Employment Rights Act 2025 - your questions answered

Following the Act finally receiving Royal Assent in December 2025, employment law specialist Darren Newman presented a Brightmine webinar on this multi-pronged piece of legislation in which he tackled questions - some straightforward, some more arcane - submitted by attendees. Here he tackles some of the questions he didn't have time for during the session and revisits key points.

Topics exercising attendees included changes to unfair dismissal and fire and rehire, trade union reforms and the establishment of the Fair Work Agency.

Unfair dismissal

1. With regards the unfair dismissal rights changing to six months: if an employee is absent for a period of time during their first six months and therefore loses a significant amount of time to be trained and assessed, is there an option of extending the qualifying period to reflect this?

A: No. The question of whether or not an employee has qualified for unfair dismissal protection is simply a matter of the length of time they have been employed under a contract of employment. As long as such a contract is in place, continuous service accrues even if the employee is off sick or on holiday for some or all of that time. Once the employee has been employed for six months (when the new law is brought into force) unfair dismissal protection will apply.

This does not mean that the employee cannot be dismissed. The employer could still extend a probation period and dismiss the employee at the end of that on the grounds of capability. But crucially the employee would be able in those circumstances to argue that the dismissal was unfair. Whether or not the employer had behaved reasonably in dismissing the employee would then be a matter for the tribunal to decide.

2. If someone is dismissed in the last week of their first six months but we pay in lieu of notice, will they still qualify to claim unfair dismissal?

A: Yes. This is an easy trap to fall into. The qualifying period for unfair dismissal is measured up to the "effective date of termination" (EDT), which is defined in s.97(1) of the Employment Rights Act 1996. Where the employee is dismissed without notice, the EDT is the day on which the termination "takes effect". Where the employee is dismissed with notice, the EDT is the day on which the notice expires.

All employees, however, are entitled to a minimum period of notice after they have worked for the employer for at least one month - see s.86 of the Employment Rights Act 1996. For the first two years of their employment that minimum period is one week. Note that the minimum period of notice does not apply if the employee is guilty of gross misconduct (s.86(6)).

For the purposes of qualifying for unfair dismissal, that minimum notice of one week is included in the overall period of employment (s.97(2)). So if an employee is dismissed without notice, their continuous employment is measured up until the end of the one week's notice that they should have been given. This is irrespective of any payment in lieu of notice that the employer might give.

This means that an employer cannot safely wait until the final week of a six-month probation period to dismiss the employee. If it does so then (unless the employee is guilty of gross misconduct) the minimum period of notice will be added to the overall period of continuous service and the employee will qualify for unfair dismissal protection.

Note that this rule only applies to the one week's notice that the employer must give under s.86. A longer contractual notice period will not be added to the continuous period of employment if the employee is dismissed without notice.

3. What will the unfair dismissal changes mean for redundancy dismissals - will this be a six-month qualifying period and will statutory redundancy pay still payable after two years?

A: There is no change being made to the qualifying period for a redundancy payment, which will remain at two years. When it comes to the fairness of any dismissal for redundancy, however, the six-month qualifying period will apply. So an employee who is made redundant after one year of service will not qualify for a redundancy payment but will be entitled to bring an unfair dismissal claim.

4. Will there be a statutory dismissal process for the new six-month probationary period?

A: No, there won't. Part of the compromise of moving from unfair dismissal being a "day one" right to having a six-month qualifying period is that all of the provisions relating to an "initial period of employment" are removed. This is perhaps just as well as it was far from clear what test of fairness would apply in that initial period and the Government would have struggled to frame the necessary regulations in a way that made sense.

The position from January 2027 will instead be very straightforward. An employee with six months' continuous service will qualify for ordinary unfair dismissal protection and an employee with less than six months' service will not. There will be no special rules or procedures applying to dismissal in the first six months and no need for the employer to demonstrate a fair reason for dismissal or argue that the decision to dismiss was in any way reasonable. As is already the case, there will be day-one protection for unfair dismissal where the reason for dismissal is one of the "automatically unfair" reasons such as whistleblowing, pregnancy or trade union membership.

5. How does the six-month qualifying period affect fixed-term contracts for nine months to one year? How would we end this employment?

A: The expiry of a fixed-term contract without renewal is counted as a dismissal for the purposes of the right not to be unfairly dismissed (see s.95(1)(b) of the Employment Rights Act 1996). If that happens after the employee has achieved six months' service (under the new provisions), the normal rules of unfair dismissal will apply. The question will be why the contract was not renewed and whether that was for a potentially fair reason, such as redundancy. The tribunal will then consider whether or not the employer has acted reasonably in terminating the contract. The fact that the contract was for a fixed term does not give the employer any additional defence to an unfair dismissal claim.

6. Does the employment length for unfair dismissal start from the date contract was signed or the actual first day at work?

A: Continuous employment begins "with the day on which the employee starts work" (s.211(1)(a) of the Employment Rights Act 1996) rather than the day on which the contract is agreed or signed.

