Employment Rights Act 2025: guiding employers through change

The first phase of implementation of the Employment Rights Act 2025 (ERA) is now under way, marking the beginning of a wider programme of reform in UK employment law.

This update focuses on the changes in force from 6 April 2026 and their practical implications for employers more broadly. The priority is to understand which obligations have shifted, what is coming next, and what practical steps employers must take to stay compliant and reduce risk.

While many of the more complex and impactful reforms will follow later this year and into 2027, the first provisions to have taken effect have introduced several significant shifts. Some of these require one-off adjustments and others a recalibration of approach as risk and responsibility begin to move.

Key changes effective from 6 April 2026

Family-related rights

Entitlement to certain family-related leave has changed. Paternity leave has become a day one right (with statutory paternity pay remaining subject to existing qualifying conditions). Unpaid parental leave is now available from day one of employment also. These adjustments of entitlement should be reflected in existing policies so that the removal of qualifying thresholds is clear to staff and a consistent approach is taken across the workforce.

In addition, bereaved partners have a new right to take extended unpaid leave where the mother or primary adopter dies within the first year following birth or adoption.

Statutory sick pay

Statutory sick pay is now payable from day one of a sickness absence, with eligibility no longer linked to an employee’s earnings. Employers should consider the impact on payroll costs of employees being entitled to receive statutory sick pay in relation to frequent short absences under the new regime and check that processes are in place to deal robustly with any concerning patterns of absence.

Holiday pay and record‑keeping obligations

A further development to note is the introduction of enhanced record‑keeping duties. Employers must keep adequate records of statutory annual leave and holiday pay for a period of six years, including any payments made in lieu on termination of employment. Failure to comply with these obligations will amount to a criminal offence. Employers should review whether current systems are sufficiently detailed and reliable to ensure compliance.

Whistleblowing and workplace concerns

Sexual harassment is now expressly included in whistleblowing legislation, which confirms that workers who raise concerns in this area will benefit from whistleblower protections. This increases the importance of an employer getting its response to the raising of such concerns right. Employers should make sure that existing processes are clear, accessible and consistently applied.

Redundancy and financial exposure

The maximum protective award for failure to comply with collective redundancy consultation obligations has increased from 90 to 180 days’ pay per affected employee. This represents a notable increase in potential exposure, particularly in large scale redundancy scenarios, and reinforces the importance of careful planning, documentation and timing.

Trade unions

The Act also introduces a simplified process for trade union recognition (which follows other measures which came into force earlier this year relating to industrial action including ballot thresholds and mandates).

Enforcement

A new Fair Work Agency has also been established. While its full remit will be introduced in stages, it is expected to take an active role in enforcing employment rights, including statutory pay and holiday entitlements.

What does this mean in operational terms?

At this stage, the immediate impact for many employers may be relatively contained. However, it is clear that the direction of travel is towards increased protection for employees and greater scrutiny of employer processes.

To stay ahead, employers should consider:

• Updating internal policies so that they reflect new rights and day one eligibility;
• Testing whether protected disclosures can be raised easily, recorded consistently and investigated promptly;
• Revisiting redundancy processes and building in longer timescales for compliant consultation; and
• Keeping developments under review as further reforms are introduced including the far-reaching changes to the unfair dismissal regime.

Looking ahead

The April 2026 changes are the first step in a broader set of reforms and many more will follow later in 2026 and into 2027. We will share a series of updates over the coming months regarding these further developments. These will build on our earlier insights and include analysis of how the earlier reforms are unfolding in practice and what employers need to do at each stage.

We advise businesses in relation to all the above areas of employment law. If you would like a tailored impact assessment for your organisation (including a practical implementation plan), please get in touch.

For a practical summary of the key actions employers should be taking now, download our ERA Employer Readiness Checklist (April 2026 Edition).