What's actually changing
The Employment Rights Act 2025 received Royal Assent on 18 December 2025. Here's every change that matters, when it hits, and what it means for your business.
The full timeline
Changes are rolling out in waves. Some are already live. Others don't land until 2027. Here's the complete picture:
Paternity leave notice period reduced
Notice period for paternity leave temporarily reduced from 15 weeks to 28 days. Already in effect.
The big wave
SSP from day 1. Paternity leave from day 1. Parental leave from day 1. Collective redundancy penalties doubled. Whistleblowing expanded. Trade union recognition simplified.
Fair Work Agency launches
New enforcement body with powers to inspect workplaces, issue penalties up to 200% of underpayments, and bring tribunal claims on behalf of workers.
Consultations conclude
Government finalises regulations on zero-hours contracts, guaranteed hours, shift notice requirements.
The second wave
Unfair dismissal qualifying period drops from 2 years to 6 months. Fire and rehire becomes automatically unfair. Compensation cap removed.
Zero-hours reforms
Right to guaranteed hours. Right to reasonable shift notice. Compensation for cancelled shifts. Expected to come into force during 2027.
Who this affects
Every employer in England, Scotland, and Wales. There's no small business exemption. Whether you've got 2 employees or 2,000, these changes apply to you.
Why this matters more than previous employment law changes
Previous changes to employment law usually tweaked one thing at a time. A rate increase here, a new regulation there. This act changes everything at once: sick pay, leave entitlements, dismissal rules, enforcement, contract structures, and tribunal powers.
The real game-changer is the Fair Work Agency. For the first time, there's a single body with the power and budget to proactively inspect employers — not just respond to complaints. Think of it as Ofsted for workplaces. They can walk in, demand records, and issue penalties of up to 200% of any underpayment they find.
The removal of the unfair dismissal compensation cap is also enormous. Under the old rules, the maximum basic award for unfair dismissal was capped. From January 2027, that cap goes. Combined with a 6-month qualifying period instead of 2 years, this fundamentally changes the risk calculation of letting someone go.
Where to start
Don't panic. Work through this navigator stage by stage:
Stage 2 breaks down every April 2026 change in detail — what's changing, the legal basis, and what it means in practice.
Stage 3 runs a personalised assessment of your business — answer a few questions and get a tailored impact report.
Stage 4 gives you an action plan with tick-off checklists.
Stage 5 has template letters and policy documents you can download and use.
Stage 6 covers the January 2027 changes (unfair dismissal, fire and rehire, zero-hours).
Stage 7 covers ongoing compliance and preparing for Fair Work Agency inspections.
April 2026 — every change explained
These changes take effect from 6 April 2026 (Fair Work Agency on 7 April). Here's exactly what each one means.
Statutory Sick Pay — day one, no earnings floor
What's changing: SSP is currently payable from the 4th day of sickness (3 "waiting days"). From 6 April 2026, SSP is payable from day 1. The lower earnings limit (currently £125/week) is also abolished — everyone gets SSP regardless of what they earn.
The new rate: £125.25 per week from April 2026. But for employees earning less than £125.25/week, they get 80% of their normal weekly earnings instead. So someone earning £100/week gets £80/week SSP.
What you need to do:
- Update your sickness absence policy to remove references to "waiting days"
- Update employee handbook language about SSP eligibility
- Confirm your payroll system can handle the new low-earner 80% calculation
- Review any contractual sick pay schemes to check alignment with new SSP rules
- Budget for increased SSP costs (especially if you have high short-term absence rates)
- Notify employees of the change (template in Stage 5)
Paternity leave — day-one right
What's changing: Currently, employees need 26 weeks' continuous service to qualify for paternity leave. From 6 April 2026, it's a day-one right. Someone can start on Monday and be eligible for paternity leave by Tuesday.
Notice period: The notice period has been temporarily reduced from 15 weeks to 28 days before the expected week of childbirth. This is already in effect since 18 February 2026.
What this means for you: You can no longer tell a new employee "you haven't been here long enough for paternity leave." You need to build paternity leave into your workforce planning from day one of any new hire, regardless of their length of service.
What you need to do:
- Update paternity leave policy to remove 26-week qualifying period
- Update offer letters and contracts that reference paternity leave eligibility
- Brief line managers that new starters are eligible from day one
- Update any HR system rules that auto-reject paternity leave for new starters
Unpaid parental leave — day-one right
What's changing: Unpaid parental leave currently requires 1 year's continuous service. From 6 April 2026, it's available from day one. Each parent can take up to 18 weeks' unpaid leave per child (up to their 18th birthday), in blocks of up to 4 weeks per year.
