The Employment Rights Act 2025 is being implemented in phases across 2026 and 2027 and represents one of the most substantial reforms to UK employment law in recent years.
1. Statutory Sick Pay
From April 2026, Statutory Sick Pay is payable from the first day of sickness absence and the lower earnings threshold has been removed.
2. Family Leave Rights
Paternity leave and unpaid parental leave are now day-one rights for eligible employees, removing previous qualifying service requirements. Statutory paternity pay remains subject to separate eligibility criteria.
3. Collective Redundancy Consultation
The maximum protective award for failure to comply with collective consultation obligations has increased from 90 to 180 days’ pay per affected employee.
4. Sexual Harassment and Whistleblowing
From October 2026, the existing duty to prevent sexual harassment will be strengthened so that employers must take all reasonable steps to prevent sexual harassment. Liability will also extend to third-party harassment, which is particularly relevant in school settings where employees interact with pupils, parents, visitors, contractors and members of the wider community. In addition, reports of workplace sexual harassment are now treated as protected disclosures for whistleblowing purposes.
5. Unfair Dismissal Protection
From 1st January 2027, the qualifying period for ordinary unfair dismissal protection is expected to reduce from two years to six months. This will have a significant practical impact on recruitment and probationary management.
6. Removal of the Compensation Cap in Unfair Dismissal Cases
From 1st January 2027, the statutory cap on compensation for ordinary unfair dismissal claims is expected to be removed. At present, the compensatory award is capped at the lower of 52 weeks’ gross pay or £123,543. Once the cap is removed, Employment Tribunals will be able to award compensation by reference to the individual’s actual financial loss, subject to the usual principles including mitigation, contributory fault and any other applicable reductions. This is likely to increase the potential value of unfair dismissal claims.
