Employment Rights Act 2025: What you need to know

Goal: a baseline of security and predictability in all jobs

• Greater advance notice of work for employees; greater planning ahead by employers
• The right to guaranteed hours for eligible workers, reflecting regularly worked hours (Expected to be an average taken over 12 weeks)
  • For the special case of agency workers, the obligation to offer guaranteed hours defaults to hirer; certain scenarios to allow for obligation to be on agencies or other intermediaries
• The right to reasonable notice of shifts for eligible workers
• The right to payment for shifts cancelled, curtailed, or moved at short notice for eligible workers
  • This will fall to agencies to make short notice payments to agency workers unless hirers are responsible for short notice
• The right to maintain a ZHC if eligible worker refuses an offer of guaranteed hours
• The right for collective agreements between trade unions and employers to opt out of measures

Goal: to end unscrupulous fire and rehire tactics that leave working people at the mercy of bullying threats

• Automatic unfair dismissal where “fire and rehire” is used to force certain restricted contractual changes, unless the employer faces serious financial difficulty and the change was genuinely unavoidable
• Employers must show credible evidence of financial risk and demonstrate the proposed change is necessary to address that risk
• Employers must prove all alternatives were explored before considering dismissal, including attempts to avoid contractual change
• Meaningful consultation is essential - engaging employees/representatives, being transparent about the business case, and attempting to reach agreement
• Employers should offer consideration (incentives) in return for agreeing to a variation, as this contributes to fairness in any tribunal assessment
• The 2024 Statutory Code on Dismissal and Re‑engagement remains in force; failure to follow it may increase tribunal awards by up to 25%

Goal: strengthen employment rights and reduce one-sided flexibility in the workplace, increasing job security for employees

• The qualifying period for the protection against ‘ordinary’ unfair dismissal will be reduced to six months
  • From the change date, employees with six month’s service will be immediately protected
• The power to vary the qualifying period without primary legislation is removed; any future changes must be passed as a new law through Parliament
• The qualifying period to request written reasons for dismissal is also reduced to six months
• The qualifying period for unfair dismissal protection relating to spent convictions is removed, so it will become day one unfair dismissal
• The statutory cap on compensatory awards for unfair dismissal is removed entirely

Goal: strengthen SSP for all

• SSP will be payable from the first working day of sickness absence once sickness reporting procedures have been followed
• The lower earnings limit for SSP eligibility will be removed
• Lower paid and variable-time workers will now qualify for SSP
• SSP will be calculated as the lower of the statutory flat rate or 80% of average weekly earnings
• The maximum duration of SSP remains 28 weeks; the need for medical evidence remains in line with statutory rules; it remains the employers responsibility to fund SSP

Goal: to establish a Fair Pay Agreement (FPA) process for the social care sector, to allow for the creation of Social Care Negotiating Bodies (SCNB)

• FPA system created for England, Wales and Scotland to set sector‑wide minimum pay, terms and conditions for social care workers
• SCNB that will negotiate legally enforceable minimum standards; agreements can only raise existing terms, not reduce them; these include:
  • minimum pay rates
  • conditions
  • training
  • progression
  • wider workforce standards
• Employers will need to prepare for sector‑wide mandatory minimums, ensuring pay structures, workforce planning and compliance processes align with upcoming FPA standards

Goal: establish an entitlement to Bereavement, Paternity and Parental Leave from the first day of employment

• Establish a day one unpaid statutory right to protected time off for Bereavement Leave, including pregnancy loss
  • Leave duration must be a minimum of one week
  • The bereaved employee must have at least 56 days to take the leave
• The bereaved employee must have at least 56 days to take the leave
• Provide protection against redundancy and dismissal
• Make employees eligible for without needing to have worked for their employer for a qualifying timeframe
• Introduce a transition period for newly eligible parents taking Paternity Leave, temporarily shortening the notice period to 28 days so that they can take leave from 6 April 2026; reverts after this period
• Removes the restriction on taking Paternity Leave and Pay after taking Shared Parental Leave and Pay