7. What process should be followed where a dismissal occurs after six months' service?

A: Unfair dismissal law will apply after six months' service in exactly the same way it currently does after two years' service. So there is no reason to believe there will be any significant difference in the way tribunals will approach cases where the employee is dismissed after six months. The same requirement for a potentially fair reason for dismissal, a fair procedure and a decision to dismiss that falls within the range of reasonable responses will apply.

8. Does local government continuous service count towards the qualifying period or only service in the current employment for unfair dismissal?

A: For the purposes of qualifying for unfair dismissal, a move from one local authority to another (except in the case of a TUPE or TUPE-equivalent transfer) will count as a break in employment. Service with a previous local authority does not count towards the overall service of a council employee.

The position is different when it comes to continuous service for the purposes of the calculation of a redundancy payment. The Redundancy Payments (Continuity of Employment in Local Government etc) (Modification) Order 1999 provides for consecutive periods of employment in local government to be treated as one continuous period for the purposes of qualifying for - and calculating the amount of - a redundancy payment. The Order is limited to redundancy payments, however, and does not put local government employees in a special position when it comes to qualifying for unfair dismissal.

Harassment

9. What actions should we be taking to prepare for the responsibility to take all reasonable steps to prevent sexual harassment, including from third parties?

A: There is currently a duty on an employer to take "reasonable steps" to prevent sexual harassment (s.40A of the Equality Act 2010). The Employment Rights Act 2025 changes that to a duty to take "all" reasonable steps and the Government has indicated that this change will be made in October 2026. I am not convinced that this makes any real difference to the duty that already exists. The word to emphasise here is not "all" but "reasonable". The employer should take such steps as it is reasonable to expect an employer to take to prevent sexual harassment. Adding the word "all" into the mix doesn't mean that the employer's steps will now have to go beyond what it is reasonable to expect an employer to do. The Equality Commission has already published guidance on taking reasonable steps to prevent harassment and I don't think this will need to be updated significantly.

10. Would third-party harassment apply to shared serviced office buildings, for example employees of one business moving around communal spaces?

A: Yes. It doesn't matter where the harassment happens, what matters is whether or not the employee is acting in the course of their employment when they are harassed. An employee who is at work and moving around a communal space in a shared office building is highly likely to be acting in the course of their employment and so the employer will be liable for any harassment by employees of other companies using the same space if the tribunal is persuaded that they failed to take all reasonable steps to prevent such harassment from occurring in the first place.

11. With third-party harassment changes, will this apply if the employee is overseas and the harassment happens there?

A: Yes. Provided the employee is sufficiently based within the UK so that the Equality Act applies to their employment then harassment that occurs overseas will potentially fall within the scope of the new provision. Any harassment must, however, take place while the employee is acting in the course of their employment. It may be that something that happens during a social event closely connected with a business trip will fall within the scope of the new provision, but a separate weekend break taken by the employee while on the trip will not - each case will depend on its own facts. Liability will only arise when the employer has failed to take all reasonable steps to prevent the harassment and a key factor in a tribunal deciding that is likely to be the extent to which the employer could control or influence the environment the employee was working in. With foreign travel it may be that there is less that the employer can reasonably do to prevent harassment and that would be a factor that the tribunal would take into account.

Statutory sick pay (SSP)

12. Does the employee still have to be off sick for four days or more to get SSP from day one?

A: No. The three-day "waiting period" for SSP will be abolished from April 2026. SSP will be payable from the first qualifying day of absence.

13. How will the SSP changes affect zero-hour contract workers?

A: SSP is already payable to zero-hour contract workers if they are engaged under a contract to provide work and are paid via PAYE. The changes do not alter that - although the removal of the lower earnings limit and the abolition of the three-day waiting period are likely to mean that more such workers actually receive SSP when they are ill.

14. How will SSP work for casual workers? In effect, they can pick up shifts, go off sick and then be paid and go and work somewhere else - is that correct?

A: Casual workers who count as employees for the purposes of SSP (essentially those who are paid under PAYE) will be entitled to SSP from the first day of their period of incapacity for work. However, they will only be paid in respect of days of absence that are "qualifying days". It is up to the employer and employee to agree what the qualifying days in a week are. Typically they are the days when the employee is required to work. But there must be at least one qualifying day in a week. If the parties agree that there is no requirement to work in a particular week but there is no agreement as to what the qualifying days are, then Wednesday is deemed to be the only qualifying day (see Reg 5 of the Statutory Sick Pay (General) Regulations 1982).

So if it is agreed that an employee will work on a particular day but is incapable of work, SSP will be payable. If they were to go and do similar work somewhere else on that day, then they would not be incapable of work and would not be entitled to SSP.

Trade unions

15. Will there be a requirement for employers to recognise trade unions?

A: Not exactly. There is already a statutory recognition procedure operating under the Trade Union and Labour Relations (Consolidation) Act 1992 that was introduced under the last Labour Government. The procedure is complex and is overseen by the Central Arbitration Committee which can award recognition to a union if it is satisfied (usually as the result of a ballot) that the majority of the workers in a bargaining unit want the union to be recognised. The Employment Rights Act 2025 makes a number of changes to this procedure that will make it easier for a union to win recognition and harder for an employer to use tactics in defeating a recognition claim that the Government believes are unfair. The fundamental position remains, however, that union recognition will be awarded only when the relevant part of the workforce wants it.

