The UK Employment Rights Act 2025 (the “ERA 2025”) has now received Royal Assent. The ERA 2025 will introduce the most significant changes to UK employment law in over a decade. The reforms will affect all organisations with UK staff and will require changes to employment documentation, policies, and processes in the coming months.

The key changes and the practical steps employers should consider are as follows:

Unfair dismissal risk and compensation

• The qualifying period for unfair dismissal will reduce from two years to six months. This will significantly affect how employers manage exits for newer employees. Employers will need to revisit the use of probationary periods, performance management and notice periods for new hires.
• The current cap on unfair dismissal compensation will be removed. This will increase potential exposure, particularly for senior employees and high earners.

Earlier and “day one” rights

• There will be new day one rights to paternity leave and unpaid parental leave, and expanded bereavement leave.
• Statutory sick pay will become payable from day one of absence and without the current lower earnings limit.
• These changes will widen eligibility across workforces (notably for junior and support staff).

Pregnancy and maternity rights

• Protections against dismissal for pregnant workers and those individuals who have returned from maternity leave will be strengthened. Employers will need to review their redundancy selection processes, dismissal...

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