Employment Act 2025 – what this means for employers in 2026

The Employment Rights Act 2025 (“the ERA 2025”) received Royal Assent on 18 December 2025, fundamentally altering the employment law landscape.

This article summarises the key provisions expected to affect employers in 2026 and highlights practical steps employers should consider.

Trade Unions

The ERA 2025 contains provisions affecting trade union rights which will impact both unionised and non-unionised employers.

What has already changed? Repeal of the Strikes (Minimum Service Levels) Act 2023

On 18 December 2025, the ERA 2025 repealed the Strikes (Minimum Service Levels) Act 2023 which enabled the Secretary of State to set minimum service levels for strikes in “relevant services” in the fields of health, transport, education, fire and rescue, border control, and nuclear decommissioning and radioactive waste management services. The repeal means that all associated powers, regulations and defined terms relating to minimum service levels cease to apply.

In force 18 February 2026 – strengthened protections against blacklisting

Before the ERA 2025, the law allowed the Secretary of State to ban the creation of lists that employers or employment agencies (which can include recruitment agencies) might use to discriminate against people when hiring or managing staff.

The ERA 2025 removes the words “By employers or employment agencies” and it will enable the Secretary of State to be able to make laws to prohibit:

• the use of lists which contain details of members of trade unions, or persons who have taken part in the activities of trade unions, for the purposes of discrimination in relation to recruitment or in relation to the treatment of workers; and
• the sale or supply of such lists with a view to being used for those purposes.

In force 18 February 2026  – industrial action

Notice of industrial action must be provided to the employer by the trade union after it has secured a ballot mandate before any action is taken. The ERA 2025 will reduce the notice of industrial action from 14 days to 10 days.

The ERA 2025 will also reduce the information a union must include on the ballot notice and sample voting papers to employers, as well as reducing the information  the union must provide to a member with ballot results.

Further, union member support for industrial action will automatically expire after 12 months – it was previously 6 months subject to extension.  Unions will also no longer be required to supervise picketing.

Expected October 2026

From October 2026, further reforms regarding trade unions are anticipated, including:

• A new right for qualifying trade unions to access workplaces physically and by communication with workers.
• Employers to give workers a written statement advising that they have a right to join a trade union.
• A simplified path to union recognition, including removal of the turnout threshold for ballots.
• Right to time off and facilities for union equality representatives. The change provides:

“An employer that permits an employee to take time off as required by this section must, where requested by the employee, provide the employee with such accommodation and other facilities for carrying out the duties or undergoing the training for which the employee takes time off as is reasonable in all the circumstances, having regard to any relevant provisions of a Code of Practice issued by Acas.”

This will however require commencement regulations and an Acas Code of Practice.

Protection against detriment for taking industrial action. This will however require further substantive regulations and the government intends to launch a consultation with a view to bringing measures into force in October 2026.

Practical points:

• Expect an increase in operation challenges and legal risks for industrial action.
• Review internal industrial relations strategy and dispute resolution procedures to check they are fit for purpose.
• Review existing relationships with a view to building an effective and strong industrial relations framework.
• Train managers on handling the potential increased union presence and workplace access.
• Review data privacy, confidentiality, and health and safety protocols for third‑party access to premises.
• Contracts of employment and other written particulars should be updated to incorporate the duty to inform, once the final details are confirmed.
• Employers with existing time off arrangements will need to review policies, and how they are implemented locally by managers, to comply.

Family Leave Reform (April 2026)

Under current law, employees must have at least 26 weeks’ continuous service by the 15^th week before the expected week of childbirth to qualify for statutory paternity leave. For unpaid parental leave, an employee needs one year’s service at the time the leave begins.

Coming into force on 6 April 2026, unpaid leave will become a day one right for eligible employees for paternity leave. This means new parents can take leave as soon as they start employment.

For eligible employers, paternity leave also becomes a day one right.

However, although paternity leave itself becomes available from day one, the eligibility criteria for statutory paternity pay – a minimum of 26 weeks’ service by the 15th week before the due date – will remain unchanged.

Additionally, paternity leave can be used either before or after shared parental leave, giving much greater flexibility.

