The UK’s new Employment Rights Act 2025 represents one of the most significant overhauls of workplace legislation in a generation. As part of the government’s Make Work Pay plan, the bill aims to strengthen workers’ rights, improve fairness and security, and create more modern, sustainable employment practices.
For HR teams, this act marks a turning point – not just in compliance, but in how organisations attract, support, and retain their people. With implementation happening in phases from 2025 to 2027, employers have time to prepare, but only if they start planning now.
In this blog post, we’ll unpack the key changes, when they’re coming into effect, and how HR and payroll professionals can get ahead.
The new Employment Rights Act 2025: what’s changing and when
The Employment Rights Act will be introduced in stages, giving organisations the opportunity to adapt their policies, processes, and systems.
Here’s a snapshot of the current roadmap (please note this could be subject to change):
December 2025
The Strikes (Minimum Service Levels) Act 2023 has been removed. This means there is no longer a legal requirement for specific staffing levels to be maintained during industrial action.
February 2025
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Increased dismissal protection for industrial action, removing the 12-week cap for unfair dismissal
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Repeal of the majority of the Trade Union Act 2016:
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Notice reduced from 14 to 10 days
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Simple majority vote, industrial action and ballot notices simplified
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Picket supervisors not required
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Mandates for action increased to 12 months
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Political fund rules to change
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Paternity leave and unpaid parental leave: eligible employees who are looking to take this after 6 April can give notice from 18 February
April 2026
- Repeal of the levy that trade unions and employer associations pay to the certification officer
- Collective redundancy protective award doubles
- Strengthen protections for whistleblowing on sexual harassment
- Simplifying trade union recognition process
- Parental leave changes
- Action plans for gender pay gap and menopause
- Statutory sick pay (SSP) changes
- Fair Work Agency to be established
August 2026
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Electronic and workplace balloting introduced for trade union actions
October 2026
- Regulations to establish the Fair Pay Agreement Adult Social Care
Negotiating Body in England - Procurement – two-tier code (public sector)
- Tipping laws tightened – subject to three-year renewal of agreements
- Duty to inform workers of their right to join a trade union
- Strengthened trade unions’ right of access
- Employers will be required to take ‘all reasonable steps’ to prevent sexual harassment of their employees
- Introduction of an obligation for employers not to permit the harassment of their employees by third parties
- Introduction of power to enable regulations to specify steps that are to be regarded as ‘reasonable’, to determine whether an employer has taken all reasonable steps to prevent sexual harassment
- Unfair practices in the trade union recognition process
- New rights and protections for trade union representatives
- Extension of protections against detriments for taking industrial action
2027 and beyond
- Unfair dismissal protection from six months
- Dismissal and rehire on worse T&Cs automatically unfair
- Mandatory gender pay gap and menopause action plans
- Additional trade union changes – protection from dismissal
- Umbrella companies included with agency legislation
- Pregnancy/maternal rights increased
- Statutory bereavement leave
- Zero hours – guaranteed working hours
- Compensation for cancelled/moved shifts
- Flexible working request rejections must have a reason
- All types of harassment change to be all reasonable steps
Northern Ireland
- Northern Ireland (NI) Good Jobs Employment Rights Bill – the NI assembly has published their review, which aims to align legislation between NI and the UK. There’s potential for additional variations from the UK, including setting their own national minimum wage. The bill is expected to be introduced in 2026, but no details or dates are available just yet
- Catching up with the wider UK – this could include introducing workplace postcode reporting, bereavement leave and neonatal pay and leave
These changes are wide-ranging, touching almost every part of the employee lifecycle – from recruitment and onboarding to pay, performance, and wellbeing.
The new Employment Rights Act 2025’s SSP changes and their impact
One of the most significant reforms introduced by the new Employment Rights Act 2025 will be changes to Statutory Sick Pay (SSP), set to take effect from April 2026. These updates aim to make sick pay more accessible and equitable – but they’ll also bring new financial and administrative implications for employers.
What’s changing
From April 2026, two key SSP reforms will come into force:
- Removal of waiting days – employees will be paid SSP from day one of sickness absence
- Removal of the Lower Earnings Limit (LEL) – around 1.3 million low-income workers who previously didn’t qualify for SSP will now be eligible
These changes are designed to ensure more people have access to income when unwell, while working to fix a system that has often been criticised for excluding many part-time and lower-paid workers.
Why SSP is changing
The government’s goal is to improve fairness and productivity. Currently, around 25% of employees receive only SSP. With 148.9 million working days lost to sickness or injury in 2024, policymakers argue that supporting people to recover financially and return to work sooner benefits both individuals and the wider economy.
While the total cost of these reforms is estimated at £450 million per year, equivalent to roughly £15 per employee, it’s expected that employers will gain from reduced presenteeism and improved workforce wellbeing.
What it means for employees
- SSP will be paid from day one of absence, rather than day four
- Employees earning below the current LEL (previously £123 per week) will now receive sick pay
- For those below the LEL, SSP will be paid at 80% of average weekly earnings (AWE) or the statutory rate (currently £118.75 per week), whichever is lower
This will provide financial support for many workers who previously received nothing for short-term sickness.
