your contracts, the employment law team at Hutchinson Thomas Solicitors can provide practical, tailored guidance. Contact us on 01639 645 061 or click here.