The Employment Rights Act (2025)

Employment law is complex, but here’s a quick guide to dealing with the Employment Rights Act 2025 (ERA) - the largest overhaul of UK employment law in decades.

The Employment Rights Act 2025 (ERA) is the largest overhaul of UK employment law in several decades. Among the main areas covered are stronger protections for workers, new obligations around zero hours contracts and predictable working, tighter rules on dismissal, and major changes to sick pay and family leave.

Workers’ rights are important, and at Driver Hire we’re proud of our record of looking after our candidates – which we’ll continue to do. But it’s likely that for employers, hiring and managing staff will be more complicated and potentially more costly under the new rules.

Working with a high-quality recruitment partner is more important than ever – helping to ensure effective, flexible management of your workforce, appropriate cost control and full compliance with the law.

Employment law is complex – but here’s a quick guide to dealing with the ERA.

 

Key Provisions of the ERA

New Day One Rights (from April 2026)

  • Statutory Sick Pay (SSP) – with removal of Lower Earnings Limit
  • Family Leave

Trade Union / Industrial Action Reforms (through 2026)

  • Electronic and workplace balloting
  • Reduced notice for industrial action, simplified ballots etc
  • Dismissal for taking part in industrial action automatically ‘unfair’ (from Feb)

Zero Hours and Predictable Working Rights (late 2026 into 2027)

  • Guaranteed hours after reference period
  • Reasonable shift notice and compensation for short-notice cancellation

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Cause

Plus further measures including:

  • ‘All reasonable steps’ duty on sexual harassment
  • ‘Fire and rehire’ ban
  • Unfair dismissal claim qualifying period reduced from 2 years to 6 months

A new government body, the Fair Work Agency has been created to manage the implementation of the new rules.

 

Important Note: Much of the detail of the new ERA rules is subject to ‘secondary legislation’, which has not yet been finalised. That means that the exact way in which the new rules will be applied will only become clear in the coming months. As that happens, we’ll update our pages.

 

Recommended Actions for Employers

Whilst many details remain unclear, there’s plenty that employers can do to deal with the new regulations. For example:

  1. Budget for higher workforce costs – these are likely due to increased SSP and higher HR admin costs, for example
  2. Audit scheduling practices – to prepare for compliance with guaranteed hours and new notice periods
  3. Strengthen HR processes – in areas such as dismissal or redundancy, whistleblowing and harassment cases
  4. Train managers – anyone involved in managing people should have a high level understanding of the new rules
  5. Plan to use agency staff strategically – finding a good partner will help you manage the new regime effectively, building in flexibility and cost control whilst also maintaining compliance

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Key Dates

Note – these dates are subject to change as the Government rolls out the new rules.

February 2026

Industrial Action Reforms

  • Dismissal for taking part in industrial action automatically “unfair”; notice for industrial action reduced to 10 days; simplification of ballot notices; removal of requirement for picket supervisors

April 2026

New Day One Rights

  • Statutory Sick Pay and Family Leave, with removal of Lower Earnings Limit

Fair Work Agency (FWA) launches

  • From 7 April – role is to enforce the new rules, also including minimum wage, holiday pay, agency conduct, labour exploitation

August 2026

Union balloting reforms

October 2026

Sexual Harassment duties strengthened

  • Employers must take “all reasonable steps” to prevent sexual harassment, and new laws may make employers liable for third-party harassment

 

Late 2026 into 2027

Zero Hours and Predictable Working Rights

  • Guaranteed Hours offer after reference period; reasonable shift and cancellation notice (including for agency workers, with anti-avoidance rules in place)

Unfair Dismissal Reforms

  • Qualifying period reduced from 2 years to 6 months; removal of compensation cap

Strengthened Collective Redundancy Duties

  • Protective award maximum increased to 180 days’ pay; wider consultation triggers

New Protections for Pregnant Employees and Mothers

  • Enhanced dismissal protection after return from maternity leave (to 6 months)

Fire and Rehire practices banned

 

Factsheet

For further details, refer to the Factsheet: Employment Rights Act 2025 published by the Department for Business & Trade.

Driver Hire: Here to Help

For over 40 years, Driver Hire has supported employers in managing their workforce effectively. Implementing new legislation can be tough, and not every agency or employer will get it right.

We’re investing time and resources to ensure that everyone who works with Driver Hire – our clients and our candidates – gets the best from the new Employment Rights Act, and avoids the pitfalls. Talk to us about how we can help you.