The Employment Rights Act 2025: What UK Employers Need to Do Before October

The Employment Rights Act 2025 received Royal Assent on 18 December 2025. Prime Minister Keir Starmer described it as the biggest upgrade to workers’ rights in a generation, and its reforms are now being introduced in stages as part of Labour’s Plan to Make Work Pay. Some of the first changes came into force in April 2026, including new rules on Statutory Sick Pay, collective redundancies and family leave. The next major point in the timetable is 1 October 2026, when a broader and more significant group of reforms is expected to take effect. For many employers, October will be the point at which the Act begins to have a more visible impact on day-to-day decisions, workplace disputes and the risks attached to existing policies and contracts. ## Tribunal claims will have a longer life One of the most important changes is the extension of employment tribunal time limits from three months to six months for all types of claims, apart from breach of contract claims arising or outstanding on termination. The Government has published draft Regulations bringing the measure into force on 1 October 2026. The new six-month period will apply where the event giving rise to the claim takes place on or after that date. This matters because the mandatory ACAS Early Conciliation period has also recently increased from six to twelve weeks. Together, the two changes mean that employers may wait much longer before knowing whether a workplace dispute has developed into a tribunal claim. Employees and workers will also have more time to seek advice and decide whether to proceed. Claims that might previously have fallen away because the three-month deadline was missed may now be more likely to reach a tribunal. That shift has obvious implications for record-keeping. Disciplinary documents, grievance records, performance management notes and the reasoning behind employment decisions may need to be available for longer than many businesses are currently used to. ## The harassment duty becomes more demanding Since October 2024, employers have been required to take reasonable steps to prevent sexual harassment of their workers. From October 2026, the wording changes to all reasonable steps. The Act also introduces liability for harassment by third parties, including customers, clients and suppliers. This covers sexual harassment as well as harassment related to age, disability, religion or belief, sex and sexual orientation. The difference between reasonable steps and all reasonable steps is significant. It raises the standard expected of employers and places greater emphasis on whether risks were properly identified and addressed before an incident occurred. A failure to comply will not create a standalone claim. However, where an employee succeeds in a sexual harassment claim, a tribunal may increase compensation by 25 per cent. The Equality and Human Rights Commission may also take enforcement action. Third-party harassment is likely to be particularly important for organisations whose staff regularly deal with members of the public, clients or external contractors. A single incident may be enough to establish liability unless the employer can show that all reasonable steps were taken to prevent it. For businesses in hospitality, retail and professional services, this may expose gaps in policies that currently focus almost entirely on behaviour between colleagues. ## Fire and rehire is delayed, but not far away The Act will make it automatically unfair to dismiss an employee for refusing a restricted variation to their employment contract. Restricted variations include changes to pay, working hours, holiday entitlement, pensions and clauses allowing unilateral contractual changes, together with other terms to be set out in regulations. It will also be automatically unfair to dismiss someone where the principal reason is to employ another person to carry out substantially the same work, or to rehire the dismissed employee on new terms containing the restricted variation. There are limited exceptions where an employer can demonstrate genuine financial difficulty and show that the proposed variation was genuinely unavoidable. These restrictions were originally expected in October 2026, but the Government’s revised timetable, published in February, moved them to January 2027. Even so, October remains relevant because inserting or amending contractual variation clauses before then will not amount to a restricted variation, whereas doing so afterwards will. Existing contracts and variation clauses may therefore come under much closer scrutiny over the coming months. ## Trade union rights expand October also brings a substantial extension of trade union rights. Employers will have a new duty to inform workers of their right to join a union. Trade unions will gain broader rights of access to workplaces, both physically and electronically, for purposes including recruitment, collective bargaining and other recognised union activity. Trade union representatives will also gain rights to reasonable accommodation and facilities when carrying out their duties, while union equality representatives will have a new right to time off. These changes are not limited in practical significance to workplaces where a union is already recognised. Employers without an existing union presence may also need to consider how they would respond to an approach under the new access arrangements. ## Tipping policies come under review The changes to tipping law are less prominent, but they will matter to hospitality and service businesses. From October, employers will be required to consult workers or their representatives before creating a tipping policy and each time it is reviewed, which must happen every three years. An anonymised summary of the views expressed during that consultation must also be made available to everyone covered by the policy. ## What has already changed Several important measures have been in force since April 2026. Sexual harassment became a qualifying disclosure under whistleblowing law on 6 April, giving workers who report it protection from detriment and unfair dismissal. From 1 April, the National Minimum Wage increased to £12.71 an hour for workers aged 21 and over, £10.85 for those aged 18 to 20, and £8.00 for 16 and 17-year-olds and apprentices. The maximum protective award for failing to consult properly on collective redundancies doubled from 90 to 180 days’ actual pay per employee. Statutory Sick Pay also became payable from the first day of sickness absence. The Lower Earnings Limit and the three-day waiting period were removed, with SSP now payable at the lower of the fixed flat rate or 80 per cent of weekly earnings. Day-one rights to Paternity Leave and Unpaid Parental Leave came into force at the same time. A new Bereaved Partner’s Paternity Leave right also allows bereaved fathers and partners to take up to 52 weeks of paternity leave where the mother or primary adopter dies within the child’s first year. ## January 2027 will bring the next major shift The qualifying period for unfair dismissal protection will fall from two years to six months in January 2027, and the cap on compensatory awards will be removed entirely. An employee with six months and one day of service will therefore be able to bring an unfair dismissal claim. The delayed fire and rehire restrictions will also take effect at that point. For employers, the combined effect of the October and January changes is likely to be substantial. Tribunal claims will remain open for longer, harassment duties will become more exacting and relatively new employees will gain unfair dismissal protection far earlier than they do now. For employment law solicitors, the direction of travel is equally clear. More employers are likely to seek advice before making difficult decisions, rather than waiting until a dispute has already escalated. Sources Acas: Employment Rights Act 2025 www.acas.org.uk/employment-rights-act-2025 Acas: Early Conciliation www.acas.org.uk/early-conciliation UK Government: Employment Rights Act 2025, full legislation www.legislation.gov.uk/ukpga/2025/18/contents UK Government: National Minimum Wage Rates www.gov.uk/national-minimum-wage-rates UK Government: Statutory Sick Pay www.gov.uk/statutory-sick-pay UK Government: Paternity Leave www.gov.uk/paternity-pay-leave UK Parliament: Employment Rights Act 2025, Parliamentary passage and debate www.parliament.uk/business/news/crime-civil-law-justice-and-rights