UK Employment Rights Act 2025: Key compliances and action points for Employers

UK’s Employment Rights Act 2025 (ERA 2025) which received Royal Assent on 18^th December, 2025 echoes the Government’s vision to ‘Make Work Pay’[1] which essentially aims to align the UK employment law with international best labour rights framework. The key objectives being to increase overall employment, improve job security and boost living standards. The amendments are a combination of upgrading existing provisions such as making statutory sick pay, paternity leave and unpaid parental leave a ‘day-one’ right instead of the requirement to complete a qualifying period of service; introducing new rights such as right to unpaid bereavement leave, new protections against dismissal for pregnant women and mothers on maternity leave as well as strengthening existing provisions such as preventing sexual harassment by making employers take all ‘reasonable steps’ to prevent sexual harassment of their employees and the obligation to protect them against harassment by third parties. The Fair Work Agency is also constituted as an enforcement machinery by virtue of the ERA 2025. 

The amendments will gain effect in phases over between 2026 and 2027. We must keep a regular check on the UK government website[2] to understand the enforcement dates better. The staggered approach of provisions coming into force will give employers the time to plan and prepare.

As the employment law landscape continues to evolve in the UK, in this blog post we have attempted to put together some of the key compliance obligations on the part of employers and some practical steps to implement the changes.

1. Statutory Sick Pay (SSP) 

ERA 2025 has removed both the lower earnings limit eligibility required for SSP to kick in as well as the waiting period. As an outcome, SSP is now payable from the first day of sickness absence and lower earners who previously did not qualify will receive SSP calculated as 80% of normal weekly earnings or 118.75 GBP, whichever is lower. Prior to this, SSP was applicable only if an employee’s average earnings met the Lower Earnings Limit. Also, SSP did not start immediately because the first 3 days of sickness were unpaid (the waiting days).

Compliance tip

• Set up payrolls to implement day-one SSP and remove the lower earnings limit eligibility criteria.  
• Update the leave policy to remove the waiting period.
• Maintain record of payroll and SSP incidence for internal audit purposes.

2. Statutory Family-friendly Leaves

(a) Paternity Leave

As per the earlier position, an employee had to be continuously employed for at least 26 weeks (known as the qualifying period) to be eligible for Paternity Leave. From 6th April 2026, ERA 2025, has removed this qualifying period of employment to have the statutory right to paternity leave. Therefore, it has become a day-one right. Moreover, employees will be also able to take paternity leave after Shared Parental Leave.

(b) Unpaid Parental Leave

An employee had to be continuously employed for at least 12 months (known as the qualifying period) with the employer to be eligible for Parental Leave. From 6th April 2026, ERA 2025, has removed this qualifying period of employment to have the right to unpaid parental leave. Therefore, it has become a day-one right.

 (c) Unpaid Bereavement leave

Under the Employment Rights Act 1996, only statutory bereavement entitlement was Parental Bereavement Leave available to an employee who has lost a child under 18 or has a stillbirth after 24 weeks. The ERA 2025 has introduced statutory Bereavement Leave that is a day one right to time off for employees to grieve the loss of a loved one, including pregnancy loss before 24 weeks. The minimum duration of bereavement leave is one week. The bereaved person must be given at least 56 days to take the leave. This change is expected to be implemented in 2027.

Compliance tip

• Rewrite the policies on family leave and bereavement leave and align them with the legislative requirements.
• Update the payroll in line with the rights that have been day-one rights to ensure correct statutory payments.
• Train managers to handle requests related to family reasons with sensitivity. 

3. Prevention of sexual harassment

The ERA 2025 amends the Equality Act and will require employers to take all reasonable steps to prevent sexual harassment. Further, it introduces a new obligation to protect them against harassment by third parties.

Compliance tip

• Conduct training and sensitization sessions on prevention of sexual harassment covering instances of third-party harassment.
• Maintain records to evidence the conducting of trainings, complaints and the corrective actions taken.

4. Fire and re-hire

The ERA 2025 restricts the practice of fire and re-hire by making it unfair to dismiss an employee for refusing to accept contractual changesunless the employer can show serious financial difficulties affecting viability. This amendment aims to restrict employers from replacing employees to hire another person on varied terms to carry out the same role. These changes are expected to be implemented in January 2027 along with an updated Code of Practice on fire and rehire.

Compliance tip

• Improve governance by requiring top-level management to approve any changes in terms of contracts like pay, hours or benefits.
• Maintain viability reasons for all proposed variations supported by financial evidence.
• Review existing employment contracts to understand how terms like pay, pensions, hours, leave, etc are currently defined and if there is any scope for variation.

5. Flexible working

The process for refusing requests from employees for flexible working has been amended and employers are now required to provide reasons in writing explaining why they feel the ground/ grounds is/are reasonable before refusing the application for flexible working request.

Compliance tip

• Standardise the process of refusal so that the reasoning falls within the eight reasons such as (a) the burden of additional costs; (b) detrimental effect on ability to meet customer demand; (c) inability to re-organise work among existing staff; (d) inability to recruit additional staff; (e) detrimental impact on quality; (f) detrimental impact on performance; (g) insufficiency of work during the periods the employee proposes to work; (h) planned structural changes etc.
• Require documented impact assessment for refusal which could have details like additional cost, team performance and so on.
• Conduct periodic internal audits to recognise any possible bias related to gender, disability etc.

While the provisions of the ERA 2025 are slated to gain effect in phases, the complementary regulations in this regard are also anticipated to be rolled out in due course.

Our compliance solution Komrisk is a comprehensive compliance management tool which helps businesses to stay ahead of these changes by centralising compliance obligations, monitoring regulatory changes, so that companies’ internal controls and policies stay aligned with the legislative requirements. This not only reduces the risk of non-compliance and penalties but also supports a more proactive, transparent approach to managing employment rights across the organisation.

Authored by: Snigdha Sanganeria

Co-authored by: Antara Dasgupta

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[1] https://www.gov.uk/government/collections/make-work-pay

[2] https://www.gov.uk/government/publications/implementing-the-plan-to-make-work-pay-and-employment-rights-act/plan-to-make-work-pay-and-employment-rights-act-timeline-update#timetable-for-changes-being-introduced-in-2026