What you need to do:
- Update parental leave policy to remove 1-year qualifying period
- Ensure managers know they can postpone (not refuse) leave if business needs require it
- Update contracts and handbooks
Collective redundancy — penalties doubled
What's changing: The maximum "protective award" for failing to properly consult in a collective redundancy situation doubles from 90 days' pay to 180 days' pay per affected employee. This applies from 6 April 2026.
What triggers collective redundancy obligations: Proposing to dismiss 20 or more employees at one establishment within a 90-day period. The Act also extends the calculation across the entire business, not per establishment.
What you need to do:
- Review your redundancy procedure to ensure full consultation compliance
- Ensure you understand the 45-day consultation period for 100+ redundancies
- Get legal advice before any collective redundancy situation — the stakes just doubled
Whistleblowing — sexual harassment added
What's changing: Sexual harassment now becomes a "qualifying disclosure" under whistleblowing law. Employees who report sexual harassment are protected from detriment and unfair dismissal as whistleblowers — giving them significantly stronger legal protection than a standard grievance.
What you need to do:
- Update your whistleblowing policy to explicitly include sexual harassment
- Train managers on the enhanced protections for sexual harassment reporters
- Review your sexual harassment policy and complaint procedures
The Fair Work Agency — workplace Ofsted
What it is: A new enforcement body launching 7 April 2026 that merges HMRC's NMW enforcement, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate into a single agency under the Department for Business and Trade.
What it can do:
Inspect workplaces proactively — they don't need a complaint. Require employers to produce records and evidence of compliance. Issue Notices of Underpayment for NMW, holiday pay, and SSP. Impose penalties of up to 200% of any underpayment. Bring employment tribunal claims on behalf of workers. Name and shame non-compliant employers publicly. Recover their own enforcement costs from the employer.
Stage 7 covers exactly how to prepare for a Fair Work Agency inspection.
Assess your business
Answer 5 quick questions. Get a personalised impact report showing exactly what you need to worry about and what you can probably relax on.
How many employees do you have?
Headcount, not FTE. Include part-timers and zero-hours workers on your books.
What types of contracts do you use?
Select all that apply.
Which of these do you currently have in place?
Be honest — no one's judging. Select all that apply.
What's your hiring situation?
This helps us assess the unfair dismissal impact.
What sector are you in?
Some sectors are hit harder than others.
Your action plan
Tick these off as you go. Progress is saved in your browser. When everything's checked, you're compliant.
Do this week (before 6 April)
- Update SSP policy: remove 3-day waiting period, add day-one eligibility, add low-earner 80% rate
- Update paternity leave policy: remove 26-week qualifying period, state day-one entitlement
- Update parental leave policy: remove 1-year qualifying period, state day-one entitlement
- Contact payroll provider to confirm SSP system update for low-earner calculations
- Draft employee notification about policy changes (template in Stage 5)
- Check any contractual sick pay schemes for references to SSP waiting days
- Brief all line managers on the changes — they need to know before employees ask
Do this month (April 2026)
- Send employee notification letter about all April changes
- Update employee handbook (or create one if you don't have one)
- Update whistleblowing policy to include sexual harassment as qualifying disclosure
- Review and update all template contracts for new starters
- Audit your holiday pay calculations — the FWA will be checking these
- Audit your NMW compliance — are all workers genuinely above NMW after deductions?
- Check SSP records are being kept properly — the FWA can demand them
- Review collective redundancy procedures if you have 20+ employees
Do by summer 2026
- Review your probation process — anyone hired from end of June gains unfair dismissal protection from Jan 2027
- Set up robust performance management from day one for all new hires
- Document all performance issues properly — verbal warnings aren't enough anymore
- Review any zero-hours contracts — guaranteed hours obligations coming in 2027
- Consider converting zero-hours workers to minimum-hours contracts proactively
- Budget for potential SSP cost increases based on Q1 sickness data
- Train managers on proper dismissal procedures ahead of the qualifying period change
Do by end of 2026
- Prepare for unfair dismissal changes (1 Jan 2027) — review all employees with less than 2 years' service
- Prepare for fire and rehire ban — if you were considering restructuring, do it properly now
- Review all zero-hours arrangements ahead of guaranteed hours obligations
- Ensure all employee files have proper documentation — performance reviews, warnings, goals
- Budget for increased tribunal exposure — the compensation cap is being removed
- Consider employment practices liability insurance if you don't already have it
Template documents
Fill in your details, preview the document, and download as PDF. Edit them to fit your business — these are starting points, not one-size-fits-all.
