The Employment Rights Bill became the Employment Rights Act 2025 on 18 December 2025, and it is now rewriting the rules for employers across Great Britain in stages. Employment law in Northern Ireland is devolved and follows its own timetable, though the Act's statutory sick pay changes apply UK-wide. Some of its biggest changes are already law. Some arrive in weeks. The largest of all lands on 1 January 2027. 

That staged rollout is exactly why so many SME owners are caught out. The question that matters is no longer "what is in the Act?". It is "which parts apply to my business today, which apply in January, and what do I change before then?". 

This guide answers that question in four parts. First, what changed on the Bill's way through Parliament, because the version that became law is not the version most coverage described. Second, every measure already in force, with the action each one demands. Third, a verified commencement table showing what lands when, sourced from the commencement regulations and the government's published timeline. Fourth, the changes still to come, so you prepare once rather than twice. 

It is written for the owner or manager of a UK business with 5 to 450 staff and no experienced HR person in the building. It is educational guidance, not legal advice on any individual case. 

From Employment Rights Bill to Act: what changed on the way through Parliament 

The Employment Rights Bill was introduced to Parliament on 10 October 2024. After fourteen months of amendments, it received Royal Assent on 18 December 2025 and became the Employment Rights Act 2025, chapter 36. It runs to 160 sections and twelve schedules. It is the biggest rewrite of UK employment law since the Employment Rights Act 1996. 

Two things changed during passage that every SME owner should understand. 

The first is unfair dismissal. The Bill as introduced promised day-one protection from unfair dismissal, softened by a statutory probation period. That is not what was enacted. After the House of Lords voted against day-one unfair dismissal rights, the final Act instead cuts the qualifying period from two years to six months. Section 25 of the Act does this by direct substitution: "two years" becomes "six months" in the Employment Rights Act 1996. 

The second change got far less attention and carries more financial risk. The same section removes the statutory cap on the compensatory award for unfair dismissal. From the date section 25 takes effect, there is no upper limit on what a tribunal can award for lost earnings in an ordinary unfair dismissal case. Both changes take effect on 1 January 2027. The detail, including the transition rule that catches December 2026 dismissals, is covered later in this guide. 

Everything else in the Act arrives through commencement regulations, phase by phase. This mechanism confuses more SME owners than any single measure, so it is worth thirty seconds. Royal Assent made the Act law, but almost none of it applied on that day. Each provision sits dormant until a statutory instrument switches it on. Commencement regulations arrive in batches: SI 2026/3 started the January and February 2026 measures, SI 2026/323 and SI 2026/373 delivered the April changes, SI 2026/954 switched on the six-month tribunal time limit from 1 October 2026, and SI 2026/559 fixed the January 2027 unfair dismissal date. More will follow for the 2027 measures. 

Two consequences flow from this. First, a headline saying the Act "bans" or "gives" something is meaningless without a commencement date attached. Several widely reported rights, including guaranteed hours for zero-hours workers, are still not in force anywhere. Second, dates can move. The government maintains a running timeline of what takes effect when, updated as each phase firms up, and it is the single most useful page on GOV.UK for planning ahead. Our earlier Employment Rights Bill roadmap update tracked the position as it stood in March 2026. This pillar replaces it as the current summary. 

Employment Rights Act 2025 changes already in force 

Everything in this section is live law as this article goes out. Each measure below carries the date it commenced, the source, and the practical move for an SME. 

December 2025: minimum service levels repealed 

The Act repealed the Strikes (Minimum Service Levels) Act 2023 at Royal Assent. Unless you operate in previously covered sectors such as rail or ambulance services, nothing changes day to day. 

18 February 2026: trade union rules reset 

The great majority of the Trade Union Act 2016 was repealed, simplifying ballot and political fund requirements. Employees also gained stronger protection against dismissal for taking part in lawful industrial action, under section 77 of the Act, commenced by SI 2026/3. Section 76, commenced the same day, protects workers only against detriments that regulations prescribe, and the government timeline puts those protections on 30 October 2026. 

Most small employers never see a ballot. The practical point is narrower: if industrial action ever touches your business, dismissing participants is now a fast route to a tribunal. Take advice before acting, not after. 

6 April 2026: the big employer day 

Five substantial changes landed together on 6 April 2026. This was the heaviest single day of the rollout for SMEs. 

