Changes to employment law could be costly. How prepared are you?

Written by Karen Robinson, HR Consultant and Business Leader Coach at KR 4 HR Coaching

The Employment Rights Act 2025, with changes rolling out across 2026 and 2027, is being touted as the most significant overhaul of UK employment rights in decades. It’s not just tweaks, here and there, it’s a shift in how employers must think about fairness, process, and people risk to their business.

Whether you have one or 1000’s of employees, run your own business, lead a HR team, or steer business strategy, this isn’t just a compliance box ticking exercise. It’s about future-proofing your business or risking high financial and reputational damage.

So, what’s new?

There are over 28 significant changes to current employment law all together (not including secondary legislation), but here are the core essentials that can’t be ignored.

April 2026

• Day one right to statutory sick pay, seeing an end to the three waiting days.

• Day one right to paternity leave, meaning there is no longer a requirement for 26 weeks service.

October 2026

• Employers will be liable for the sexual harassment of their employees, including from third parties.

• Tribunal time limits will be extended from three to six months, giving employees a longer window to lodge claims. This will cover incidents from as early as April 2026 and onwards.

• Businesses must inform employees of their right to join a Trade Union

• Consultation with workers on how they would like their tips to be distributed must take place every three years.

January 2027

• Firing and then rehiring on worse terms and conditions will be considered automatically unfair unless the business is in legitimate financial distress. It also includes protections against replacing employees with agency staff or contractors to do the same work.

• Unfair dismissal after six months. One of the biggest shifts is the slashing of the qualifying period for unfair dismissal claims from two years to just six months from January 2027. But what this actually means, is that anyone taken on before July 2026 will automatically qualify in January 2027.

• The statutory cap on tribunal awards is also removed, meaning tribunals could award any amount of money based on actual loss.

Sometime in 2027*

• Further protection for pregnancy and those returning from maternity leave.

• Statutory bereavement leave

• People on zero hours and low hours contracts will gain the right to guaranteed working hours

• Compensation for cancelled shifts and reasonable notice for shift changes

• Stricter rules around refusing flexible working requests

• Mandatory gender pay gap and menopause action plan (voluntary from April 2026)

• Changes to rules around collective redundancy

• Further changes to Trade Union recognition and balloting

(*details yet to be consulted on, and defined)

But if HR isn’t your first language, let’s look at how you can safeguard your business and look after your people.

Here are some practical areas to act on now:

Recruitment and onboarding

• Update job descriptions and person specs in line with business needs

• Develop and standardise the interview process

• Standardise the onboarding process

• Set expectations around performance and probation reviews

• Be transparent about employment rights and internal support channels to build trust early.

Contracts and job offers

• Review all standard terms and conditions

• Ensure contracts clearly define probation periods and expectations.

Going forward, any changes will now need written engagement and clear business reasons, even for operational tweaks.

Probation and early performance reviews

• Six months isn’t long. Ensure all performance conversations are documented, consistent and fair.

• Provide coaching, interim feedback and clear improvement plans. There should be no surprises.

• Train managers to recognise behaviour/health/disability/harassment issues early and adjust their support where required.

Real world impact: Poorly documented performance dismissals or rushed/forgotten probation reviews will now lead to significant tribunal exposure.

Policies and Procedures

• Update policies to reflect the six month protection window.

• Review and update harassment policies to include the new “all reasonable steps” requirement, including third-party conduct and reporting pathways.

• Update your absence policy to make it more robust and reflect changes to SSP.

Tip: Policies should provide how you will comply, not just that you will.

Leadership and line manager training: The unsung hero’s

Line managers are the first line of legal risk and employee experience. Training should cover:

• How to correctly handle performance concerns

• How to have difficult conversations

• Recognising and preventing harassment, especially from third parties

• How to document decisions, conduct investigations, and engage staff empathetically.

Pro tip: Line managers are the people your team interacts with day in day out. They are their first port of call when things become difficult. They must lead by example.

Internal communication and feedback

Communication is key to a successful and smooth change.

• Use various forms of communication to ensure everyone has access to the information

• Be transparent, and ask for employee input

• Host drop-ins so people can ask questions about the changes with HR/leadership

• Train everyone about sexual harassment, and what to do if they are a witness or victim of it.

Hint: Communicating why changes are happening protects your team, builds trust and reduces pushback.

2027 strategy and beyond

• What should you include to support your gender pay gap and menopause action plans? What changes need to be made in the business?

• How can you offer zero and low hours workers guaranteed shifts?

Why being proactive beats being reactive

The new laws are all about being proactive, early employee engagement, risk minimisation and documenting everything. Not about reacting when the damage has already been done and making excuses because of lack of foresight.

Taking the initiative means:

• Avoiding costly tribunals and limitless compensation awards

• Strengthening employer brand and employee trust

• Gaining competitive advantage

• Embedding fairness so it actually feels fair across the employee lifecycle.

This isn’t a legal compliance project, it’s a cultural and operational transformation that reduces risk and increases resilience.

Proactively leading the change

The Employment Rights Act 2025 isn’t something to watch from the sidelines. It demands active leadership, clear strategy and thoughtful change management.

HR and business leaders who act now, by revising contracts, strengthening policies, upskilling management, and fostering a transparent culture, will not only avoid costly repercussions but also shape workplaces that are fairer, safer, more engaged and ultimately more successful.

Change isn’t coming, it’s here. Get ahead of it, not trailing behind it.

Hi, I'm Karen Robinson, HR Consultant and Business Leader Coach. I am a great believer that "Happy People are Productive People" and I help ambitious, SME Leaders to grow their business through their greatest asset - their people.

Visit my website www.kr4hr.com