Employment Rights Act 2025
Landmark Act in force from 16 May 2025: day-one unfair dismissal protection, flexible working as default, fire-and-rehire restrictions, SSP from day one, and a new Fair Work Agency.
Who is affected: All employees, workers, and employers in Great Britain
What Changed
The Employment Rights Act 2025 received Royal Assent on 16 May 2025. It removes the two-year qualifying period for unfair dismissal, replacing it with a statutory 'initial period of employment' (probation) of up to 9 months during which a lighter-touch dismissal procedure applies. Flexible working becomes the default — employers must apply a 'reasonableness test' to refuse a request, rather than the previous eight grounds. Fire-and-rehire and fire-and-replace practices are restricted: dismissal for refusing a contract variation is automatically unfair unless the employer can prove serious financial necessity. Statutory Sick Pay becomes payable from day one (currently day four), and the lower earnings limit is removed. Collective redundancy consultation thresholds are tightened. A new Fair Work Agency consolidates HMRC NMW enforcement, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate.
What To Do
Employers should review disciplinary and dismissal procedures to be ready for day-one unfair dismissal protection; design and document an 'initial period of employment' (probation) framework; revise flexible working policies to apply the reasonableness test; ensure SSP processes can pay from day one; and train line managers on the new fire-and-rehire restrictions. Employees should know the day-one protection is not in force on Royal Assent — phased commencement is expected from late 2025 through 2027, with day-one unfair dismissal not before Autumn 2026. Check legislation.gov.uk commencement orders before relying on any specific provision.