Employment Rights Act 2025: What it means for UK businesses

2 July 2026 5 MIN READ

What is the Employment Rights Act 2025?

The Employment Rights Act is legislation designed to strengthen employment rights across the UK. The Employment Rights Bill received Royal Assent and became the Employment Rights Act 2025, marking a major update to UK employment law.

When will the Employment Rights Act 2025 come into force?

Here’s what you need to know so far:

• The Employment Rights Bill was introduced to Parliament on 10 October 2024 and passed on 18 December 2025.
• Key changes have already come into effect in February and April 2026, with further changes planned throughout 2027.
• The changes will be delivered in phases to help employers, businesses, and employees prepare and plan.

Key changes employers need to knows

For ease, we’ve rounded up some of the key changes to be aware of.

Changes to unfair dismissal rights
Starting 1st January 2027, unfair dismissal laws will be updated to:

• Extend protection to employees after just 6 months of employment, down from the current 2-year requirement.
• Remove the cap on the amount of compensation that can be awarded for unfair dismissal.
• Require employers to follow stricter procedures during dismissals to ensure fairness and reduce wrongful terminations.

Employment Rights from day one
Starting from their first working day, workers will gain access to important rights, including:

Changes to zero-hours contracts

Upcoming regulations aim to make zero-hour contracts more transparent. Employers will need to clearly communicate employees’ rights regarding pay, notice periods, and the right to request fixed hours. These updates are designed to enhance job security and reduce exploitation of casual workers.

Trade Union and worker protections in relation to the Equality Act 2025

Protections for trade union activity will be strengthened to promote equality and prevent discrimination. This includes safeguards against victimisation for union participation, increased support for inclusive workplace practices, and measures to eliminate discrimination based on gender, race, age, disability, and other protected characteristics.

While these are some of the key changes to be aware of as a small business owner, you can find full details of all changes in effect, and planned, on the government website here.

Please note: The timings outlined are based on the current government roadmap and may be subject to change or amendments. To make sure you have the most recent information, it’s a good idea to bookmark the dedicated page for any real-time updates!

​What employers should do now

It pays to be prepared and now that you’re in the loop, it’s time to think about how you’ll implement these within your own small business.

Review contracts and policies

First up, employee contracts and company policies! Take the time to review all employee handbooks, contracts, and any internal policies to make sure they’re up to date and reflect new regulations. For ease, you should aim for consistency across all documents.

Train management and HR teams

Your people are your biggest asset, so make sure they have the right training to support them in doing their job to the best of their ability. For the new changes, set up training sessions to help employees understand the new laws alongside proper implementation methods.

Strengthen documentation and processes

Keep an eye on updates from official sources and industry groups so you’re always in the know about upcoming changes. Use this information to take a good look at your current processes to see where you might need to make some updates or tighten up how you do things.