Firm News | 20.07.26

Employment Rights Act 2025: Key Changes Employers May Have Missed

The Employment Rights Act 2025 marks one of the most substantial reforms to employment law in recent years.  Whilst much attention has been given to its headline proposals, a number of important changes have already taken effect and should not be overlooked.

Although some of these reforms are unlikely to affect employers on a day-to-day basis, others have immediate practical consequences for recruitment, record-keeping, family leave and collective consultation.  Employers would therefore be well advised to review their policies and procedures to ensure they remain compliant.

Changes to Statutory Sick Pay

From 6 April 2026, the rules on Statutory Sick Pay (“SSP”) changed significantly.

The three-day waiting period has been removed, meaning SSP is now payable from the first qualifying day of sickness absence.  The Lower Earnings Limit has also been removed, extending entitlement to lower-paid employees who would previously have fallen outside the SSP regime.

Employers should ensure that payroll systems, sickness absence policies and absence management procedures have been updated to reflect these changes.

Day-One Rights to Paternity Leave and Unpaid Parental Leave

From 6 April 2026, employees are no longer required to complete a qualifying period of service before becoming entitled to unpaid parental leave or statutory paternity leave, provided the other statutory eligibility and notice requirements are met. Employers should distinguish this from statutory paternity pay, which is subject to separate eligibility conditions.

Previously, eligibility for these rights depended upon satisfying minimum service requirements.  The reforms now provide qualifying employees with access to these rights from the first day of employment, provided the statutory eligibility criteria are otherwise met.

Employers should ensure that family leave policies, employee handbooks and employment contracts accurately reflect these changes.

Protective Awards for Collective Redundancies

Employers proposing to make 20 or more redundancies at a single establishment within a period of 90 days or less remain under a statutory duty to collectively consult with appropriate employee representatives.

However, where an employer fails to comply with those obligations, the potential financial consequences have increased substantially.  From 6 April 2026, the maximum protective award has doubled from 90 days’ gross pay up to 180 days’ gross pay per affected employee.

Given the significant increase in potential liability, employers contemplating large-scale redundancies should ensure that collective consultation obligations are identified and complied with at an early stage.

Expanded Whistleblowing Protection

The statutory protection afforded to whistleblowers has also been expanded.

Disclosures relating to sexual harassment are now expressly capable of amounting to protected disclosures under the whistleblowing legislation, provided the usual statutory requirements are met, including making a qualifying disclosure of information and, where relevant, having a reasonable belief that the disclosure is in the public interest. This provides additional protection for workers who raise concerns regarding sexual harassment in the workplace and reinforces the importance of employers maintaining effective reporting procedures.

Employers should review their whistleblowing and anti-harassment policies to ensure that concerns can be raised safely and investigated appropriately.  They should also ensure that managers understand when a complaint about sexual harassment may need to be treated not only as a grievance or harassment complaint, but also as a potential protected disclosure.

Annual Leave Record Keeping

A less publicised, but nevertheless important, reform is the introduction of a statutory obligation requiring employers to maintain adequate records demonstrating compliance with annual leave legislation.

Employers should retain adequate records demonstrating compliance with statutory holiday entitlement and holiday pay obligations, including holiday taken, holiday carried forward where permitted, holiday pay calculations, and any lawful payments in lieu, usually on termination. Records should be retained for at least six years from the date they are made.

Trade Union Reforms

Several reforms affecting trade unions and industrial relations have also come into force.

These include changes to trade union and industrial action rules, including stronger protection against dismissal for employees participating in protected industrial action, an extension of the validity of industrial action mandates from six to twelve months, and a reduction in the notice required before industrial action may lawfully commence from 14 days to 10 days.

Whilst these changes will primarily affect unionised workplaces, employers should nevertheless be aware of the revised legal framework.

The Fair Work Agency

On 7 April 2026, the Fair Work Agency was formally established.  The Agency consolidates a number of existing enforcement functions and has responsibility for enforcing specified areas of labour market legislation.

Although many of its powers will develop over time, its establishment reflects the Government’s intention to strengthen workplace enforcement and increase scrutiny of employers’ compliance with employment legislation.

A Timely Opportunity to Review Policies

The reforms already implemented under the Employment Rights Act 2025 demonstrate that the legislation is not simply a future concern.  Several important changes are already affecting employers’ legal obligations, with further reforms expected over the coming months and years.

Now is an appropriate time to review employment contracts, staff handbooks and workplace policies to ensure they reflect the current legal position.  Taking proactive steps now is likely to reduce both legal risk and administrative difficulty as the remaining provisions of the Act are brought into force.

If you would like advice on how the Employment Rights Act 2025 affects your business, or would like us to review your employment documentation, please contact a member of our Employment Team.

This article should not be relied upon as legal advice. If you would like specific legal advice or require any assistance, then please get in touch: 020 4549 2460 or 01380 733300 | commercial@wansbroughs.com