The Employment Rights Act 2025 (ERA) is one of the most wide ranging updates to UK employment law in many years. Rather than arriving all at once, the changes are being introduced in stages — some are already in force, others take effect later this year, and the most significant reforms land in January 2027.
For many employers, the challenge isn’t the volume of change but knowing what actually applies to your business, when you need to act, and how to prepare without over engineering your HR processes.
Rather than list every change in detail, it’s more helpful to understand the themes the ERA touches and the types of action employers should be thinking about.
1. Pay, sickness and holiday
The ERA makes changes to:
• statutory sick pay (including eligibility and timing)
• enforcement of holiday pay and record keeping
• powers for a new enforcement body, the Fair Work Agency
What this means for employers:
Most businesses will need to review payroll settings, absence policies, and how holiday entitlement and pay are tracked — particularly where staff work part time, irregular hours, or receive variable pay.
2. Family leave and employee entitlements
Several family related rights now apply from Day One of employment, with more changes expected further down the line.
What this means for employers:
Employee handbooks, template contracts and manager guidance should be checked to make sure eligibility rules are accurate and easy to apply in practice.
3. Harassment, whistleblowing and workplace culture
The ERA strengthens protections around:
• sexual harassment
• third party harassment (for example by customers or clients)
• whistleblowing disclosures connected to harassment
What this means for employers:
Policies alone are not enough. Employers will need to show they’ve thought about risks in their specific environment and taken all reasonable, practical steps to prevent problems and respond appropriately if they arise.
4. Trade Union Recognition and Right
Trade union rights are being significantly strengthened across 2026. Simpler recognition processes, easier strike ballots, and stronger protections for union representatives mean employers who have managed employee relations informally may face a more structured and challenging landscape.
All workplaces, not just those with union recognition will have to inform their employees of their right to join a union and will be required to allow trade unions to gain access to workplaces for recruiting and representing members.
What this means for employers:
Including the right wording in your handbook and offer documentation will be crucial. And preparing how to respond to unions that contact your business after October.
5. Redundancy and collective consultation
The rules on when collective consultation is required remain broadly the same, but the penalties for getting it wrong have increased significantly. Further changes are expected for multi site employers.
What this means for employers:
Redundancy processes need to be planned carefully, documented properly, and approached well in advance — even if redundancies are only a possibility at this stage.
6. Dismissal and probation
From January 2027, unfair dismissal protection is expected to apply much earlier in employment, and the cap on unfair dismissal compensation will be removed.
What this means for employers:
Probation management, early performance feedback and decision making will become more important. Many businesses will want to review how managers assess performance in the first few months of employment.
7. Contracts and consultation
The ERA will significantly restrict the use of “fire and rehire” for changes to core contractual terms such as pay and hours.
What this means for employers:
Any planned contractual changes should be approached through careful consultation, with a clear understanding of what is permissible and when changes should be tackled.
A measured way to approach ERA compliance
Although the ERA is substantial, most organisations do not need a wholesale overhaul overnight. In practice, a sensible approach is to:
1. Update what’s already in force
2. Prepare steadily for the October reforms
3. Get probation, performance and contracts in good shape well ahead of January 2027
What matters most is not having the most policies — but having the right ones, tailored to how your business actually operates.
One clear next step
If you’d like help understanding how the Employment Rights Act affects your business specifically, the team at Perfect Vision HR can help. Email us at enquiries@perfectvisionhr.com with the name of your business and we can send you an ERA Readiness Check so you can assess your level of preparedness.
Or, if you prefer, you can contact us for a discussion about how we can help your business get ready.