Every deadline, every new right, every case law implication — and what it means for the people who actually use employment tribunals.
The Employment Rights Act 2025 received Royal Assent on 18 December 2025. It is the most significant overhaul of UK employment law since the original Employment Rights Act 1996, and its provisions are being rolled out in phases across 2026 and 2027. Some changes are already in force. Others are months away. A few haven’t even been consulted on yet.
This article sets out exactly what is changing, when it takes effect, and what the practical consequences are — for employers, for employees, for practitioners building cases, and for the growing number of litigants in person who will be navigating this new landscape without legal representation.
What Has Already Changed: April 2026
Six reforms came into force on 6 April 2026. These are not proposals or consultations — they are live law.
Day-one paternity and parental leave. Employees are now entitled to paternity leave and unpaid parental leave from their first day in a new job. The old qualifying periods have been abolished. A new right to Bereaved Partners’ Paternity Leave also came into force, providing time off following the death of a child’s mother or primary adopter.
Statutory Sick Pay from day one. Two barriers have been removed simultaneously. The three-day waiting period is gone — SSP is now payable from the first day of absence. And the Lower Earnings Limit has been abolished, meaning all employees qualify regardless of how much they earn. For low-paid and part-time workers, this is a fundamental change. Previously, anyone earning below £123 per week had no entitlement to SSP at all.
Sexual harassment as a qualifying disclosure. Whistleblowing protection now explicitly covers disclosures about sexual harassment. Workers who report sexual harassment are protected from detriment and unfair dismissal under the whistleblowing framework — a significant expansion of protection that connects two previously separate areas of employment law.
Holiday pay record-keeping. Employers must now keep records demonstrating compliance with holiday entitlement obligations and showing that payment in lieu for unused holiday has been made on termination. This is an enforcement mechanism — it shifts the burden of proof in holiday pay disputes.
Collective redundancy protections. The protective award for non-compliance with collective consultation obligations has been increased, raising the financial stakes for employers who fail to consult properly before making 20 or more redundancies.
The Fair Work Agency. Launched on 7 April 2026, this is a new single enforcement body that consolidates the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, and HMRC’s National Minimum Wage enforcement team. It has powers to inspect workplaces, issue civil penalties, recover underpayments, and — critically — bring employment tribunal claims on behalf of individual workers who are unable or unwilling to bring claims themselves.
That last point deserves emphasis. For the first time, a government agency will be able to initiate tribunal proceedings on behalf of workers. The FWA’s inspection, penalty, and underpayment recovery powers are already operational — its Enforcement Policy Statement was published on 7 April 2026. The power to bring tribunal claims on behalf of individual workers (section 116 of the Act) has not yet been commenced, but the legislative framework is in place and a commencement date is expected.
What Changes in October 2026
Tribunal time limits double. The time limit for bringing employment tribunal claims will increase from three months to six months for all claims. This is one of the most practically significant changes in the entire Act. Under the current three-month limit, workers — particularly those without legal representation — regularly miss the deadline simply because they didn’t know it existed or didn’t understand when it started running. Doubling the window to six months will give claimants more time to seek advice, gather evidence, and attempt early conciliation through ACAS.
Enhanced tipping protections. Employers will be required to consult with workers or their representatives before creating or amending a tipping policy.
Employer duty on sexual harassment strengthened. The existing duty to take “reasonable steps” to prevent sexual harassment in the workplace is upgraded to “all reasonable steps” — a higher standard that will require employers to demonstrate proactive measures, not just reactive policies.
The Headline Changes: January 2027
Unfair dismissal qualifying period drops to six months. From 1 January 2027, employees will acquire protection against ordinary unfair dismissal after just six months of continuous employment, down from the current two years. There is no transitional provision — anyone already employed at that date with six months’ service will immediately gain protection. In practical terms, this means anyone hired from the end of June 2026 onwards will be covered from day one of the new regime.
The compensation cap is removed. In a last-minute amendment during the Bill’s passage through Parliament, the government removed the statutory cap on the compensatory award for ordinary unfair dismissal. Currently, the compensatory award is capped at the lower of 52 weeks’ gross pay or £123,543 (as uprated from 6 April 2026). From January 2027, there is no cap. For senior employees or those with high earnings, the potential exposure for employers increases dramatically.
Fire and rehire becomes automatically unfair. Dismissing an employee and then rehiring them on worse terms — sometimes called “fire and rehire” — will become an automatically unfair dismissal. The only exception is where a business faces genuine severe financial difficulty and has no alternative. This codifies the public anger following high-profile cases where large employers used dismissal-and-re-engagement as a negotiating tactic. Originally scheduled for October 2026, this provision was pushed back to January 2027 in the government’s revised implementation timetable of 3 February 2026.
These three changes together — shorter qualifying period, uncapped compensation, and the end of fire and rehire — fundamentally alter the risk calculus for every dismissal decision.
Further Changes in 2027
Several additional provisions are expected during 2027, though exact dates have not yet been confirmed for all of them.
Zero-hours contract protections. Workers on zero-hours and low-hours contracts will gain the right to guaranteed working hours reflecting their actual working pattern. Employers will be required to offer a guaranteed-hours contract at the end of each reference period. Workers will also gain rights to reasonable notice of shifts and compensation for short-notice cancellations.
