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Straight answer for UK employers

What does the Employment Rights Act 2025 mean for small businesses?

Reviewed by Sam DickinsonChecked 4 September 20269 minute read

The short answer

The Employment Rights Act 2025 became law on 18 December 2025, but its measures are being phased in. Changes already operating include day-one paternity and ordinary parental leave, revised Statutory Sick Pay and stronger collective-redundancy remedies. Other measures—including six-month unfair-dismissal eligibility—are scheduled for 2027 and must not be treated as current law early.

What employers need to know

  • From 6 April 2026, SSP starts on the first qualifying day and the lower earnings limit was removed.
  • Paternity leave and ordinary parental leave became day-one rights on 6 April 2026.
  • Holiday and holiday-pay records must be retained for at least six years from 6 April 2026.
  • The maximum protective award for failing to collectively consult increased to 180 days’ pay.
  • ACAS says ordinary unfair-dismissal eligibility changes from two years to six months on 1 January 2027.
  • Many other 2027 measures remain subject to implementation detail and consultation.

A practical process

Step 1

Separate live law from future reform

Maintain a dated implementation tracker based on ACAS and GOV.UK.

Step 2

Update live policies now

Correct sickness, paternity, parental-leave and holiday-record processes for April 2026 changes.

Step 3

Prepare managers

Explain what has changed and what has not, particularly dismissal eligibility.

Step 4

Schedule 2027 reviews

Review contracts, probation, dismissal, flexible working and casual-hours processes as commencement details are confirmed.

Example

A September 2026 dismissal should be assessed under the law in force in September—not under a planned January 2027 qualifying-period change.

When to take advice

Implementation dates can change. Recheck ACAS and GOV.UK immediately before changing a policy or making a legal decision.

Frequently asked questions

Is unfair dismissal already a day-one right?

No. ACAS states the planned change is to a six-month qualifying period from 1 January 2027, not a day-one right.

Should policies mention future changes now?

Planning notes can, but operative policies should clearly distinguish current rules from future changes.

Official and primary sources

General information for employers in Great Britain, not legal advice. Check current official guidance and obtain advice for your circumstances.

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