What it means for employers
For employers, these reforms mean:
- Increased costs, including SSP payments, National Insurance and pension contributions
- A need to review sick pay and absence policies, including triggers, reporting processes and return-to-work interviews
- Budget planning for additional payroll costs
- Reviewing occupational sick pay (OSP) schemes
- Manager training to ensure consistent application and awareness of the new entitlements
How to prepare
To stay ahead, HR and payroll teams should:
- Tighten absence management and reporting processes
- Review sick pay policies and ensure alignment with the new SSP structure
- Consider how these changes affect contract terms, budgets, and the configuration of your absence management software
- Ensure your HR and payroll software can process SSP from day one and handle eligibility tracking for low earners
These changes may appear minor, but their ripple effects across budgets, policy, and culture are significant. Start planning now, so your organisation can absorb the additional costs smoothly – and support employee wellbeing in a way that boosts trust and productivity.
How to get ahead for the new Employment Rights Act 2025
Preparing for the new Employment Rights Act 2025 isn’t just about staying compliant – it’s about building resilience and agility into your HR strategy. Act now to reduce risk, protect your people, and ensure a smooth transition as new reforms roll out.
- Understand the timeline
Map out the key implementation dates from 2025 through to 2027 and assign clear ownership for tracking legislation updates and consultations. Having a central point of contact ensures changes are monitored and acted upon promptly.
- Audit your current policies and procedures
Review your existing frameworks to identify any gaps or inconsistencies with the upcoming reforms. Focus on high-impact areas such as:
- Sick pay eligibility
- Parental leave
- Dismissal procedures
- Flexible working
- Sexual harassment prevention
- Whistleblowing protocols
Consider whether any employee terms and conditions need to be updated to reflect these changes.
- Stay agile
Build flexibility into your HR strategy to respond quickly as new guidance or secondary legislation emerges. Regularly review your policies and communications to ensure they evolve alongside regulatory updates.
- Plan for strategic impact
Think beyond compliance – assess how these reforms may influence broader areas such as:
- Recruitment and onboarding
- Performance management
- Organisational goals and budgets
- Prepare to train line managers
Managers play a critical role in applying new workplace rights fairly and consistently. Plan targeted training around:
- Day-one employment rights
- Probation and dismissal changes
- Sexual harassment prevention duties
- Union access and consultation requirements
- Update payroll and HR systems
Your HR and payroll software must be ready to handle new requirements. Ensure your systems can:
- Process statutory sick pay (SSP) from day one
- Track hours for zero-hours and agency workers
- Flag eligibility for new leave entitlements
- Engage with legal and operations teams
Collaboration is key. Work with legal, payroll, and operational teams to complete risk assessments, review redundancy procedures, and strengthen consultation processes to stay ahead of potential challenges.
Expert tips: how to stay ahead of the curve
According to Gwenan West, our head of people operations, the HR teams who’ll handle these reforms best are those who don’t wait until the last minute:
“The new Employment Rights Act 2025 brings big changes – but none of them should come as a surprise. HR and payroll teams who start auditing now will be in a far stronger position when the deadlines hit. A lot of this comes down to preparation: having systems ready, contracts updated, and managers trained before the new rules come into force.”
Gwenan also notes that data visibility will play a crucial role:
“Understanding how your policies are applied – for example, who’s using flexible working or accessing sick pay – will be vital for compliance and fairness. Having reliable, reportable HR data makes those insights possible.”
How we can help you prepare for the new Employment Rights Act 2025
Our HR software and payroll solutions are designed to help organisations stay compliant, agile, and people-focused as new legislation takes effect. We can help you:
- Roll out contract and policy updates quickly and track policy acceptance
- Track and report on entitlements such as leave, sick pay, and parental provisions
- Automate compliance tasks using configurable templates and audit trails
- Integrate HR and payroll data for a single source of truth on workforce changes
- Stay secure and compliant with GDPR and industry standards
- Get ahead with eLearning courses that’ll help you prepare for the new Employment Rights Act 2025, like our sexual harassment course and our bullying and harassment course – both of which we offer free trials for
With configurable features and proactive support, Ciphr helps ensure you’re ready for every phase of the new Employment Rights Act 2025 rollout.
You can also watch our February 2025 update on the Employment Rights Act 2025 on-demand:
The full list of questions and answers from the webinar can be found here.
The new Employment Rights Act 2025 is a defining moment for HR and payroll professionals. By acting early – reviewing policies, updating systems, and building awareness – you’ll not only stay compliant but also strengthen your organisation’s employee experience and reputation.
The countdown to implementation has already begun. Start preparing today.
Want help preparing for 2026 and beyond? Download our brochure or request a free, no-strings attached demo to explore how Ciphr can help your organisation stay compliant and future-ready.
About the author
Claire Warner FCIPP is Ciphr’s regulatory analyst, and one of our team of payroll experts. She says: “Having ‘fallen’ into payroll like so many others, I’ve worked in the profession for over 40 years in multiple roles. This includes running payrolls in various industry sectors and working with software houses to develop software and implement systems for clients. I’ve also designed and delivered professional training and qualifications, and sessions, conferences and webinars on various payroll-related subjects. I now use this knowledge and love of payroll and the legislation that impacts it to help guide, inform and support others within the profession.”