At a Glance
The Employment Rights Act 2025 (‘ERA 2025’) introduces wide ranging UK employment law reforms. Most changes will be implemented by regulations in phases throughout 2026 and 2027 in accordance with the Government’s proposed implementation roadmap.
In this article, we set out the key changes coming in under the first tranche, which employers should start preparing for now. Early milestones to have on your radar are February 2026 and April 2026, as set out below:
| 18 February 2026 | Trade union changes, including: – Repeal of the great majority of the Trade Union Act 2016, including but not limited to removal of the support thresholds for industrial action ballots in important public services and simplifying industrial action notices and industrial action ballot notices – Strengthened protections against dismissal for taking industrial action |
| April 2026 | – Collective redundancy protective award being doubled – ‘Day 1’ rights to paternity leave and unpaid parental leave – Whistleblowing protections – Fair Work Agency body established (although unclear if enforcement powers will come into force immediately) – Statutory Sick Pay – Trade union changes: simplifying trade union recognition process and electronic and workplace balloting – Gender pay gap and menopause action plans on a voluntary basis (mandatory from 2027) |
The Government expects to use the common commencement date of 6 April for the April 2026 changes.
Most changes in these early tranches are some of the more straightforward for employers and will involve reviewing and updating policies and processes and evaluating industrial and employee relations strategies. We set out further details on the changes and action points below.
Employers should also still be looking to the changes coming down the line in October 2026 (notably including fire and rehire/replace, third party harassment and the enhanced duty to prevent sexual harassment among other changes) and 2027 (for unfair dismissal changes and more) given the significance of these changes.
For further information on the range of changes being brought in by the ERA 2025, please see our Reform Hub.
In Detail
18 February 2026 – Trade Union Reform
The ERA 2025 repeals most of the provisions within the Trade Union Act 2016 and will simplify balloting and industrial action procedures. Key changes include:
- Removal of the 40% support threshold for industrial action ballots in important public services
- Extending the mandate of industrial action ballots from 6 to 12 months
- Reducing the notice required to be given to employers of industrial action from 14 to 10 days
- Simplifying industrial action and ballot notices, with fewer prescribed details required
- Strengthened protection against dismissal for taking industrial action
- Removing requirements in relation to union supervision of picketing
For some of these trade union reforms, there are transitional provisions dealing with how these will apply in the period around 18 February 2026 (see Government Guidance here). In addition, provisions under the ERA 2025 which extend protections against detriments for taking industrial action will also come into force on 18 February 2026, however these require regulations setting out the “prescribed” detriments, which are anticipated following consultation later in October 2026 according to the Government’s roadmap.
Key actions for employers: Unionised employers should consider reviewing their industrial relations strategies. Employers may also wish to consider contingency planning for any potential industrial action, which may be quicker and easier to organise.
To guard against the strengthened protections against dismissal for taking industrial action, ensure robust, documented fair reasons for any dismissals during industrial action.
April 2026
From 6 April 2026, the current 26-week service requirement for paternity leave and the one-year service requirement for unpaid parental leave will be removed (although note that the qualifying service requirement for paternity pay remains unchanged).
The prohibition on taking paternity leave after shared parental leave will also be lifted.
Broadly speaking, these changes will apply to births or adoptions that take place on or after 6 April 2026, however notifications can be made in advance from 18 February 2026 and there are some transitional provisions dealing with particular circumstances.
We also note that a new right to Bereaved Partner’s Paternity Leave is being introduced (although not under the ERA 2025 – see our article here).
Key actions for employers: Employers should review and amend their family leave policies or any affected contracts to reflect these new rights in time for the upcoming implementation dates.
- Collective Redundancy– Protective Awards
At present, where employers fail to comply with statutory information and consultation requirements for collective redundancies, an Employment Tribunal may award a protective award of up to 90 days’ gross pay per employee. The ERA 2025 will double this to 180 days’ gross pay.
Key actions for employers: It is not currently clear how this reform will be implemented, (i.e. whether it will apply to dismissals that take effect or proposals commenced after April 2026). It will be important to ensure these increased potential costs are factored into employers’ risk assessments for collective redundancy processes which may be in the pipeline for early 2026 and beyond.
- Statutory Sick Pay (‘SSP’)
Currently, to be entitled to SSP, employees off work due to sickness must be absent for three ‘waiting days’ before SSP becomes payable on the fourth day of absence. Under the ERA 2025:
- SSP will become a day one right, meaning that SSP will be available from the first day of absence
- The Lower Earnings Limit on eligibility, which is currently average pre-tax earnings of £125 per week, is being removed. The rate of SSP will be capped at the lower of the current weekly SSP rate set by the Government (currently £118.75 but reviewed annually) or 80% of the employee’s average earnings
Key actions for employers: Employers should review their sickness absence policies and employment contracts in time for April to ensure these reflect the changing SSP entitlements. Employers may also need to budget higher costs for SSP and inform payroll of any changes.