Employee notification letter — April 2026 changes
Send this to all employees to notify them of the April 2026 policy changes. Covers SSP, paternity leave, and parental leave changes.
[Your letter preview will appear here as you fill in the fields above]
Manager briefing — what's changing and what to tell your team
Give this to all line managers and team leaders. Plain English summary of what's changed, what they need to do differently, and answers to questions their team will ask.
[Your briefing preview will appear here]
SSP policy update wording
Replacement wording for your sickness absence / SSP policy. Remove your existing SSP section and replace with this.
Statutory Sick Pay (SSP)
If you are absent from work due to illness or injury, you are entitled to Statutory Sick Pay (SSP) from the first day of your absence, provided you meet the qualifying conditions.
Eligibility: All employees are eligible for SSP regardless of earnings level. There is no minimum earnings threshold and no waiting period.
Rate: SSP is paid at the current statutory rate, or 80% of your normal weekly earnings if that is lower than the statutory rate. The applicable rate will be calculated by payroll.
Duration: SSP is payable for up to 28 weeks in any period of incapacity for work.
Notification: You must notify your manager of your absence as soon as reasonably practicable and no later than [insert your notification deadline, e.g. "one hour before your shift is due to start"].
Evidence: For absences of 7 calendar days or fewer, self-certification is sufficient. For absences exceeding 7 calendar days, you must provide a fit note from your GP or other qualified medical professional.
Policy updated to reflect changes introduced by the Employment Rights Act 2025, effective 6 April 2026.
Paternity leave policy update wording
Replacement wording for your paternity leave policy.
Paternity Leave
Eligible employees are entitled to up to two weeks' paternity leave following the birth or adoption of a child. This is a day-one right — there is no qualifying period of employment.
Eligibility: All employees are eligible for paternity leave from their first day of employment, provided they are the biological father, the mother's spouse or partner, or the intended parent in a surrogacy arrangement.
Notice: You must give at least 28 days' notice before the expected week of childbirth (or placement for adoption).
When to take it: Paternity leave must be taken within 56 days of the birth (or placement). It can be taken as one block of two weeks, or two separate blocks of one week.
Pay: Statutory Paternity Pay (SPP) is paid at the current statutory rate, or 90% of your average weekly earnings if that is lower. To qualify for SPP, you must have average weekly earnings at or above the Lower Earnings Limit.
Policy updated to reflect changes introduced by the Employment Rights Act 2025, effective 6 April 2026.
Parental leave policy update wording
Replacement wording for your parental leave policy.
Unpaid Parental Leave
All employees with parental responsibility for a child are entitled to unpaid parental leave from their first day of employment. There is no qualifying period.
Entitlement: Up to 18 weeks' unpaid leave per child, up to the child's 18th birthday. A maximum of 4 weeks may be taken in any one year per child.
Notice: You must give at least 21 days' written notice before the date you wish to start parental leave.
Postponement: The company may postpone your leave for up to 6 months if the requested dates would cause significant disruption to the business. Postponement must be agreed in writing and alternative dates offered. Leave cannot be postponed if it is requested immediately after the birth or adoption of a child.
Terms during leave: Your contract of employment continues during parental leave. You are entitled to return to the same job after a period of 4 weeks or less.
Policy updated to reflect changes introduced by the Employment Rights Act 2025, effective 6 April 2026.
FWA inspection readiness checklist
Print this and keep it where you can find it. If the Fair Work Agency comes knocking, these are the records and documents they can demand.
Fair Work Agency Inspection Readiness Checklist
Documents the FWA can request:
☐ Payroll records for all employees (past 3 years)
☐ NMW calculations showing compliance for every worker
☐ Holiday pay calculations and records of holiday taken
☐ SSP records — dates of absence, amounts paid, eligibility calculations
☐ Employment contracts for all current employees
☐ Working time records (hours worked per week)
☐ Right to work documentation
☐ Itemised pay statements provided to all employees
☐ Evidence of auto-enrolment pension compliance
☐ Records of any deductions from wages
Common FWA findings (get ahead of these):
☐ Workers paid NMW but required to buy uniforms (reduces effective pay below NMW)
☐ Unpaid travel time between sites that should count as working time
☐ Holiday pay calculated on basic pay only, not including regular overtime/commission
☐ Workers classified as self-employed who should be employees
☐ SSP not paid to low-earners who are now eligible from day one
January 2027 — the second wave
These changes are further out but arguably bigger. Start preparing now.
Unfair dismissal — 6 months, not 2 years
What's changing: The qualifying period for unfair dismissal claims drops from 2 years to 6 months, effective 1 January 2027. The statutory cap on unfair dismissal compensation is also being removed.
