Employment Rights Act 2025: Complete Overview
The most significant employment law reform since the late 1990s — day-one unfair dismissal protection, default flexible working, restrictions on fire-and-rehire, and a new Fair Work Agency.
Overview
The Employment Rights Act 2025 (ERA 2025) received Royal Assent on 16 May 2025 and is the most significant overhaul of employment law in Great Britain since the late 1990s. It removes the 2-year qualifying period for unfair dismissal (subject to a statutory probation period), makes flexible working the default position, restricts 'fire-and-rehire' and 'fire-and-replace' practices, extends statutory sick pay from day one, removes the lower earnings limit for SSP, strengthens collective redundancy consultation, and creates a new Fair Work Agency to enforce employment rights. Provisions commence on a phased basis between 2025 and 2027. Some changes (such as the Fair Work Agency establishment) are already in force; others (notably day-one unfair dismissal protection) require commencement regulations and detailed implementation guidance. The reforms apply in Great Britain (England, Wales, Scotland) — Northern Ireland has separate employment legislation.
Who Can Use This Process
- Affects all employees and workers in Great Britain
- Affects all employers in Great Britain regardless of size (though micro-business exceptions apply in some provisions)
- Does not change Northern Ireland employment law
Step-by-Step Process
Day-one unfair dismissal
The qualifying period for ordinary unfair dismissal is reduced from 2 years to zero. A new statutory 'initial period of employment' (probationary period) of up to 9 months allows employers to dismiss with a lighter-touch process during that time. Automatically-unfair dismissal reasons (whistleblowing, asserting statutory rights, pregnancy, etc.) continue to apply from day one as before.
Flexible working becomes default
Section 80F of the Employment Rights Act 1996 is amended: flexible working becomes the default. Employers can only refuse a request on a 'reasonableness test' — they must show the refusal is reasonable in light of one or more specified business grounds. The current eight statutory grounds are not abolished but reframed as factors in the reasonableness assessment.
Fire and rehire restricted
Dismissal will be automatically unfair where the principal reason is the employee's refusal to agree a contractual variation, unless the employer proves the variation was necessary to avoid serious financial difficulty likely to affect the employer's ability to carry on the business. The statutory code of practice introduced in 2024 is strengthened with stronger remedies for breach.
Statutory sick pay reform
SSP becomes payable from the first day of incapacity (currently the fourth). The lower earnings limit for SSP entitlement is removed, meaning all workers (not just those earning above £125/week) become eligible. Daily SSP rates are reviewed annually.
Stronger redundancy consultation
Collective redundancy consultation obligations under TULRCA 1992 are extended: the threshold for 'multiple establishments' is clarified to prevent fragmentation, and the minimum consultation period for 100+ proposed redundancies is increased. Penalties for failure (protective awards) are extended in some circumstances.
Fair Work Agency
A single Fair Work Agency replaces the patchwork of HMRC NMW enforcement, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate. It can investigate and prosecute breaches of NMW, holiday pay, SSP, modern slavery in supply chains, and agency worker regulations. The Agency can issue civil penalties without going to court for many offences.
Other reforms
Includes: extension of bereavement leave; ban on zero-hours contract abuse with a right to predictable terms after 12 weeks; new protections for pregnant employees and those returning from family leave (already commenced); statutory framework for trade union recognition simplified; expanded equality reporting (gender pay gap remains, ethnicity pay gap reporting introduced for 250+ employers from 2026).
Important Warnings
Commencement is phased — not all provisions are in force. Check legislation.gov.uk for the latest commencement orders before relying on any specific reform.
The day-one unfair dismissal change is expected to commence by Autumn 2026 at the earliest, subject to detailed regulations on the initial period of employment.
Employers should not delay reviewing their disciplinary and dismissal procedures, contracts, and flexible working policies — the changes are likely to take effect in stages but the direction of travel is clear.
Some changes (such as Sexual Harassment Act 2023 amendments to s.40A EqA) are already in force as of October 2024 — these are separately implemented and not formally part of the ERA 2025 commencement timetable.
Useful Links
Frequently asked questions
- What are the most common mistakes to avoid?
- Watch out for: Commencement is phased — not all provisions are in force. Check legislation.gov.uk for the latest commencement orders before relying on any specific reform.; The day-one unfair dismissal change is expected to commence by Autumn 2026 at the earliest, subject to detailed regulations on the initial period of employment.; Employers should not delay reviewing their disciplinary and dismissal procedures, contracts, and flexible working policies — the changes are likely to take effect in stages but the direction of travel is clear.. If you're unsure on any of these, get advice from a regulated solicitor or a free service like Citizens Advice before acting.
- Where can I find the official forms and guidance?
- The official sources are: Employment Rights Act 2025 — legislation.gov.uk; ACAS guidance — Employment Rights Act 2025; GOV.UK collection — Employment Rights Act 2025. Always use the forms / guidance from the issuing authority's own site — third-party copies can be out of date.
- Can I do this myself without a solicitor?
- Yes — many people complete this kind of matter as a litigant in person. The site walks through each step in plain English. A solicitor is recommended if: large sums are at stake, the other side has legal representation, the matter involves criminal liability, children, immigration, or you're unsure on any procedural deadline. Free advice is available from Citizens Advice, Law Centres, and (for some matters) LawWorks pro bono clinics.
Part of our Employment Disputes hub
Pre-claim grievance through ACAS Early Conciliation, ET1, and Employment Tribunal hearing under the post-ERA 2025 regime.