The Employment Rights Act 2025: preparing for change with seven practical steps

The new Employment Rights Act 2025 (ERA 2025) which became law at the end of December, marks a pivotal moment in UK employment law, introducing wide-ranging reforms designed to modernise workplace protections and enhance employee rights. From stronger unfair dismissal and harassment protections to new practices on 'fire and rehire' and guaranteed hours, 2026 will bring significant change for employers.

Although many details remain subject to consultation and phased implementation, proactive preparation will be essential for organisations seeking to remain compliant, resilient, and trusted by their workforce.

Here are seven suggested steps to help employers prepare for the ERA 2025:

1. Assess the organisational impact

An important first step for any organisation will be to plan how the ERA 2025's provisions might affect your business – understanding the impact now will help save time and reduce risks later. Conduct a risk assessment to identify areas of vulnerability and potential opportunity. The findings will help inform your HR strategy and workforce planning, ensuring operational priorities align with the new legal framework.

Any risk assessment should include a review of the possible financial implications of the employment changes. The ERA 2025 is expected to result in increased costs for employers, including changes to statutory entitlements (such as Statutory Sick Pay), greater scope for disputes and additional administrative costs. Early financial planning will help organisations budget for these and mitigate risks.

2. Carry out a policy review

Existing workplace policies should be reviewed to identify areas that may need updating, with changes made as appropriate according to the Government's anticipated implementation timeline:

From April 2026:

• Family rights – update paternity and unpaid parental leave policies to reflect eligibility from day one of employment.
• Statutory Sick Pay (SSP) – remove references to eligibility thresholds and waiting days in absence management policies, making it clear that entitlement to SSP will be a day-one right.

From October 2026:

• Harassment – embed employer obligations to take all reasonable steps to prevent sexual harassment and liability for third party harassment in all relevant policies. Update whistleblowing policies to show that a disclosure about sexual harassment will become a ‘protected disclosure’.

From 2027:

• Flexible working – consider how to manage the new requirement for refusals to be reasonable and for this to be documented, and update policies accordingly.
• Maternity policies – policies should include details about the enhanced protection against dismissal for pregnant workers and those on and returning from maternity leave, and ensure managers are aware of the additional protection.
• Bereavement leave – policies should be extended to cover non-parents and early pregnancy loss.
• Equality action plans – if applicable, develop or revise action plans to tackle pay gaps, menopause support and other equality concerns.

3. Update contractual documentation

This is an opportunity to consider whether your current contractual terms support both future compliance and your business needs. This is particularly important given the changes being made to fire and rehire, which will make it much harder for unilateral changes to be made to contractual terms (anticipated in October 2026). 

For example, ensure contracts have probationary periods covering the first six months of employment to help manage the new unfair dismissal qualifying period. Contractual arrangements for those on zero-hours or casual contracts may also need to be reworked.

Changes to harassment law (expected in October 2026) will also affect standard documents. The introduction of liability for third party harassment make it essential to include clear terms in contracts with third parties (such as clients or suppliers) that emphasise a zero-tolerance approach to discrimination and harassment.

In addition, any documents containing a non-disclosure agreement (NDA), such as template settlement agreements, will need to be reviewed in light of provisions that will render NDAs void if they attempt to prevent a worker from making an allegation or disclosure about harassment or discrimination. Organisations should also consider how to manage the potential reputational impact of being unable to secure confidentiality over such allegations.

4. Upgrade systems and processes

The ERA 2025 will require organisations to have robust HR systems and procedures to implement and manage reforms once they are in effect. Investing in technology upgrades now can help avoid compliance risks when changes come into effect.

For example, changes to unfair dismissal make it critical to strengthen processes around recruitment, onboarding, and performance management. In particular, managing the first six months for new joiners will be key. Systems should flag key dates to ensure reviews take place before unfair dismissal protection applies at six months. Similarly, changes to guaranteed hours will require systems that can accurately record working hours, manage shift allocations, and document decisions.

Accurate and timely documentation will also be essential to demonstrate compliance in the event of a potential dispute. Employers should establish clear protocols for recording the business rationale for decisions, for example, those relating to flexible working requests or early dismissal decisions.

5. Training and awareness

Managers and HR professionals will be instrumental in implementing the ERA 2025. Raise awareness early to help build confidence ahead of the new rules coming into force. 

As part of this, it will be important to equip managers with the skills to have difficult conversations, document decisions properly, and manage performance within the new legal framework. Training should go beyond technical compliance and focus on developing judgment and communication skills to reduce risk and maintain trust. Use practical scenarios, for example around managing dismissals, handling flexible working requests or organising guaranteed hours, to help managers understand how to apply the new rules fairly.

Senior leaders should also be briefed on the changes and their strategic implications. Awareness at leadership level will help reinforce accountability and ensure that ERA 2025 compliance is embedded into wider governance frameworks and decision-making processes. 

6. Staff and trade union engagement

Organisations should engage proactively with employees and, where applicable union representatives, about the upcoming changes. Transparent communication and opportunities for feedback can build trust, reduce misunderstandings, and help prevent disputes.

Trade union reforms may see unions able to build a stronger presence and influence in the workplace, making proactive management of union relationships crucial. For non-unionised employers, increased rights of access for unions and a simplified recognition process could expand union reach and grow membership. Employers may want to think about how to engage employees collectively or address workforce concerns via other means – such as employee forums, town halls or digital channels for feedback or communication – to reduce the impetus for employees to turn to unions.

7. Stay up to date with developments

As many details of the ERA 2025 are still evolving, staying informed will be key. Consider designating a team member or committee to monitor updates and coordinate your organisation’s response as new information emerges.

Even after changes come into effect, organisations should monitor compliance and audit processes to ensure ongoing compliance. This will help identify gaps early and reduce the risk of disputes.

To stay up to date with developments as they happen, visit our updated Employment Rights Act 2025 insights page.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, December 2025