The effects of the Employment Rights Act 2025 are already being felt by businesses across the county, as the first wave of major changes came into effect earlier this year.
With many more big changes to come between now and the end of 2027, SoGlos sits down with Jenny Hawrot – partner in the Employment & Business Immigration Team at Willans LLP solicitors in Cheltenham – to find out what the latest changes mean, and how businesses can best prepare for their implementation.
What is the Employment Rights Act 2025 and what are some of the biggest changes that it presents for employers in the coming months?
The Employment Rights Act 2025 is the biggest change to employment legislation since 2010. The Act builds on a number of earlier employment law reviews and proposals, including the Taylor Review of Modern Working Practices, which was a huge investigation into working conditions and how we need to improve working life for working people, and forms a central part of the Government's Plan to Make Work Pay.
It's been nearly 10 years in the making and looks to address imbalances in power and make working life pay.
It got Royal Assent at the end of 2025 and is looking to be fully implemented by the end of 2027, but some things came into force from February 2026.
There are huge changes for employers – from getting paid from the first day of sick leave, rather than having three waiting days, and unpaid leave becoming a day-one right, to changes around unfair dismissal – and there are wide-reaching implications.
It's an enormous piece of legislation that all employers need to be on top of.
One of the big upcoming changes is that from the end of October 2026, employers must take 'all reasonable steps' to prevent sexual harassment in the workplace. What does that mean?
The legislation at the moment is that employers must take reasonable steps. The new act has added the word 'all', which seems like a tiny little word, but it has huge implications.
In theory, if businesses are taking all reasonable steps, sexual harassment shouldn't happen. That is the purpose behind the legislation. But in terms of what all reasonable steps are, businesses need to be looking at how they operate – conducting risk assessments, looking at sexual harassment policies, communicating with and engaging staff to make sure that everyone is aware of the policies in place – and have good reporting lines, so everyone knows that if they have concerns, they have a confidential way of reporting these.
Policies and documentation are only useful if they are regularly communicated and people receive regular training. Just having the policies or doing one training session isn't enough any more. It's a really proactive duty on employers.
Does the legislation cover clients, partners, external contractors, or members of the public?
The duty to take all reasonable steps to prevent sexual harassment in the workplace is not limited to harassment between employees. Employers may also be liable for harassment by third parties, including clients, customers, contractors and members of the public, unless they have taken all reasonable steps to prevent it. While the proactive duty specifically relates to sexual harassment, employers can also face liability for other forms of unlawful harassment based on any protected characteristics, so age, race, sex, sexual orientation, disability, marital status, maternity and pregnancy.
In industries like hospitality, where you're dealing with the public, employers need to take proactive steps to prevent, for example, drunk customers sexually harassing their bar staff, so this is when things like outward facing anti-harassment policies and public notices make it clear that anyone using your services knows not to harass your staff.
Failure to take these steps could result in an employment tribunal, if harassment occurs.
How is sexual harassment in the workplace determined?
The legal definition of sexual harassment is unwanted conduct of a sexual nature which has the purpose or effect of violating a person's dignity, or creating a hostile, intimidating, degrading, humiliating or offensive environment. It's not just the meaning behind it, but the effect of it. It's really important to understand that.
If you have a workplace where banter is acceptable, if it has the effect of creating an intimidating, hostile or degrading environment for an individual, that would amount to sexual harassment.
It's one of those things that can be hard to describe, you know what it is when you see it, but the legal definition is quite helpful in terms of describing and communicating exactly what that is.
What can employers do if they suspect sexual harassment is happening in their workplace?
Always act on it immediately. You have disciplinary procedures for a reason. Undertake an investigation to find out what happened, what went wrong, whether you need to update your policies to include this type of example, or provide additional training.
The idea behind the legislation is that you create an environment where everyone knows not to do it, and therefore it doesn't happen, but you can't control what people do all the time, so what you need to do as a business is make sure you've got really clear reporting lines.
Make sure people know that if something happens, they must report it, that there's a confidential place to do it, and that nothing bad will happen to them for reporting it. It's about educating and empowering staff to speak up if they see it happening in the workplace, as calling it out can go some way towards stopping it from happening.
There are changes around employment tribunals and unfair dismissal. Tell us a bit about those.
Employees currently need two years of service before they can bring a claim for unfair dismissal, that's being reduced to six months as of Friday 1 January 2027.
That means there will be a large number of people who have unfair dismissal rights where they wouldn't have previously. There are legitimate reasons to terminate someone's employment, such as their performance not being good enough during their probationary period, redundancy, et cetera, but businesses have to have a fair reason, so it puts additional pressure on businesses to get their probation periods right.
It also increases the risk of employment tribunal claims, as employees have the ability to bring claims before a tribunal 18 months before they would have done previously.
