The UK’s Employment Rights Act 2025

The UK’s Employment Rights Act 2025 represents a significant overhaul of labour law in the United Kingdom. Our Employment & Benefits team review the changes which are due to be phased in through 2026 and 2027. They also provide key takeaways for Irish employers with employees located in the UK.

What you need to know

• Unfair dismissal: The qualifying period of employment for the right to claim unfair dismissal has been reduced from two years to six months. The cap on compensatory awards has also been removed.
• Fire and re-hire: Dismissals for failing to agree to a change in certain core contractual terms will be held to be automatically unfair, except where a business is in severe financial difficulties and has no genuine alternative.
• Zero-hours contracts: The Act introduces a right to guaranteed hours.
• Sick pay: The waiting period for sick pay is removed. The Lower Earnings Limit is also removed.
• Collective redundancy rights: New notification obligations now apply.
• Supporting family friendly rights: New leave and protections have been introduced by the Act that support families.
• Equality: The Act strengthens fairness and equality of workers especially those affected by sexual harassment and gender inequality.
• Trade unions: The Act makes it easier for unions to be recognised by employers and significantly changes trade union legislation in the United Kingdom.

The Employment Rights Act 2025 has been enacted in the UK, governing England, Wales and Scotland. It is set to revolutionise the employment landscape in these jurisdictions, with 28 employment reforms. Its provisions are being phased in throughout 2026 and 2027.The UK Government has provided a timeline for the implementation of these sweeping changes.

We provide a brief summary of key takeaways for Irish employers of UK-based employees.

1. Unfair dismissal

Previously, UK employees needed to work for two years before they could make a claim for unfair dismissal. This qualifying period will be reduced to 6 months from 1 January 2027 under the Employment Rights Act 2025. This is stricter than Ireland’s standard 12-month qualifying period.

The cap on the compensatory award for unfair dismissal claims is also abolished under the Act from 1 January 2027. Currently, compensation for unfair dismissal is limited to 52 weeks’ gross pay or the statutory limit, £118,223 as of April 2025, whichever is lower.

Irish employers of UK-based employees should review their UK contracts now to ensure probation periods are clearly defined and compliant with the Act. It is also advisable to shorten probationary reviews accordingly and make ‘keep or release’ decisions by the end of month five. Job descriptions and KPIs should be audited and made clear to new hires so that ‘failure to pass probation’ is supported by objective data.

2. End of 'fire and re-hire'

The Act addresses the practice of dismissing workers to then re-hire them on different terms, or ‘fire and re-hire’. Dismissal of an employee will be considered automatically unfair from 1 January 2027, if an employee is dismissed:

• For not consenting to one or more “restricted variations” of their contract of employment, or
• To allow the employer to re-engage the employee, or to replace them with another person on a contract that includes a restricted variation, to carry out the same or substantially the same duties.

A “restricted variation” includes:

• Reducing or removing an entitlement to any sum payable in connection with the employee’s employment.
• Changing how pay is determined.
• Variations to any term or condition relating to pensions or pension schemes.
• Variations to the number of hours an employee is required to work.
• Certain changes to the timing or duration of shifts,
• Reductions in the amount of time off the employee is entitled to.
• A variation of a description specified in regulations made by the Secretary of State.
• The inclusion of a term enabling the employer to make any variation listed above without the employee’s agreement, including through the use of flexibility clauses.

A consultation is now underway to further define “restricted variation”. An updated Code of Practice will be provided in 2027.

The above does not apply where an employer can show that the reason for the variation was to eliminate, prevent or significantly reduce or mitigate financial difficulties, as described in the Act.

Irish employers of UK-based employees should note these developments if they are looking to harmonise terms across an Irish and UK workforce. They cannot force UK staff on to new contracts with restricted variations without genuine, documented and bilateral agreement.

3. Eliminating one-sided flexibility

Under the Act, employers must offer a “qualifying worker” a guaranteed-hours contract which reflects the hours that they regularly worked over a “reference period”. There are certain discreet exceptions to this duty under the Act. The definition of a “qualifying worker” is multi-faceted under the legislation, but includes those on a zero-hours and low-hours contract. This change will occur in 2027.

Employers must also give a worker “reasonable notice” of shifts and reasonable notice of shift changes and cancellations from 2027. Compensation for short-notice cancellation of shifts will be available.

Irish employers of UK workers should conduct an hours audit to see which zero-hours or low-hours staff are consistently working a set pattern. They should also implement a policy where shifts are published at least 10-14 days in advance to stay safely within the reasonable notice buffer.

4. Sick pay schemes

Previously, Statutory Sick Pay kicked in on the fourth day of illness. The three-day waiting period has been removed since 6 April 2026. Statutory Sick Pay must now be paid from the first day of illness. Additionally, the Lower Earnings Limit has been removed.

Irish employers of UK workers should redraft their sickness policies and remove mention of waiting day for qualifying periods.

