ERA 2025: What You Need to Know
What is already in force, what is still coming, and what your handbook needs to say
Legal UpdateWhat is the Employment Rights Act 2025?
The Employment Rights Act 2025 received Royal Assent in December 2025, marking the most significant update to UK employment law in decades. The reforms are arriving in stages over 2026–2027: the first wave took effect in April 2026 and is already current law, with further waves landing in October 2026 and January 2027.
Why does this matter for my business?
If your employee handbook was written before December 2025, it almost certainly needs updating - and because the April 2026 measures are already in force, policies that still mention SSP waiting days or leave qualifying periods are out of date today, not at some point in the future. Bounda automatically flags policies affected by ERA 2025 changes.
When do the ERA 2025 changes take effect?
Royal Assent
ERA 2025 officially becomes law
First Wave — In Force
Day-one SSP, day-one paternity and unpaid parental leave, bereaved partner's paternity leave, whistleblowing protection for harassment disclosures
Harassment & Tribunal Changes
"All reasonable steps" harassment duty, third-party harassment liability, tribunal time limits extended to six months, new trade union rights
Unfair Dismissal Changes
Qualifying period cut from two years to six months, compensation cap removed, fire-and-rehire restrictions
Later Measures
Guaranteed hours for zero-hours workers, bereavement leave as a general right, regulations defining "reasonable steps" on harassment
What are the key changes in ERA 2025?
1. Unfair Dismissal (from 1 January 2027)
From two years down to six months of service to claim unfair dismissal. The two-year rule applies until then, but anyone with six months' service on 1 January 2027 is protected immediately - so staff hired from around July 2026 are already in scope
Plans for day-one unfair dismissal rights were dropped during parliamentary debate; six months will be the standard
The cap on unfair dismissal compensation (£123,543 after the April 2026 uprating) is removed on the same date, so awards will reflect actual loss with no ceiling - significantly increasing exposure on high-salary dismissals
Action: Review your dismissal and performance management procedures now. Probation reviews and documentation need to conclude well inside six months, and anyone you hire from July 2026 onwards will be protected the day the new rules land.
2. Statutory Sick Pay & Leave Rights (in force since 6 April 2026)
Statutory Sick Pay is now payable from day one of sickness — the three waiting days are gone
SSP is now available without the lower earnings limit, extending entitlement to more workers (including part-time and low-paid staff)
Qualifying service requirements removed for parental and paternity leave — these are now day-one rights
A general right to bereavement leave, including for early pregnancy loss, with details to be set out in later regulations
Action: These measures are current law. If your sickness absence, paternity, parental, or compassionate leave policies still reference waiting days or qualifying periods, they are out of date today and should be corrected now.
3. Harassment & Tribunal Access (October 2026)
The duty to prevent sexual harassment rises from "reasonable steps" to "all reasonable steps" — you will need a documented risk assessment, current training, and evidence of both
Employers become liable for harassment of staff by customers, clients, and other third parties unless all reasonable steps were taken to prevent it
Claimants get six months rather than three to bring most claims, so contemporaneous notes and retained records matter for twice as long
Action: Update your anti-harassment policy, carry out and document a harassment risk assessment, and refresh training before October 2026. Public-facing businesses are most exposed to the third-party liability change.
4. Worker Protections & Conditions
Employers must consult and engage meaningfully with workers when proposing changes to core employment terms (pay, hours, holidays, pensions)
Guaranteed hours and notice requirements for shift workers are expected to be introduced for zero- and low-hours contracts, with details to be set in regulations
Dismissing and re-engaging staff to force through changes to key contract terms becomes automatically unfair except in narrow financial-distress circumstances
Action: If you use zero-hours contracts or anticipate restructuring, review your approach. Ensure robust consultation processes are in place.
5. Flexible Working & Family-Friendly Rights
The flexible working request process is streamlined, with clearer requirements for employers when refusing requests
Rights for paternity, parental and bereavement leave are enhanced and made more accessible
Action: Update your flexible working policy to reflect the streamlined process. Train managers on how to handle requests and document refusals properly.
6. Trade Union & Collective Rights (October 2026)
Certain restrictions on trade union activity and industrial action are repealed from October 2026
Protections for employees participating in protected industrial action are strengthened
From October 2026, employers must inform workers of their right to join a trade union in the written statement of particulars
Action: Review your employment contracts to ensure trade union rights are included. Update any policies on union membership and industrial action.