16. How does the union access piece impact organisations with existing union agreements in place?

A: It isn't entirely clear - at least not yet. The Government needs to draft detailed Regulations setting out how a union access agreement can be arrived at when the employer and union are unable to negotiate one. The Central Arbitration Committee will ultimately have to make a ruling on disputed points and I would expect that the Regulations will require them to take into account any existing arrangements when making a decision. It would clearly be undesirable if an employer was required to facilitate what would in effect be a turf war between rival unions.

17. In a multi-site, non-unionised organisation, does the right for trade unions to request access apply to individual sites, or is the right for the trade union to request access to the organisation as a whole, meaning that if the employer affirms, the union then has the right to access all sites?

A: The new right of access talks only of access to a "workplace" and agreeing access to one workplace does not automatically entail agreeing access to all other workplaces that the employer might operate from. However, where the employer operates a number of similar sites it is highly likely that the Central Arbitration Committee (CAC) would award access on the same basis to each site should the union request it. There may be something in the final Regulations that gives the CAC some guidance about to how to deal with requests for access that are made with respect to a number of similar sites operated by the same employer.

Fire and rehire

18. Where an employee has an agreed flexible working pattern in place, will we be unable to vary their hours without their agreement due to the fire and rehire changes? Should we therefore be extra-careful about agreeing permanent changes to shifts/working hours under flexible working legislation?

A: This is a good point. I would always advise that any contractual changes agreed as a result of a flexible working request should include a review clause to ensure that the employer can revert to the original contractual arrangements if the needs of the business change or if the new working pattern causes unforeseen problems. This is especially important if the change is made after the rules on fire and rehire come into force

19. If it is now illegal to fire and rehire, how do we go about making contractual changes should the employees refuse upon completion of consultation?

A: If the variation would count as a "restricted variation" - for example if it results in reduced pay or a change in the number of hours to be worked - then the employees are entitled to refuse to agree to the change. The only way to make the change without unfairly dismissing the employees (once these provisions come into force) will be to persuade them to agree. One way to achieve this might be to insist that the change is included as part of any pay review or promotion. Whether this tactic would be effective depends of course on the nature of the change the employer wishes to impose.

20. Will an employer be able to vary a contract of employment without falling foul of the fire and rehire provisions if it is relying on a variation clause?

A: A variation in contract that is authorised by a valid variation clause that already forms part of the contract of employment will not be affected by the new provisions on fire and rehire. Since the variation can be made without the specific agreement of the individual there is no reason why the employer would need to dismiss them for refusing to agree to the change. There are some question marks about how widely variation clauses can be drawn and the extent to which they can authorise significant changes in a contract of employment. Certainly any variation clause must be operated in a way that does not breach the implied term of mutual trust and confidence. How willing tribunals are to allow variation clauses to be used to make changes to core terms and conditions of employment is something that will slowly become clear over the coming years.

What is already clear, however, is that any variation clause will need to be in place for existing employees before January 2027 when the new provisions are currently expected to come into force. The insertion of a variation clause into an existing contract will come within the definition of "restricted variation" and so an employee who refuses to agree to the change will be protected from dismissal as a result.

Zero hours contracts

21. We have a few people who want to be on a zero hours contract (usually, those working intermittently prior to retirement). How do we keep those contracts?

A: The Employment Rights Act 2025 does not abolish zero hours contracts. When the guaranteed hours provisions are brought into force (they are currently scheduled for 2027) there will be circumstances in which an employer will be obliged to offer contracts that guarantee a certain number of hours. As yet we don't know what those circumstances will be. But whatever the final details, the worker will always be able to refuse the offer of guaranteed hours and continue to work under a zero hours contract if that is their preference.

22. Given that the details of zero hours measures aren't available, what should we be doing now to be prepared for what might come in? (We use zero hours staff for work that is genuinely variable and are trying to figure out how to manage these in the future.)

A: These measures are not due to be implemented until sometime in 2027 and it is difficult to know what can usefully be done before these Government publishes details of its proposals.

However, the overall policy is that an employer should guarantee as many hours to employees as it reasonably can. If there is a consistent pattern of workers working in excess of the number of hours that are guaranteed it might be worth the employer rethinking its contracts to see if a higher number of guaranteed hours would be feasible - and whether or not workers would be likely to welcome that.

Fair work agency (FWA)

23. Is there any information about what the impact on employers will be from the FWA coming into effect from April? Are there any actions we should be taking to prepare for this?

A: The impact of the FWA depends very much on the size of its budget and this has not yet been published. I would expect any initial impact to be very modest as the FWA finds its feet and works on its internal organisation. Of the new powers the FWA will have, the most significant is probably the power to enforce compliance with the rules on statutory sick pay and paid annual leave under the Working Time Regulations. It is worth noting that the Employment Rights Act 2025 also introduces an obligation on employers to keep annual leave records that are adequate to show that they are compliant. Since the FWA will have the power to inspect these records, it might be worth checking that they are being kept in a way that clearly demonstrates that workers are being given all the leave and holiday pay to which they are entitled.