Statutory sick pay from day one. Sections 10 and 11, commenced by SI 2026/373, removed the three waiting days and the lower earnings limit. SSP is now paid for every qualifying day from the first day of sickness. The rate is £123.25 a week or 80% of normal weekly earnings, whichever is lower, for up to 28 weeks. Two groups changed status overnight: everyone off sick for fewer than four days, who previously cost you nothing in SSP, and low-paid part-time staff who previously earned too little to qualify at all. 

Check the payroll side has actually caught up. Staff below the old earnings threshold need to be flagged as SSP-eligible, and the 80% calculation needs their normal weekly earnings figure, worked out over the usual eight-week reference period. Software handles this correctly if it is up to date; manual payroll is where the errors have been surfacing since April. 

The bigger action is management, not payroll. A single sick day now has a direct cost, so patterns of short absence matter more than they did. Return-to-work conversations after every absence are the control that works. In our work with SME customers, that one habit changes absence behaviour faster than any policy rewrite. If you have not rebuilt your absence process since April, our guide to statutory sick pay, flexible working and the right to disconnect covers the mechanics. 

Day-one paternity leave and unpaid parental leave. The qualifying periods were removed by sections 15 and 16. A new starter who is an employee can now give notice for paternity leave in their first week. Statutory paternity pay has not changed: it still requires 26 weeks' service and average earnings at or above the lower earnings limit, so leave taken early in employment may be unpaid. Under separate legislation that took effect the same day, bereaved partners can also take up to 52 weeks of paternity leave where the mother or primary adopter dies within the first year of the child's life. Family leave policies written before 2026 are wrong on these points and need updating. 

Collective redundancy protective award doubled. Section 30 raised the maximum protective award from 90 to 180 days' pay per affected employee, in force via SI 2026/323. If you propose 20 or more redundancies at one establishment within 90 days and get the consultation wrong, the ceiling on what each employee can claim has doubled. For a 25-person redundancy exercise, botched consultation is now a six-figure risk before any unfair dismissal claims are counted. The consultation windows and HR1 filing duties have not changed; our guide to the 45-day rule and HR1 forms sets them out. Selection method matters just as much, and how you score selection criteria is where most challenges start. 

Whistleblowing protection for sexual harassment disclosures. Section 23 added sexual harassment to the list of matters that qualify as protected disclosures. A worker who reports sexual harassment, theirs or a colleague's, is now protected against dismissal and detriment as a whistleblower, provided they reasonably believe the disclosure is in the public interest. 

Holiday records became a legal duty. Section 35 inserted a new requirement into the Working Time Regulations: employers must keep records adequate to show compliance with holiday entitlement and holiday pay rules, and retain them for six years. Failure is an offence. Records can be kept in any reasonable format, but "the rota is in the manager's head" no longer passes. If your leave tracking is a spreadsheet nobody reconciles, this is the prompt to fix it. 

Two further April measures matter to a minority of readers. Trade union recognition was simplified, lowering the practical bar for a union to gain statutory recognition at employers with 21 or more workers. And voluntary action plans on gender equality and menopause support were launched ahead of the mandatory versions expected in 2027. 

7 April 2026: the Fair Work Agency exists 

The Act created a single state enforcement body for employment rights, and it has been operational since 7 April 2026. The Fair Work Agency consolidated minimum wage enforcement, sick pay enforcement, gangmaster licensing and employment agency oversight, with powers to demand documents, enter premises and issue notices of underpayment. Umbrella companies come into its remit when the 2027 regulations land. 

The shift for SMEs is simple. Before, most employment rights were enforced only when an individual brought a tribunal claim. Now a state body with inspection powers can come to you. Holiday records, payslips and working time records are exactly the documents it can require. 

Being ready is not complicated, but it is specific. The records that matter most are these: six years of holiday entitlement and pay records, payslips that itemise correctly, SSP payment records, and right to work evidence. If a request letter arrived tomorrow, the test is whether one person in your business could produce all four sets within a week. Where the answer is no, the gap is usually the holiday records, because until April 2026 nobody was legally required to keep them in a provable form. 

25 August 2026: electronic balloting 

Statutory trade union ballots can now be run electronically and in the workplace. For most SMEs this is background noise, but it lowers the practical barriers to industrial action ballots in workplaces where a union is present. 