There are time limits on how long you have to bring a claim before an employment tribunal. For the majority of employment claims, the time limit was three months from the date of termination, or an act of discrimination, depending on your complaint, in which to bring a claim. That doubled to six months from Thursday 1 October 2026.
Three months may sound like a long time, but it's actually not. Sometimes it's not until someone has stepped away from a situation that they realise how awful it was and wish they could do something about it. Often that tends to be more than three months down the line. So now that people have six months to think about things and potentially take advice, I do think we may see an increase in employment tribunals, so businesses need to make sure their records are kept up-to-date, and ensure they're retaining those records for longer than three months.
Statutory bereavement leave is being introduced as a day-one right from April 2027. What will this involve?
Statutory bereavement leave is brand-new. We've already got statutory parental bereavement leave, which has been in place for a year or so, but from April 2027, statutory bereavement leave will allow two weeks of unpaid leave following a death. This includes relatives and kinships – for example, if you live with someone that isn't technically family, such as step-siblings.
There are also changes to existing parental bereavement leave to extend this leave to baby loss before 24 weeks, which is very much needed.
Currently, employees have limited rights to time off for dependants and qualifying parents have access to parental bereavement leave. However, the new statutory bereavement leave regime will significantly widen protection, creating an extra level of support for members of staff going through difficult experiences by allowing them that time off without question, and allowing them the flexibility to take it in the way they want.
Everyone is human, everyone goes through tough times, it doesn't benefit anyone for someone to be in the office trying to work when they've been through any form of bereavement, so this acknowledges that and shows respect to those people – and it will pay dividends, I'm sure. If you look after your staff, they'll look after you, so this is a really positive thing.
There's no right to be paid for this leave, businesses can choose if they want to pay it or not – but that should be consistent across the board.
What other changes are on the horizon?
As I mentioned, those unfair dismissal rights are coming in January 2027, statutory bereavement leave is coming in April 2027, and there's more to come by the end of 2027 as well.
There has been a consultation around tipping policies which finished this October 2026, so by the end of the year we could see a new statutory code of practice on tipping, with a requirement for businesses to consult on their tipping policies.
Firing and rehiring is going to be significantly restricted and, in many cases, dismissal for refusing contractual changes will become automatically unfair, subject to limited exceptions.
Workers on zero hours contracts will be allowed to ask for guaranteed hours under certain circumstances.
Employers will have to state one or more of the prescribed business reasons to reject flexible working requests and explain why they consider that refusal to be reasonable.
Businesses which employ more than 250 people will need to have mandatory gender pay gap and menopause action plans for employees.
There are plans to remove the cap of £123,543 or 52 weeks' gross pay, whichever is lower, on unfair dismissal claims.
And there are a swathe of changes planned to trade union rules as well – including all employers needing to inform their staff of their right to join a trade union, at the same time as they're making a job offer or sending out a contract; independent trade unions are going to have a statutory right to access workplaces, which they don't currently have; there are enhanced rights for union representatives and plans to strengthen protections for those participating in industrial action; and more still to be confirmed.
There's a lot to be aware of, and I think people assume it's all about the employee, but it's quite balanced, and if businesses get it right, it benefits everyone.
Are these changes likely to be more difficult for SMEs, compared to bigger corporate businesses?
The law applies equally to all businesses, regardless of their size. The issue is resourcing and the ability to prepare and deal with the changes.
Larger organisations tend to have more resources to call upon, but SMEs are generally owner managed and don't necessarily have the infrastructure in place, so they're going to feel the pressure.
But if they get their policies and procedures right, get buy in from their managers, make sure everyone is aware of the changes through regular communication, and keep their work culture positive, there's no reason why SMEs can't cope with the changes.
How can Willans help businesses prepare?
We can help businesses ensure they have a robust plan in place to fulfil their new obligations under the Employment Rights Act and associated legislation, ensure all policies are documented and up-to-date, and ensure that you're communicating them well.
Going beyond the paperwork, we can provide training for managers and staff to make sure they're fully informed, that they know what their responsibilities are, and what to do if someone's employment is not working out. We can provide day-to-day advice on employment law queries and can support even the most experienced HR directors with reassurance and advice from a legal perspective.
And if the worst does happen in terms of a tribunal, we provide tribunal representation as well.
As a department, we get to know our clients and how they operate. No two businesses are the same, and what might be acceptable in one business is not necessarily acceptable in another, so we get to know how they work, their goals, their priorities, their ethos, their commerciality, and we try to become an extension of their team, so they can just pick up the phone and we know where they're at.
All information is accurate as of the date of publication.
To get in touch with Jenny and the Employment & Business Immigration Team at Willans, visit willans.co.uk/employment-business-immigration.
