Employment Rights Act - which policies should you update

The Employment Rights Act 2025 packs an imposing number of reforms into its 289 pages. Despite its length and complexity it will function mainly as a framework and its full practical effects will only become clear once the relevant regulations, codes of practice and updated guidance have been published.

The Government has confirmed that the reforms will be introduced in phases. Some provisions took effect on Royal Assent in December 2025, with others being implemented during 2026 and the remaining changes coming into force in 2027.

With detailed rules now available for some of the upcoming reforms, we can begin updating the policies affected by those changes and prepare for further amendments once the remaining regulations are finalised.

Sickness absence (Changes effective from 6 April 2026)

What is changing? The Act includes provisions to remove the requirement to earn at or above the lower earnings limit and the three-day waiting period to qualify for statutory sick pay (SSP). This means that SSP will be available from day one. Additionally, SSP for those earning below the current rate of SSP will be set at 80% of average weekly earnings.

What needs updating? Any Sickness Absence Policy will need to be updated to ensure that:

• any reference to the three-day waiting period and lower earnings limit has been removed;

• it explains that all employees are eligible to statutory sick pay from the first full day of their sickness absence (rather than the fourth); and

• it provides that all employees are entitled to statutory sick pay, regardless of their weekly earnings.

Paternity leave (Changes effective from 6 April 2026)

What is changing? The Act removes the qualifying periods for paternity leave, making it a day-one right. It also provides that the current restriction that prevents parents from taking paternity leave if they have already taken shared parental leave will be removed. 

What needs updating? Any Paternity Leave Policy will need to be updated to ensure that:

• any references to the 26-week qualifying service requirement are amended, so that it is clear that this requirement no longer applies to employees who qualify under the new rules, taking into account any relevant transitional provisions; and

• it reflects that eligible employees may take paternity leave and pay after taking shared paternity leave and pay.      

• any references to the 26-week qualifying service requirement are amended, so that it is clear that this requirement no longer applies to employees who qualify under the new rules, taking into account any relevant transitional provisions; and

• it reflects that eligible employees may take paternity leave and pay after taking shared paternity leave and pay. 

Parental leave (Changes effective from 6 April 2026)

What is changing? The Act removes the qualifying period of one year's service to be eligible to take parental leave, making it a day-one right.

What needs updating? Any parental leave policy will need to be updated to ensure that references to the one-year qualifying service requirement are amended, so that it is clear this requirement no longer applies to employees who qualify under the new rules.

Anti-bullying and anti-harassment (Changes effective from October 2026)

What is changing? The Act imposes a duty on employers to take all reasonable steps to prevent sexual harassment from occurring in the workplace, instead of just reasonable steps. Additionally, the Act includes provisions that hold employers liable for third-party harassment if the employer fails to take all reasonable steps to prevent it. This liability is not just limited to sexual harassment, but extends to harassment on the grounds of age; disability; gender reassignment; race; religion or belief; sex; and sexual orientation.

What needs updating? Any Anti-Bullying and Anti-Harassment Policy will need to ensure that it:

• defines bullying and harassment and provides clear examples of what amounts to bullying and harassment;

• makes a firm commitment to taking proactive measures, such as providing training and undertaking risk assessments, to prevent all forms of bullying and harassment;

• includes a robust procedure for reporting and responding to complaints; and

• is extended so that it covers bullying and harassment by third parties.

The term "third party" is defined as anyone other than the employer or a fellow employee.

Additionally, the Government is expected to introduce new regulations that will define what amounts to "reasonable steps" to prevent harassment. These steps may include conducting assessments, publishing plans or policies, and other steps relating to the reporting of harassment and handling of complaints although these regulations are due to be introduced in 2027, after the changes have come into effect.

Varying terms and conditions (Changes effective from January 2027)

What is changing? The Act includes provisions to significantly limit the practice of dismissal and re-engagement (commonly referred to as "fire and rehire"). Under the Act, a dismissal will be automatically unfair if the reason for the dismissal is because the employee refuses to accept a "restricted variation" to their contract. It will also be automatically unfair to dismiss an employee if the principal reason for the dismissal is to employ another person to do the same work as the dismissed employee, or to rehire the dismissed employee to carry out the same work but under new terms that include the restricted variations. 

What needs updating? Any varying terms and conditions policy or procedure will need to ensure that:

• it makes a firm commitment not to use fire and rehire practices unless there are financial difficulties that make it unavoidable; and

• it outlines a robust consultation process that is applicable in situations where fire and rehire practices are permitted.

Flexible working (Changes effective from 2027)

What is changing? Under the Act an employer will be able to refuse a flexible working request on one of the existing grounds only if it is reasonable to do so. Additionally, if the employer refuses a request, it must notify the employee of the ground for refusal and why the refusal is reasonable. 

What needs updating? Any Flexible Working Policy will need to ensure that it:

• makes it clear that a request for flexible working will not be refused by the employer unless it is reasonable to do; and

• includes an obligation on the employer to provide written reasons for any refusal and why the refusal is considered to be reasonable.

There may be additional regulations that specify what steps an employer will need to take to consult with an employee prior to refusing a request. If regulations are introduced, the Acas code of practice on requests for flexible working will be updated.

Probation policy (Changes effective from 1 January 2027)

What is changing? The Act changes the qualifying period for claiming unfair dismissal from two years to six months.

What needs updating? This reform increases the importance of managing employment effectively during the early stages, making it even more important for employers to have a clear and well-structured probation policy in place. Any Probation Policy should be updated to set out:

• how performance will be managed during the probationary period;

• the support available to new starters; and

• the review process, covering ongoing reviews and the final review at the end of the probation period.

Onboarding (Changes effective from 1 January 2027)

What is changing? The Act changes the qualifying period for claiming unfair dismissal from two years to six months.

What needs updating? This reform highlights the need to ensure that employees are effectively onboarded since a good onboarding experience can have a huge impact on retention. Any Onboarding Policy should be updated to ensure that it clearly explains:

• what the onboarding programme might cover;

• how the onboarding programme will be delivered; and

• any other initiatives to ensure the employee is given the best possible start in their role.  

Redundancy (Changes effective from 2027)

What is changing? Currently, the duty to collectively consult arises where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days. The Act provides that the requirement to collectively consult will also be triggered where a different threshold is met. This new threshold has not yet been defined in regulations but is likely to involve a calculation across the entire organisation. 

What needs updating? The Redundancy Policy will need to be updated to ensure that any provision limiting collective consultation to 20 or more proposed redundancies within 90-day period at one establishment is amended and includes the new threshold test.

Bereavement leave (Changes effective from 2027)

What is changing? The Act introduces a new statutory right to bereavement leave, allowing all employees who lose a loved one to take leave from work.

What needs updating? Any Compassionate Leave Policy or Bereavement Leave Policy will need to be updated to reflect the new statutory right to bereavement leave. The policy will need to explain: 

• how much bereavement leave the employee is entitled to;  

• that the leave is available to all employees from the first day of their employment;

• the specific relationship that the employee needs to have with the deceased to qualify for the right;

• the period of time within which the leave must be taken;

• the process for requesting leave; and 

• that the leave will be unpaid (unless of course the employer decides to offer paid leave).