What happened to the "initial period of employment"?
The original bill proposed a statutory probation period with a lighter-touch dismissal process. The House of Lords killed it. There's no simplified process for new starters — from 6 months, they have full unfair dismissal rights, period. You need a fair reason and a fair process, same as any other employee.
The five fair reasons for dismissal: Capability (including performance), conduct, redundancy, breach of statutory restriction, and "some other substantial reason" (SOSR). If you can't point to one of these and show you followed a fair process, you lose the tribunal.
What you need to do:
- Review your probation process — it now needs to generate proper documentation from day one
- Set clear objectives for all new hires within their first week
- Schedule formal check-ins at 1 month, 3 months, and 5 months
- Document all performance conversations in writing (email confirmations count)
- Train managers on the ACAS Code of Practice on disciplinary and grievance procedures
- Review your dismissal procedures — are they tribunal-proof?
- Consider employment practices liability insurance
Fire and rehire — automatically unfair
What's changing: From 1 January 2027, dismissing an employee and rehiring them on worse terms (fire and rehire) becomes automatically unfair dismissal. No need to prove the dismissal was unfair — it's unfair by default.
What if you genuinely need to change terms?
You'll need to negotiate genuinely. That means proper consultation with employees (or trade unions if recognised), a legitimate business reason, offering reasonable alternatives, and documenting every step. If an employee refuses the new terms, you cannot simply dismiss and re-offer.
What you need to do:
- If you're considering restructuring that involves changing terms — get legal advice now
- Review any contracts with terms you might want to change in future
- Ensure you have proper consultation processes documented
Zero-hours contracts — guaranteed hours coming
What's changing: Workers on zero-hours or low-hours contracts who regularly work more than their contracted minimum will gain the right to be offered a guaranteed-hours contract reflecting their actual working pattern.
How it works: At the end of every "reference period" (expected to be 12 weeks), employers must offer a contract that reflects the hours actually worked. Workers can accept or reject the offer — and it's automatically unfair to dismiss them for either decision.
Workers also gain the right to reasonable notice of shifts and compensation for cancelled or changed shifts.
What you need to do now:
- Audit all zero-hours contracts — how many workers regularly work consistent patterns?
- Consider proactively offering minimum-hours contracts to regular workers
- Review shift scheduling processes — you'll need to give reasonable notice
- Budget for shift cancellation compensation costs
- Watch for the autumn 2026 consultation results
Staying compliant
You've made the changes. Now keep them. The Fair Work Agency isn't going away.
What a Fair Work Agency inspection looks like
The FWA can inspect any employer proactively — they don't need a complaint. Here's what to expect.
What triggers an inspection: Random selection, sector-wide sweeps (hospitality and care are likely early targets), whistleblower complaints, patterns in HMRC data, or follow-up from previous issues.
What they'll ask for: Payroll records (past 3 years), NMW calculations, holiday pay calculations, SSP records, employment contracts, working time records, right to work documents, itemised pay statements, pension auto-enrolment evidence.
What happens if they find problems: They issue a Notice of Underpayment requiring back pay within 28 days. They can impose a penalty of up to 200% of the underpayment. They can publicly name you. They can bring tribunal claims on behalf of your workers. And they can recover their enforcement costs from you.
Records you must keep
- Payroll records — 3 years minimum, ideally 6
- NMW calculations for every worker — show the hourly rate after any deductions
- Holiday pay records — accrual, taken, paid. Include any regular overtime in the calculation
- SSP records — dates of sickness absence, eligibility determination, amounts paid
- Employment contracts — signed copies for every employee
- Working time records — hours worked per week, opt-out agreements if applicable
- Right to work checks — copies of documents, dates of checks
- Disciplinary and grievance records — notes, outcomes, appeals
- Performance review records — especially important for first 6 months of new hires
- Training records — including manager training on new employment rights
Common mistakes that trigger penalties
These are the issues the FWA (and its predecessor bodies) find most often.
Where to get help
ACAS (Advisory, Conciliation and Arbitration Service): Free, impartial advice on employment law. Phone: 0300 123 1100 (Monday to Friday, 8am to 6pm). Website: acas.org.uk
Gov.uk employment section: Official guidance on all statutory entitlements. gov.uk/browse/employing-people
Citizens Advice Bureau: Free advice for both employers and employees. citizensadvice.org.uk
When to get a solicitor: If you're facing a tribunal claim, planning redundancies of 20+ people, restructuring contracts, or if the FWA has contacted you about an inspection. Don't try to wing it — the stakes are too high under the new rules.