- Whistleblowing– Express Protection for Sexual Harassment Disclosures
The ERA 2025 amends the list of disclosures qualifying for protection under whistleblowing laws to expressly include sexual harassment. Provided the relevant whistleblowing tests are met, such workers may benefit from whistleblowing protections (such as from detriment or dismissal). Non-disclosure clauses will not, as for other types of whistleblowing disclosures, be able to prevent such protected disclosures from being made.
Key actions for employers: Employers should consider reviewing and amending their whistleblowing and sexual harassment policies and any applicable template contracts with non-disclosure clauses in time for the change coming into force. Having clear, prescribed routes for reporting sexual harassment and robust processes for dealing with whistleblowing disclosures will continue to be critical.
The Government has said the FWA will be established in April 2026 as a single enforcement body to consolidate enforcement across various labour market areas, including national minimum wage, SSP, employment agencies, gangmasters licensing, modern slavery, annual leave and certain fraud offences. Notably, one of the FWA’s new areas of enforcement will include the enforcement of holiday pay, along with the anticipated new obligation for employers to keep records of annual leave for six years (although the timing of this reform is unknown). The FWA will have various enforcement powers, such as the power to issue enforcement undertakings or notices of underpayment (including in respect of holiday pay) and to bring tribunal proceedings on behalf of employees.
Whilst it is expected that the FWA body will be established in April 2026, it is currently unclear if its enforcement powers will also be in force from this time. The Government factsheet states that implementation will be done in phases after the ERA 2025 passed, starting with establishing the body in April 2026, but that it will publish details of their further approach to implementation in due course.
Key actions for employers: Employers may consider assessing their compliance risks for key areas of enforcement by the FWA (particularly holiday entitlements) and ensure their records are maintained and up to date.
The ERA 2025 will make changes aimed at making the statutory recognition process for trade unions simpler, including:
- Requiring only a simple majority of workers voting to vote for recognition (as opposed to the current 40% bargaining unit support requirement)
- The Secretary of State will be able to lower the threshold for the Central Arbitration Committee to accept a trade union recognition application from 10% of the workers in a bargaining unit to between 2 and 10%
- Unions will no longer need to show when submitting an application that a majority of workers in the bargaining unit are likely to support recognition
- Removing certain restrictions to pave the way for e-balloting
A consultation is awaited on a number of these measures.
Key actions for employers: These changes could lead to an increase in the level of union membership and the prevalence of trade unions within businesses. Non-unionised employers should consider the likelihood of union approaches and whether any initiatives in the employee relations space could be beneficial.
The ERA 2025 makes amendments to the Equality Act 2010 to require large employers (with 250 or more employees) to develop and publish equality action plans showing the steps they are taking in relation to their employees regarding prescribed matters related to gender equality. This includes addressing the gender pay gap and supporting employees going through the menopause. The Government roadmap indicates that this will be introduced on a voluntary basis in April 2026 and then will formally take effect in 2027.
Beyond the ERA 2025
There are a few further changes employers should be aware of for April 2026, outside of the ERA 2025 reforms, including:
The reforms affecting umbrella companies under the ERA 2025 are not anticipated until 2027. However, the Government is separately introducing tax reforms to umbrella company arrangements under the Finance Bill 2026, which are due to take effect from 6 April 2026. These changes will essentially introduce joint and several liability provisions within the labour supply chain.
Employers relying on umbrella companies should consider taking tax advice as to how the new tax rules will affect costs and liability and ensure adequate due diligence is in place for their employment supply chains.
- National Minimum Wage and Other Rates Changing
From 1 April 2026, National Living and Minimum wage rates are increasing from £12.21 per hour to £12.71 per hour (workers aged 21 and over). For workers aged 18-20 these are increasing to £10.85 per hour and for workers aged 16-17 and apprentices to £8.00 per hour.
From 6 April 2026:
- SSP will increase from £118.75 to £123.25
- The rates for statutory family leaves (including statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay, maternity allowance, statutory parental bereavement pay and statutory neonatal care pay) increase from £187.18 to £194.32 per week
- The Lower Earnings Limit will increase from £125 to £129 per week
Next Steps
With several measures under the ERA 2025 reliant on secondary legislation, we are continuing to monitor updates to track commencement details and transitional provisions. However, a proactive programme of policy reviews, HR training, payroll and systems changes, and compliance risk reviews will put you in the best position to navigate the ERA 2025 rollout. You can keep up to date with the changes via our Reform Hub or with our upcoming webinar.
Please contact your usual Littler contact if you would like any support with preparing your business for the upcoming changes. For any client training queries, please contact Natasha Adom.
