Mar 26
In this article Sally Togher, Head of Employment at Raworths, looks at the new Employments Rights Act 2025.
The Employment Rights Act 2025 is one of the most significant shake-ups of workplace legislation in decades. For businesses across Yorkshire, it represents far more than routine legal reform – it signals a fundamental shift in employee rights, employer responsibilities and regulatory oversight.
The Act, introduced following Labour’s commitment to overhaul employment protections, received Royal Assent in December 2025. Rather than arriving all at once, its provisions will be phased in throughout 2026 and 2027, creating a prolonged period of change for employers to navigate.
In conversations, I am increasingly advising business owners to view this as a strategic issue, not simply a HR update. The organisations that prepare early will be best placed to manage both risk and cost.
The Government’s intention is to modernise employment law and strengthen enforcement of workplace rights. While the policy aims may be clear, the practical effect for employers will be increased scrutiny, expanded legal exposure and a greater need for robust people management processes.
Although the Act introduces numerous reforms, several stand out as having the greatest operational impact.
From April 2026, changes to statutory sick pay (SSP) will remove the traditional three waiting days and abolish the lower earnings limit. More employees will qualify for SSP and payments will begin earlier.
Many businesses are already grappling with absence management challenges. These reforms are likely to increase costs and potentially lead to higher levels of short-term absence, making effective absence policies and consistent management more important than ever.
The creation of the Fair Work Agency marks a notable shift in how employment rights are enforced. The new body will have powers to inspect workplaces, request documentation and enforce compliance across a wide range of employment obligations, including holiday pay.
This moves employment law beyond employee-led complaints toward proactive regulatory oversight. Employers will need to ensure their practices stand up to external scrutiny.
From October 2026, employers will have a legal duty to take all reasonable steps to prevent sexual harassment, with liability extending to harassment carried out by third parties and covering all forms of harassment.
Policies alone will not be enough. Businesses will need meaningful staff training, workplace risk assessments and clear behavioural expectations for employees, clients and customers alike. Workplace culture will become a key area of legal risk management.
Another significant change is the extension of the Employment Tribunal claim deadline from three months to six months. While procedural on the surface, this will prolong uncertainty for employers following disputes and is likely to result in more claims being pursued simply because individuals have more time to bring them.
The most transformative reforms arrive in January 2027. The qualifying period for most unfair dismissal claims will reduce from two years’ service to six months, meaning far more employees will gain protection. At the same time, the cap on compensation for unfair dismissal will be removed.
Together, these changes significantly increase litigation risk. Employers will need stronger recruitment processes, clearer probation management and well-documented decision-making when managing performance or dismissal.
The concerns I hear most centre on these unfair dismissal reforms and the potential rise in claims. My advice is consistent: preparation is essential.
Businesses should already be:
Employment law compliance can no longer sit solely with HR. Leadership teams and line managers must understand the legal framework shaping everyday workplace decisions.
It is easy to view the Employment Rights Act purely through the lens of risk. However, it also offers an opportunity for businesses to strengthen workplace culture, improve consistency in management practices and build greater employee trust.
Those organisations that adapt early — embedding good processes rather than reacting to disputes — will be in the strongest position as the reforms take effect.
For further information, please contact Sally Togher, Head of Employment at Raworths based in Harrogate, North Yorkshire.
Published on 31 March 2026
This article first appeared in the Yorkshire Post on 9 March 2026
The information and any commentary contained in this briefing is for general information purposes only and does not constitute legal or any other type of professional advice.
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