1 October 2026: tribunal time limits doubled 

The window for bringing most employment tribunal claims increased from three months to six months, under section 152 of the Act, commenced by SI 2026/954. The longer limit applies where the act complained of, or for unfair dismissal the effective date of termination, falls on or after 1 October 2026. For breach of contract claims in England and Wales the six-month limit has applied since 1 October 2026 under S.I. 2026/759, where the effective date of termination is on or after that date. For breach of contract claims in Scotland the change is due to take effect on 9 November 2026. 

This one is easy to underestimate. A dismissal taking effect on or after 1 October 2026, which would once have been safe after three months, can now come back as a claim five or six months later, and ACAS early conciliation extends the clock further still, because the limitation period pauses while conciliation runs. In practice, a contentious exit in November can surface as a tribunal claim the following summer. 

Two practical consequences follow. Keep dismissal and disciplinary records complete and retrievable for longer, including the manager's notes, not just the formal letters, because memories will be a year old by the time a hearing arrives. And treat the months after any contentious exit as live risk, not closed history. Budgeting and insurance decisions that assumed a three-month exposure window are now working from the wrong number. 

30 October 2026: harassment duties stepped up 

Days before this article's publish date, two connected duties took effect. 

First, employers must now take "all reasonable steps" to prevent sexual harassment of their employees. This is a deliberate upgrade from the "reasonable steps" preventative duty that has applied since October 2024. The word "all" moves the bar. A dusty policy and a one-off training session will not meet it. Tribunals will ask what steps were available, and why any were not taken. 

Second, employers must not permit harassment of their staff by third parties: customers, patients, suppliers, members of the public. If your people serve the public, in hospitality, retail, care or trades, the behaviour of people who do not work for you is now your legal problem. 

The response that meets both duties is one piece of work, not two. Run a harassment risk assessment across roles and settings. Update the policy to cover third parties, and say what staff should do in the moment. Train managers on receiving complaints and acting on them. Record all of it, because the records are the evidence that the steps were taken. The Equality and Human Rights Commission's technical guidance on sexual harassment is the main reference point, with ACAS guidance alongside it. 

What "all reasonable steps" looks like in a small business is more concrete than the phrase suggests. A risk assessment that names the high-exposure situations, such as lone working, late shifts, visits to customer premises and work socials. A reporting route that does not run solely through the line manager, who may be the problem. Training with a date and an attendance record, refreshed rather than one-off. Action on complaints that is visible and consistent. A tribunal facing a claim will ask which of these existed on the day the harassment happened, and a reasonable step you could have taken but did not is now the measure of liability. 

October 2026 also brought a set of trade union measures, including a strengthened right for unions to access workplaces. Reinstating the two-tier code for public sector outsourcing was listed for October 2026 until the government timeline was updated on 25 September 2026, and that update gave it no new date. If you bid for public contracts or employ transferred public sector staff, watch for a new date and take specific advice before it lands. One union measure did not arrive in October. The duty to inform workers of their right to join a union was postponed in September 2026, and the government now intends it to start on 1 January 2027. The government will publish a standard statement that you may not change, except to add details about your workplace. Under the government's plans, which still need regulations, new starters will receive the statement at the same time as their written statement of particulars. Existing staff will need it once a year by 5 April if you give it to them directly. If you provide it indirectly, you will need to tell them where it is, keep it continuously and reasonably available, and remind them each year where to find it. 

The Employment Rights Act 2025 commencement table: what lands when 

Every date below is taken from the commencement regulations, the GOV.UK timeline update or, for the right-to-join statement, the government's consultation response, checked at the time of writing. Status is as at this article's publish date. Where a 2027 measure has no fixed date, that is because the government has not set one. 

Sources for the January 2027 entries: SI 2026/559, the fourth commencement regulations, and the GOV.UK timeline. The 1 January 2027 date for the right-to-join statement comes from the government's consultation response of 25 September 2026, and no commencement regulations have been made for it yet. The 2027 entries without fixed dates rest on the timeline alone and can move. 

The employment rights bill unfair dismissal changes: what 1 January 2027 really means 

This is the measure the whole employment rights bill debate circled for two years, and the enacted version needs precise reading, because the popular "day one rights" shorthand is wrong on the law as passed. 

From 1 January 2027, the qualifying period for ordinary unfair dismissal protection drops from two years to six months. On the same date, the cap on the compensatory award disappears. The current cap, £123,543 or a year's gross pay, whichever is lower, continues to apply to dismissals taking effect before then. The basic award still uses the capped week's pay figure of £751. 