Enhanced pregnancy and maternity protections. Protections against dismissal for pregnant workers and those returning from maternity leave will be strengthened.
Gender equality action plans. Initially voluntary, these will become mandatory for employers with 250 or more employees.
Trade union access and recognition reforms. The statutory recognition process has already been simplified (from April 2026), with lowered membership thresholds, removal of the requirement to demonstrate likely majority support, and a shift to simple-majority ballot outcomes. Further provisions on workplace access rights — both physical and digital — are expected to come into force during 2027.
What This Means for Case Law
The removal of the compensation cap creates consequences that extend well beyond the headline figure. Two established doctrines become significantly more important in the new regime.
Polkey deductions. The House of Lords in Polkey v AE Dayton Services Ltd [1988] AC 344 established that where an employer unfairly dismisses an employee, the compensation may be reduced to reflect the chance that the employee would have been dismissed anyway had a fair procedure been followed. With no cap on the compensatory award, Polkey arguments become the primary mechanism for limiting employer exposure — particularly in cases involving senior or high-earning employees. Expect these arguments to feature far more prominently in tribunal litigation from January 2027.
The band of reasonable responses. Established in British Leyland UK Ltd v Swift [1981] and refined through Iceland Frozen Foods v Jones [1983], Post Office v Foley [2000], and HSBC Bank plc v Madden [2000], this test asks whether the employer’s decision to dismiss fell within the range of responses that a reasonable employer could have adopted. With a shorter qualifying period, more dismissals will be subject to this scrutiny. The band of reasonable responses does not change — but it will be applied to six times more employment relationships than before.
Automatically unfair dismissal. The fire-and-rehire provisions (from January 2027) create a new category of automatically unfair dismissal, which means there is no qualifying period at all and no “band of reasonable responses” defence. Where a dismissal is connected to the refusal to accept varied contract terms, the burden on the employer to demonstrate genuine financial necessity with no alternative will be heavy.
The Access to Justice Dimension
Employment tribunal claims were already rising sharply before most ERA 2025 provisions came into force. Between October and December 2025, tribunals received 13,000 single claims — a 54% increase on the same quarter in 2024. Live claims stood at 58,000, up 49% year-on-year.
These numbers will accelerate. The six-month time limit alone will bring in claims that previously fell away. The shorter qualifying period will make millions more workers eligible. The Fair Work Agency can bring claims on behalf of workers who would never have brought them independently.
And the composition of claimants is changing. Tribunals have reported that AI tools are enabling litigants in person to bring more complex and detailed claims, supported by legal research that would previously have required a solicitor. This is a double-edged development. It improves access — but it also means that employers and their lawyers face more sophisticated arguments from unrepresented claimants, and that tribunals are dealing with higher-volume, higher-complexity caseloads without proportionate increases in judicial resources.
For litigants in person, the combination of extended time limits, broader eligibility, and AI-assisted research represents a genuine step change in their ability to bring and sustain employment tribunal claims. For practitioners, it means preparing for a significantly busier and more complex tribunal landscape.
A Timeline You Can Pin to the Wall
| Date | Change |
|---|---|
| 6 April 2026 ✅ | Day-one paternity & parental leave; SSP from day one with no earnings threshold; sexual harassment as qualifying disclosure; Fair Work Agency operational; holiday pay records; enhanced collective redundancy protections; trade union recognition reforms |
| October 2026 | Tribunal time limits extended to 6 months; enhanced tipping protections; “all reasonable steps” employer duty on sexual harassment |
| 1 January 2027 | Unfair dismissal qualifying period reduced to 6 months; compensation cap removed; fire and rehire = automatically unfair |
| 2027 | Zero-hours contract protections; enhanced pregnancy/maternity protections; mandatory gender equality action plans (250+ employees); trade union access rights; detailed sexual harassment regulations |
What Should You Do Now
If you are an employer: Review your dismissal procedures before June 2026. Anyone you hire from late June onwards will have unfair dismissal protection from January 2027. Ensure your disciplinary and capability processes can withstand scrutiny under the band of reasonable responses test. Consider the Polkey implications for every dismissal — with no cap, the cost of getting it wrong is no longer predictable.
If you are a solicitor or barrister: Familiarise yourself with the Fair Work Agency’s enforcement approach and the new automatically unfair dismissal categories. Prepare for significantly higher tribunal volumes and more complex cases from unrepresented claimants. The Polkey and band of reasonable responses case law needs to be at your fingertips.
If you are a litigant in person: You now have six months (from October 2026) to bring a claim, not three. You have protection from unfair dismissal after six months of employment (from January 2027), not two years. And if your employer fires you and rehires you on worse terms, that is automatically unfair — full stop. Know your rights, and know the deadlines.
Explore the landmark employment cases cited in this article — with verified citations and treatment analysis showing how later courts have applied them.
The Employment Rights Act 2025 is available in full on legislation.gov.uk. The government’s implementation timeline is published at GOV.UK. For guidance on how these changes affect your specific situation, consult a qualified employment lawyer or contact ACAS on 0300 123 1100.
Search the Law is not a law firm and does not provide legal advice. The information in this article is for legal research purposes only. If you need advice about a specific employment matter, consult a qualified employment lawyer or contact ACAS (0300 123 1100).