7. April 2026

The Employment Rights Act 2025: What every growing business must do right now 

Today, the Fair Work Agency officially opened its doors. 

That sentence alone should be enough to prompt any business owner to pay close attention. The Employment Rights Act 2025 — described by employment law experts as the most significant reform to UK workplace legislation in a generation — is no longer a future concern. It is here. It is active. And it has considerable enforcement powers behind it. 

For growing businesses in particular, the window to act is now. Not in six months. Not when you get around to it. Now. 

Here is what you need to know and what you need to do next. 

The bigger picture: a wave of legislative change 

The Employment Rights Act 2025 does not stand alone. Over the past two years, Parliament has enacted a series of reforms that collectively represent the largest overhaul of employment law since the Employment Rights Act 1996. Alongside the ERA 2025, businesses need to be aware of: 
 

• Worker Protection (Amendment of Equality Act 2010) Act 2023 — a proactive duty to take reasonable steps to prevent sexual harassment in the workplace, including by third parties 
   

• Flexible Working Reforms 2023 — employees may now request flexible working from their very first day of employment, with tighter timescales for employer responses 
   

• Neonatal Care (Leave and Pay) Act 2023 — a new statutory entitlement for parents of babies receiving neonatal care, in force from April 2025 
   

• Carer's Leave Act 2023 — employees are entitled to one week of unpaid carer's leave per year from day one of employment 

Outdated contracts and non-compliant handbooks are no longer just an operational inconvenience. They are active legal and financial liabilities. 

What the Employment Rights Act 2025 changes right now 

The following changes are in force from April 2026: 

Statutory Sick Pay — from day one. 

The three-day waiting period has been removed. SSP is now payable from the first full day of sickness absence, calculated at 80% of average weekly earnings or the flat weekly rate of £123.25 — whichever is lower. The Lower Earnings Limit has also been removed, widening eligibility significantly. Employees on phased returns to work qualify for SSP on the days they are not attending. 

Day-one rights for paternity and parental leave. 

The previous 12-month service requirement for Unpaid Parental Leave has been removed. Employees can give notice from day one of employment. Paternity Leave can also be given notice of from day one. Critically, fathers and partners can now take Paternity Leave after Shared Parental Leave — the two entitlements are no longer mutually exclusive. 

Bereaved parental leave — a new day-one right. 

Where an employee's child is less than a year old (or within the first year of adoption) and their mother or primary adopter has died, the employee may be eligible for up to 52 weeks of leave. This is a day-one right. There is no statutory pay requirement — paid leave remains at employer discretion. Policies need to be created or updated to reflect this. 

Statutory Maternity Allowance — increased. 

Statutory maternity allowance is now: first 6 weeks at 90% of salary, followed by 33 weeks at £194.32. 

Collective redundancy: protective award doubled. 

The maximum protective award for failing to properly consult when proposing 20 or more redundancies at one establishment within a 90-day period has increased from 90 days' pay to 180 days' pay per affected employee. For any business contemplating restructuring, the financial exposure from procedural failure has doubled. 

Whistleblowing protections extended. 

The law now makes clear that workers who report sexual harassment are explicitly covered by whistleblowing protections against detriment and unfair dismissal. Previously, a worker would have to argue their disclosure fell under an existing category such as health and safety. This ambiguity has been removed. 

The Fair Work Agency is operational. 

Launched on 7 April 2026, the Fair Work Agency (FWA) is a single enforcement body that consolidates the enforcement of National Minimum Wage, Statutory Sick Pay, holiday pay, employment agency regulations, and labour exploitation provisions. What makes it fundamentally different from previous enforcement mechanisms is this: it does not need an employee to file a complaint before it acts. 

The FWA's powers include: 

• Proactive investigations based on its own intelligence and risk assessments 

• Access to business premises — inspectors can enter, examine records and gather evidence 

• Compelled attendance — individuals can be required to attend interviews with the agency 

• Notices of Underpayment — requiring repayment within 28 days 

• Civil penalties of up to 200% of any underpayment, on top of the repayment obligation 

• Tribunal claims brought on behalf of workers — even if the affected worker chooses not to 

• Historical investigations — the agency can investigate breaches going back up to six years 

• Public naming of non-compliant employers 

• Cost recovery — enforcement costs can be charged back to the non-compliant employer 

What is coming next 

The Act is phased through to 2027. In October 2026, fire-and-rehire restrictions come into force (automatically unfair for core contractual changes), employment tribunal time limits extend from three to six months, and a strengthened duty to take 'all reasonable steps' to prevent sexual harassment — including by third parties — takes effect. 

In January 2027, the unfair dismissal qualifying period drops from two years to six months, with compensation uncapped. This is projected to extend protection to 6.3 million additional employees. Zero-hours contract workers will gain rights to a guaranteed hours offer and compensation for short-notice shift cancellations. 

Why growing businesses are most exposed 

Most growing businesses are operating on people policies written during an earlier, simpler phase of their growth. Employment tribunals are already seeing a rise in claims linked to new legislation. HMRC and the Equality and Human Rights Commission have signalled increased enforcement activity. 

There are four compelling reasons to act without delay: 

• Financial exposure — tribunal awards are uncapped in many scenarios; a single claim can cost tens of thousands of pounds in legal fees alone 
   

• Operational risk — unclear policies create inconsistency, grievances, and management uncertainty at the very moments when clarity matters most 
   

• Talent and culture — employees are increasingly aware of their rights; businesses that visibly uphold those rights attract and retain better people 

• Insurance requirements — many Employment Practices Liability Insurance policies now require demonstrable compliance programmes as a condition of cover 

How Integritis can help 

At Integritis, our People function is one of the three pillars of our integrated Business Operations model — alongside Money and Assurance, making up MAP. We offer a structured, fully managed compliance programme designed to bring your people practices into full alignment with current legislation and keep them there. 

Whether you need a one-off policy overhaul, interim HR cover, or an integrated operating partner that keeps your engine room running while you focus on growth — we are built for exactly this moment. 

Talk to us today. The Fair Work Agency is already open for business. Make sure you are ready.