5. Redundancy

The maximum “protective award” for failure to consult in collective redundancy has doubled from 90 days’ pay to 180 days’ pay since 6 April 2026.

Further changes will be implemented from 2027 regarding the duty to collectively consult on redundancies. The obligation will be triggered when:

• Employers propose 20 or more redundancies at one establishment, or
• Employers propose a number of redundancies across one or more establishments in their organisation which meets a new threshold which will be set in secondary legislation.

Irish employers of UK workers that are considering restructuring will be required to consider the total number of redundancies across their whole organisation and not just individual workplaces, as is the case currently.

6. Supporting family-friendly rights

The Act is also aimed at supporting family-friendly rights by:

• Extending entitlements to Paternity Leave and Unpaid Parental leave from "Day 1" of employment from 6 April 2026 onwards.
• Removing the restriction on taking paternity leave after shared parental leave from 6 April 2026 onwards.
• From 6 April 2026, allowing eligible fathers and partners to take up to 52 weeks of unpaid bereaved partner’s paternity leave if the mother or primary adopter dies. They must take this within 52 weeks of the child’s birth including surrogacy, adoption placement or entry to Great Britain for overseas adoptions.
• Introducing unpaid bereavement leave from 2027 for pregnancy loss before 24 weeks.
• Introducing new protections from 2027 against dismissal for pregnant women, mothers on Maternity Leave and mothers for at least six months after they return to work. There are exceptions to this protection in certain circumstances.
• Introducing, from 2027, a clearer process for employers to follow when they have received a flexible working request which cannot be agreed. It requires employers to explain their reasons for denying a request and requires that any rejection must be reasonable.

Irish employers of UK workers should review their paternity, parental, maternity, adoptive leave and remote working policies to ensure they comply with the new law.

7. Equality

The Act strengthens fairness and equality of workers, especially those affected by sexual harassment and gender inequality.

• Sexual harassment is now a “qualifying disclosure” under whistleblower law as of 6 April 2026.
• Employers can voluntarily create action plans around menopause and gender pay gaps from 6 April 2026. This will become mandatory in 2027 for employers of 250+ workers.
• From October 2026, employers will be liable for harassment to their employees from third-parties, e.g. customers, unless they have taken “all reasonable steps” to prevent the harassment from happening.
• A change relating to non-disclosure agreements is also scheduled, which will void clauses that would prevent workers from alleging or disclosing work-related harassment or discrimination.

Irish employers of UK workers should begin to draft action plans around menopause and gender pay gaps. They should provide anti-harassment training to all staff members and change their non-disclosure agreement policy/provisions in severance agreements.

8. Trade unions

Rules relating to “minimum service levels” for strikes were abolished shortly after the Act’s enactment in December 2025.

Dismissal of a worker for taking part in industrial action became “automatically unfair” in February 2026. February 2026 also saw the limitation of the notice period for industrial action decrease to 10 days from 14 days. Picket supervisors are no longer required. Industrial action mandates last for 12 months instead of 6 months. Industrial action and ballot notices have also been reformed under the Act since February 2026. In addition, the rule that required at least 40% of the total eligible votes to support industrial action has been abolished for both public and private sectors. Now, there only needs to be more votes in favour of industrial action than not for it to go ahead. The turnout threshold rules for industrial action ballots will remain until at least August 2026. This rule requires at least a 50% turnout for industrial action ballots.

The process for statutory recognition of trade unions has changed from 6 April 2026. An updated Code of Practice on recognition is expected later this year.

Trade union members will be able from August 2026 to vote electronically or in-person in ballots for industrial action, union elections and other statutory ballots if the employer and trade union consent. Following this, the removal of the requirement for a 50% turnout for industrial action ballots has been scheduled.

Further trade union changes are scheduled to occur from October 2026, including:

• A new obligation will be introduced for employers to inform workers of their right to join a trade union.
• New rules on a trade union’s right of access to the workplace will be introduced.
• A new right to reasonable accommodation and facilities for trade union representatives carrying out their duties is scheduled.
• A new right to time off for union equality representatives to carry out their duties will be introduced.
• An updated Code of Practice on recognition of trade unions is due to be published.
• Workers taking part in industrial action will be protected against “detriment” in addition to unfair dismissal.

Further changes will occur in 2027, such as:

• Changes to the laws that protect trade union members from discrimination and being ‘blacklisted’.
• A framework aimed at promoting collaboration between employers and trade unions.
• Workers will be able to vote electronically in ballots for trade union recognition and de-recognition.

More changes are also expected under the Act, including those relating to: enforcement of employment rights, employment tribunal time limits, employer record keeping, the establishment of the Fair Work Agency, tipping, regulation of umbrella companies and public sector outsourcing.

Conclusion

For expert advice to help you navigate the Employment Rights Act 2025, contact our Employment & Benefits team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.