Removing the cap deserves a moment, because it changes the ceiling on ordinary cases, not just the exceptional ones. Unfair dismissal compensation has two parts. The basic award works like statutory redundancy pay and stays capped through the £751 week's pay figure. The compensatory award covers actual losses, chiefly lost earnings while the person finds equivalent work. For most SME claims the compensatory element settles well below the current cap, and that will still be true in 2027. What disappears is the guarantee of a ceiling. A senior employee, a long job search, or a dismissal that also damages health can now produce an award limited only by proven loss. The cap was the reason unfair dismissal risk felt bounded. From January, the bound is gone. 

The transition rule is where December gets dangerous. SI 2026/559 applies the new regime by effective date of termination, not by the date notice is given. Hand an employee notice on 14 December 2026 with a four-week notice period, and their employment ends on 11 January 2027. That dismissal is judged under the new rules: six-month qualifying period, no compensation cap. What looked out of reach for a fifteen-month employee in December becomes a live claim in January. 

Three practitioner points follow, and they are the difference between reading the change and being ready for it. 

1. A large cohort of your current staff flips to protected status overnight. Anyone employed since roughly July 2026 or earlier, who is still with you on 1 January 2027 and past six months' service, gains unfair dismissal protection that morning. No new hire needed. Count how many of your people sit between six months' and two years' service and you have measured the change. 

1. If a genuine performance or conduct exit is already in progress this autumn, run the process properly and mind the effective date of termination. A fair process protects you under either regime. A rushed December dismissal designed to beat the deadline, with a notice period that pushes termination into January, achieves the worst of both. Dismissing without notice in late December is no safe route either: for the qualifying period, the law can treat employment as running to the end of the statutory minimum notice, which can carry it into January. 

1. From January, your probation process is your protection. With a six-month qualifying period, the decision to confirm or fail a probation is the last point at which parting company is low-risk. We advise real reviews at four weeks and three months, written standards, and a final decision no later than 19 weeks after the start date, not a diarised non-event. That holds with or without an extension. Week 19 leaves about seven weeks before six months of service complete. Leave room for notice: service counts up to the end of the notice period, and if you pay in lieu of notice, the law still adds one week's statutory notice when counting the six months. Most SMEs treat probation as paperwork; employers are more at risk from probationary periods than they think, and from January the cost of that habit rises sharply. For staff who pass six months, a disciplinary process that follows the ACAS Code step by step becomes the only safe route to dismissal. Our guide to unfair dismissal under two years' service explains the current position and the claims that never needed qualifying service, such as discrimination and whistleblowing, which remain day-one claims. 

The government timeline also puts the fire and rehire protections in January 2027, though no day had been fixed at the time of writing. Under section 28 of the Act, dismissing an employee for refusing a restricted variation, such as a pay cut, a change to the number of hours or a cut to leave, will be automatically unfair. So will dismissing them to re-engage or replace them on those varied terms. The exception is narrow: the employer must show the change was needed to tackle financial difficulties threatening the business as a going concern, and could not reasonably be avoided, and even then the dismissal must still be fair. If a restructure of terms is on your 2027 horizon, consultation and agreement become the only reliable route. ACAS guidance on changing employment contracts sets out the process that holds up. 

Still to come in 2027: prepare once, not twice 

The remaining measures arrive through regulations during 2027, most with consultation still to run. The sensible posture is to know what is coming, but not to rebuild policies until the detail is fixed. 

Zero-hours and low-hours rights. The right to guaranteed hours reflecting hours actually worked, reasonable notice of shifts, and payment for cancelled or curtailed shifts. Agency workers are in scope. Timings will be set after consultation. If casual staff are core to your model, start by getting the basics right today; holiday pay for zero-hours staff is where most existing errors sit, and it is already enforceable law. 

Flexible working. Further changes to the request regime are scheduled for 2027, tightening the grounds on which refusal is reasonable. The current rules, two requests a year and a two-month decision window, already trip up employers who treat requests informally. 

Bereavement leave. A new statutory right to bereavement leave, extending to pregnancy loss, arrives in 2027 through regulations. 

NDAs. Regulations will restrict confidentiality clauses that attempt to silence workers over harassment or discrimination. Settlement agreement templates will need revisiting once the detail lands. 

