The Employment Rights Act 2025 is bringing the biggest changes to employment law in years. The new rules are being introduced in stages from January 2026 through to mid 2027, and almost every employer will need to review the way they manage their people.

If you employ staff, now is the time to make sure your contracts, policies and management practices are up to date.

Day One Rights – Already Here

Since April 2026, employees have been entitled to Statutory Sick Pay from their first day of absence.

Ask yourself:

• Have you updated your sickness absence policy?
• Do you have a structured return-to-work interview after every period of sickness?
• Are your managers confident in dealing with absence consistently and fairly?

Paternity Leave is also now a Day One right. If your family friendly policies haven’t been reviewed recently, they may already be out of date.

Unfair Dismissal – The Clock Is Ticking

Perhaps the biggest change for SMEs comes into force on 1 January 2027.

The qualifying period for ordinary unfair dismissal is reducing from two years to just six months.

Although the law starts in January, the practical impact begins much sooner. Anyone you recruit on or after 1 July 2026 will have completed six months’ service by January 2027 and will automatically gain unfair dismissal protection.

This means probationary periods have never been more important.

Consider whether:

• Your probation process is properly documented.
• Managers hold regular review meetings.
• Performance concerns are addressed early, not at the end of probation.
• Managers have the confidence and training to deal with underperformance before it becomes a legal risk.

A poorly managed probation period could quickly become an expensive tribunal claim.

New Duty to Prevent Sexual Harassment

From October 2026, employers must take all reasonable steps to prevent sexual harassment in the workplace.

Having a policy tucked away in your handbook will not be enough.

Employers will need to demonstrate that they have:

• Appropriate policies in place.
• Regular training for managers and employees.
• Clear reporting procedures.
• Ongoing monitoring and reinforcement of expected standards.

The emphasis is on prevention, not simply reacting after an incident has occurred.

Trade Union Changes

October also brings changes to employment contracts.

Employees must be informed in their employment contracts of their right to join a trade union if they choose. Further regulations to be finalised will strengthen trade union access to workplaces and make it easier for unions to recruit members and seek recognition.

Your contracts and employee handbook should be reviewed to ensure they reflect these new legal requirements.

Fire and Rehire – The Window Is Closing

Another significant change takes effect in October 2026.

Employers’ ability to dismiss employees and re-engage them on new terms and conditions – commonly known as ‘fire and rehire’ – will be severely restricted.

If your business is considering changes to contractual terms, such as working hours, pay arrangements, shift patterns or other key conditions of employment, and you anticipate resistance from employees, the time to act is now.

Once the new legislation is in force, employers will have far fewer options if agreement cannot be reached. Reviewing contracts, consulting with employees and implementing any necessary changes before October could save your business considerable time, cost and legal risk.

Longer Tribunal Time Limits

From October, the time limit for bringing many Employment Tribunal claims will increase from three months to six months.

Given the current delays in the tribunal system, employers could still be dealing with claims several years after the events that gave rise to them.

Good records, consistent procedures and properly trained managers will become even more important.

What Should You Do Now?

Rather than waiting until each change takes effect, sensible employers are preparing now by:

• Reviewing employment contracts.
• Updating employee handbooks and policies.
• Strengthening probation procedures.
• Introducing effective sickness absence management.
• Training managers in handling employee issues confidently and fairly.
• Implementing a robust sexual harassment prevention programme.
• Reviewing any proposed contractual changes before the new restrictions on ‘fire and rehire’ come into force.

These changes represent the most significant overhaul of employment law in many years. With the right preparation, they don’t need to become a burden.

At NewmanHR, I help small and medium-sized businesses understand what the law means in practice and put straightforward, cost-effective HR systems in place that protect the business while supporting employees.

If you’re unsure whether your business is ready, let’s have a conversation.

Book a free, no-obligation consultation, contact us here and we’ll review what you need to do before these changes affect your business.