Practical points:

• A wider pool of employees, including those in probation, will be eligible to take leave.
• HR and managers should plan for increased leave requests from new starters.
• Policies and procedures should be updated ahead of April.

While the financial impact may be minimal (because statutory pay rules remain unchanged), operational disruption could increase.

Harassment

Duty to take all reasonable steps to prevent sexual harassment

Currently, the Equality Act 2010 requires employers to take reasonable steps to prevent sexual harassment of their employees during the course of their employment. Expected in October 2026, the ERA 2025 will amend the Equality Act 2010 to require employers to take “all reasonable steps” to prevent sexual harassment.

Additionally, expected in October 2026, employers will be under a duty to take “all reasonable steps” to prevent third-party harassment in relation to all relevant protected characteristics. This means that in addition to an employer being prohibited from harassing their own employees or job applicants, employers must also not permit a third party to harass their employees. A “third party” is a person other than the employer or one of its employees.

Practical points:

• The duty to take all reasonable steps to prevent sexual harassment for employees, including by third parties, will be onerous on employers.
• It will be important to at least carry out/update training, complete staff surveys and create/review any relevant polices.

Statutory Sick Pay Reform (April 2026)

Currently, SSP is only payable from the fourth day of illness, and employees must earn at least £125 per week to qualify. The rate is currently £118.75 per week or 80% of the employee’s average weekly earnings, whichever is lower.

From April 2026, SSP becomes payable from day one (rather than day four) and the lower earnings limit (£125 per week) is removed, making many more workers eligible.

Practical points:

• Budgeting and forecasting will need to take account of possible cost increases.
• As SSP will now be payable from day one, employers may have to contend with a hike in single day absences. Although the reform aims to reduce long‑term sickness.
• Absence management processes should be reviewed.
• Payroll systems and HR teams should prepare to calculate SSP correctly.
• Clear internal communication to managers and employees is recommended so that expectations are clear and compliance is maintained.

Employment Tribunal time limits (From December 2025 and October 2026)

The ERA brings structural changes aimed at relieving pressure on Acas and Employment Tribunals.

Currently, employees have three months from the date of the alleged breach to make a claim. Before lodging a claim, employees are required to go through ACAS Early Conciliation, which paused the limitation period for up to six weeks.

Since December 2025, Early Conciliation period was extended to 12 weeks, giving parties more time to resolve disputes before formal proceedings. It is understood that the 12 week period will be reviewed in October 2026 to decide on its effectiveness.

Effective from October 2026, the time limit for lodging most tribunal claims will be extended from three months to six months. This is a significant change giving more flexibility to employees and reduces the pressure to submit the claim quickly.

Practical points:

• A likely increase in claims: employees will have more time to seek advice and prepare their case.
• DSARs (data subject access requests) will become more strategically significant: employees may obtain documents in time to inform a claim within the extended limitation window.
• Employers will need to keep accurate records for longer periods to defend claims effectively. This includes disciplinary notes, grievance records, and correspondence relating to employment decisions.

Managers should be reminded of the importance of robust record keeping and proactive risk management.

2027 significant changes

The most significant changes won’t come into force until January 2027. They are

1. the requirement for an unfair dismissal claim to be continuously employed for two years being reduced to six months;
2. the removal of the cap on compensation for unfair dismissal claims; and
3. the right to guaranteed hours and shift scheduling.

This means that anyone being recruited in the second part of 2026 will have these enhanced rights making effective monitoring of performance and efficiency of those staff key at an early stage.

Preparing for a transformative year

The ERA 2025 introduces some of the most wide‑ranging reforms in recent memory. While not all measures take effect in 2026, the majority of significant changes (particularly in relation to trade union law, family leave, sick pay, and tribunal deadlines) will.

For employers, priorities for 2026 should include:

• Updating policies and contractual documentation.
• Training managers on new rights and obligations.
• Reviewing industrial relations strategies and workforce planning.
• Strengthening documentation and record-keeping processes.
• Ensuring payroll and HR systems are prepared for new entitlements.

Keeping ahead of these changes will not only ensure compliance but also place businesses in a stronger position to manage risk and support their employees through a shifting legal landscape.

How we can help

If you would like to discuss how this issue might impact you or your business, please contact our Employment Law Solicitor, Annabelle Cowie.