Goal: set out details of enhanced dismissal protections and extend protections to a wider set of parents returning from other family related leaves

• Gives the Secretary of State new powers to introduce enhanced protections against dismissal for pregnant women and new mothers through regulations
• Sets out regulations on when dismissal will be permitted, how long enhanced protection will last after return to work, and what procedural safeguards must be followed
• Allows these enhanced protections to be extended to other parents returning from family-related leave, such as Adoption Leave
• Responds to evidence that existing protections have not prevented discrimination and job loss for pregnant women and new mothers

Goal: support access to flexible working, ensuring that employers accept reasonable and feasible requests

• Requesting flexible working becomes a “Day 1” right; employers must handle these requests fairly and quickly
• Employees are allowed to make up to two requests per year
• Employers are required to consult with the employee before rejecting a request; guidance on how such consultation is conducted is to be set out in secondary legislation
• Employer’s decision period is shortened to two months
• Flexible working arrangements include Part time Flexible hours (‘Flexitime’) Staggered shifts, Compressed hours, Term-time hours, Job shares, Remote work, Hybrid work
• Employers can refuse a flexible working request for one (or more) of eight possible business reasons set out in legislation

Goal: provide clarity around protection for those who blow the whistle on sexual harassment

• Sexual harassment is added to list of protected disclosure wrong doings of ERA 1996
• There must be reasonable belief of a criminal offence or a danger to health and safety that is in the public interest for the protection to qualify
• Could be applicable to sexual harassment that has occurred, is occurring or is likely to occur

Goal: that NDAs are not used to cover up misconduct in the workplace

• An NDA between an employer and a worker will be void where it seeks to prevent the worker from speaking out about:
  • "Relevant harassment or discrimination"
  • their employer’s response to the relevant harassment or discrimination
  • the making of an allegation of relevant harassment and discrimination
• Dept. for Business and Trade to be given the ability to
  • set out needed conditions for validity of NDAs between a worker and their employer
  • outline who workers who enter into an “excepted agreement” can still speak to about the relevant harassment and discrimination
  • expand the group of people who this new measure applies to, beyond the standard definition of “worker” in ERA 1996
• Builds on other legal restrictions on NDAs in higher education and for victims of crime
• Legitimate use of NDAs to protect commercially sensitive information remains in place

Goal: to help both workers and employers by offering one place for advice, compliance support, and enforcement action.

• The FWA will be an Executive Agency within the Department for Business and Trade (DBT); it will not have its own legal identity; the Secretary of State formally holds the enforcement powers, which will be carried out by the FWA.
• It will create a single body for state enforcement of employment rights, replacing the current fragmented approach; it will cover:
  • National Minimum Wage
  • Agency worker regulations
  • Gangmaster licensing standards
  • Relevant parts of the Modern Slavery Act 2015
  • Holiday pay enforcement
  • Statutory Sick Pay enforcement
• The FWA will replace and absorb:
  • Gangmasters and Labour Abuse Authority (GLAA)
  • Director of Labour Market Enforcement
  • Employment Agency Standards Inspectorate
  • HMRC’s National Minimum Wage Unit
• The FWA will have stronger, more coordinated enforcement powers, meaning greater risk for noncompliance
• Employers will have clearer guidance and support, but also increased penalties for breaches
• Records, evidence, and pay calculations (holiday pay, minimum wage, SSP) will need to be robust and audit-ready
• Businesses that misclassify workers, underpay, or fail to follow agency/GLAA rules will face civil and criminal consequences
• Compliance now is essential to avoid enforcement costs later (which can be recovered from employers)

Goal: give UC workers comparable protections to directly employed counterparts

• Expanding definition of “employment business” within EAA1 to include actions commonly undertaken by UC (specifically handling pay)
• UC will be regulated by FWA
• New definition of “employment business” and amendments to Conduct Regulations
  • New regulations will apply to extended definition of employment businesses
• A period of consultation, development of secondary legislation, and preparation time for all impacted to come
• UC to become subject to the (to be amended) Conduct of Employment Agencies and Employment Businesses Regulations 2003