The Employment Rights Act 2025 (ERA) came into force at the beginning of April 2026. It is the biggest overhaul of UK employment law in decades. Alongside the introduction of the Fair Work Agency, there are significant new rights for workers, some of which are already in force, with more to come between now and 2027.
The first major change is to Statutory Sick Pay (SSP). The three waiting days rule has been removed and workers can now claim SSP from day one of their employment. In addition, the £125 lower earnings limit for SSP has also been abolished.
Employers also need to be aware that, in the unlikely event that workers embark on industrial action, the procedural hurdles for unions to organise a strike have been lowered. Balloting has been simplified and employers can no longer dismiss workers after the end of the ‘protected period’.
Two other major changes in the Act – parental leave and claims for unfair dismissal – are still under consideration and are unlikely to come into effect until 2027. If approved, employees will have the right to parental leave from day one (currently 26 weeks). Employees will also be able to claim unfair dismissal after six months in a role (currently two years).
Also included in secondary legislation are changes to zero-hours contracts which will apply to agency workers. Once someone has worked for a qualifying period – expected to be 12 weeks, although this is yet to be confirmed – they will be entitled to a contract reflecting their working pattern over that period. Workers must be given reasonable notice of changes to shift patterns and compensated for short-notice cancellations.
Finally, what is the Fair Work Agency? It brings together the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, the Directorate of Labour Market Enforcement and HMRC’s National Minimum Wage (NMW) unit. The Agency’s expected focus will be on NMW, holiday pay and SSP.
Commenting on the changes, Chris Chidley, Driver Hire’s CEO, said: “Workers’ rights are important and we’re proud of our record of looking after our candidates. It’s likely that these changes will make hiring and managing staff more complicated and more costly. Driver Hire can help clients navigate the new rules, minimise risk and find the best staffing arrangements for their business. The use of quality agency staff can help reduce disruption and exposure to any problems caused by staffing issues.”