What must employers do about ERA 2025?
The April 2026 measures are already law, so start with anything your handbook has not caught up on, then prepare for the October 2026 and January 2027 waves:
Review contracts, handbooks and policies
Check all documentation against what is already in force and what is still coming. Bounda can help identify gaps.
Update dismissal and performance procedures
Prepare for the six-month qualifying period and uncapped compensation arriving 1 January 2027 - staff hired from July 2026 are already in scope.
Train managers on the new rights
Day-one SSP and parental leave (already in force), the October 2026 harassment duty, and flexible working processes.
Plan for zero-hours contract changes
Review scheduling and pay arrangements for zero-hours and shift workers.
Communicate changes to staff
Keep employees informed to manage expectations and ensure smooth compliance.
How can Bounda help with ERA 2025 compliance?
Bounda is built to help you stay compliant with ERA 2025 and beyond:
Legal Change Alerts
We monitor UK legislation and flag when your policies are affected by law changes.
Gap Analysis
Our AI checks your handbook against current law, including ERA 2025 requirements.
AI Rewrites
One-click policy updates that incorporate the latest legal requirements.
Policy Generation
Draft new policies from scratch that reflect the ERA 2025 requirements.
Bounda helps with the routine work of checking, explaining and updating your policies for each ERA 2025 wave — so you can reserve professional legal advice for the decisions that genuinely require it.
Important Note
This guide provides a summary of the Employment Rights Act 2025 based on the legislation as passed. Secondary regulations will provide further detail on implementation, and some provisions may be amended before coming into force.
For specific advice on how ERA 2025 affects your organisation, we recommend consulting a qualified employment lawyer.
Frequently Asked Questions about ERA 2025
What is the Employment Rights Act 2025?
The Employment Rights Act 2025 is the most significant update to UK employment law in decades. It covers statutory sick pay, parental leave rights, harassment prevention, unfair dismissal qualifying periods, zero-hours contract protections, and trade union rights. The reforms are arriving in stages: the first wave took effect on 6 April 2026, the harassment and tribunal changes arrive in October 2026, and the unfair dismissal changes land on 1 January 2027.
When do the ERA 2025 changes take effect?
In stages. The first wave took effect on 6 April 2026 and is already in force: day-one statutory sick pay, day-one paternity and unpaid parental leave, and related family-leave rights. October 2026 brings the 'all reasonable steps' harassment duty, third-party harassment liability, and six-month tribunal time limits. On 1 January 2027 the unfair dismissal qualifying period drops to six months and the compensation cap is removed.
Do I need to update my employee handbook for ERA 2025?
Yes, if your handbook was created before December 2025, it will almost certainly need updating - and the April 2026 measures are now current law, so sickness absence and family leave policies that still mention waiting days or qualifying service are already out of date. Disciplinary procedures, anti-harassment policies, flexible working, and zero-hours contracts are also affected. Bounda can automatically identify which of your policies need updating.
What is the new unfair dismissal qualifying period?
From 1 January 2027, the qualifying period for unfair dismissal claims drops from two years to six months of continuous service. The two-year rule still applies until then, but anyone with six months' service on 1 January 2027 is protected immediately - including existing staff - so employees hired from around July 2026 onwards will be in scope on day one of the new regime.
What changes to statutory sick pay does ERA 2025 introduce?
Since 6 April 2026, statutory sick pay is payable from the first day of sickness - the three waiting days have gone. The lower earnings limit has also been removed, extending SSP entitlement to more workers including part-time and low-paid staff. If your sickness absence policy still references waiting days or the earnings threshold, it is now out of date.
What is the October 2026 harassment duty?
From October 2026 the duty to prevent sexual harassment rises from taking 'reasonable steps' to taking 'all reasonable steps', and employers become liable for harassment of staff by third parties such as customers and clients. You will need a documented harassment risk assessment, current training, and evidence of both - not just a policy on file. Tribunal time limits also extend from three to six months.
Which of your policies does ERA 2025 affect?
Run your current handbook through Bounda and see exactly which policies need updating for each wave — April 2026, October 2026 and January 2027.
7-day free trial, no credit card required.