The Employment Rights Act 2025 became law in December 2025. It is being switched on in stages, and most small employers have already lived through the first two waves without noticing. The next one is different. It changes how you hire, how you manage probation and how you let people go.

What is already in force

• Since 6 April 2026: Statutory Sick Pay is paid from day one of sickness, with no waiting days, and the lower earnings limit has gone, so low-paid and part-time staff now qualify. Paternity leave and unpaid parental leave are day-one rights.
• Since 7 April 2026: the Fair Work Agency exists. It brings enforcement of minimum wage, holiday pay and other rights under one roof, with powers to inspect employers.
• Since October 2026: employers must take all reasonable steps to prevent sexual harassment, and must not permit harassment of staff by third parties, such as customers, clients or contractors. Tipping rules have been tightened, staff must be told of their right to join a union, and tribunal time limits have been extended from three to six months, which gives unhappy employees longer to bring a claim.

The third-party harassment duty matters a lot for Havering’s pubs, salons, shops and care providers, where staff deal with the public all day. “We can’t control the customers” is no longer a defence on its own.

What changes on 1 January 2027

• Unfair dismissal after six months. For dismissals from 1 January 2027, the qualifying period falls from two years to six months. Anyone who has worked for you since July 2026 could be covered when the rule starts.
• Uncapped compensation. The cap on the compensatory award is being removed, so a badly handled dismissal can cost far more than before.
• Fire and rehire. Dismissing staff and re-engaging them on worse terms becomes much harder.

The practical effect is that a six-month probation period now has to be a real probation period: clear objectives, regular reviews, written notes and a decision before the six months are up.

What follows later in 2027

The government’s timetable includes reforms to zero-hours contracts, stronger flexible-working rights, bereavement leave including pregnancy loss, tougher protection for pregnant women and new mothers, and mandatory gender-equality and menopause action plans for larger employers. Dates and detail for several of these are still to be confirmed in regulations.

If your business runs on zero-hours or variable-hours staff, which is common in hospitality, events and care, watch this closely. The direction is towards guaranteed hours that reflect what people actually work.

The cost nobody budgets for

The Act does not just add rights. It raises the price of getting HR wrong. Day-one sick pay, longer tribunal time limits, six-month unfair dismissal protection and uncapped awards together mean that informal management is now a real financial risk for a ten-person business.