Umbrella companies and the collective consultation threshold. Umbrella arrangements come under regulation, and the rules on when collective consultation obligations trigger across multiple sites will change. Both matter to specific business models rather than to every reader. 

Mandatory action plans and pregnancy protections. The voluntary gender equality and menopause action plans become mandatory for larger employers, and enhanced dismissal protections for pregnant women and new mothers arrive through regulations. 

Each of these will get a dedicated update on this site when its regulations are made, in the same way this pillar links to the dated updates that preceded it. 

What to do between now and January 2027: the five-move plan 

Every measure above lands on the same small group of documents and habits. Five moves cover the ground. 

1. Absence management reset. Day-one SSP has been raising the cost of short absence since April. Return-to-work conversations after every absence, and a manager who actually reviews patterns, are the controls that pay for themselves. 

1. One contracts-and-handbook pass. Family leave, sickness, harassment and third-party harassment, union rights statements, holiday records. One coordinated update against a checklist beats six piecemeal edits. Our employee handbook legal compliance checklist is the working document for that pass. 

1. A probation process with teeth, built before January. Our advice: written standards, reviews at four weeks and three months, and a confirm-or-fail decision no later than week 19, extension or not. This is the single highest-value piece of work on the list. 

1. Harassment risk assessment, done and documented. The "all reasonable steps" duty is already in force. The risk assessment, updated policy and manager training need to exist now, and the paper trail is the point. 

1. A named owner and a diary. Someone in the business owns the GOV.UK timeline page, checks it monthly, and flags each 2027 consultation as it opens. The businesses that struggled in April 2026 were the ones for whom every date was a surprise. 

Each move produces a document: an absence log with return-to-work notes, a dated handbook version, probation review templates on file, a harassment risk assessment with a training register, and a rolling compliance diary. That paper trail is not bureaucracy for its own sake. Under this Act, the evidence that you did the work is the protection, whether the audience is a tribunal, the Fair Work Agency, or an employee's solicitor reading your disclosure bundle. 

Frequently asked questions

What parts of the Employment Rights Act 2025 are already in force?

Several, in stages. Statutory sick pay from day one, day-one paternity and unpaid parental leave, a doubled collective redundancy protective award and a six-year holiday records duty all began on 6 April 2026. The Fair Work Agency started on 7 April 2026, and the six-month tribunal time limit began on 1 October 2026.

What changes for employers in October 2026?

Two things. From 1 October 2026 the time limit for most tribunal claims rose from three months to six, for acts, or dismissals taking effect, on or after that date. From 30 October 2026 employers must take all reasonable steps to prevent sexual harassment and must not permit harassment of staff by third parties such as customers.

What changes on 1 January 2027 under the Employment Rights Act 2025?

The qualifying period for ordinary unfair dismissal drops from two years to six months, and the cap on the compensatory award is removed, both scheduled for 1 January 2027. The duty to inform workers of their right to join a union is intended for that date, and fire and rehire protections are expected in January 2027, with regulations pending.

What is the Fair Work Agency and what can it ask an employer for?

The Fair Work Agency is a single state enforcement body for employment rights, operational since 7 April 2026. It has powers to demand documents, enter premises and issue notices of underpayment. The records that matter most are six years of holiday entitlement and pay records, itemised payslips, SSP payment records and right to work evidence.

Which contracts and policies need updating because of the Employment Rights Act 2025?

Family leave, sickness, harassment and third-party harassment, union rights statements and holiday records all need checking. One coordinated update against a checklist beats six piecemeal edits. Family leave policies written before 2026 are wrong on day-one paternity leave and unpaid parental leave, because the qualifying periods were removed on 6 April 2026.

How big can a protective award be after the Employment Rights Act 2025?

Section 30 raised the maximum protective award from 90 to 180 days' pay per affected employee, in force from 6 April 2026. It applies if you propose 20 or more redundancies at one establishment within 90 days and get the consultation wrong. The consultation windows and HR1 filing duties have not changed.

Where does your business stand against all of this? 

Working through this Act measure by measure takes time most owners do not have, and the risk sits in the gaps you cannot see from inside the business. The free HR Health Check lets you know where you stand across the areas this Act touches, from contracts and absence to dismissal risk, in under a minute. Take it at /HR-Health-Check and you will have a clear picture of your starting point before the January changes arrive.