Employment Act 2025

Let’s be honest — employment law can feel like a moving target.

Just when you think you’ve got things nailed down, along comes a new Act with a whole new set of rules. Enter theEmployment Act 2025 (previously known as the Employment Bill).

This is one of the biggest changes to UK employment law in years, and while not everything lands at once, there’s plenty here that employers should start preparing for now. The good news? None of it needs to be scary — as long as you know what’s coming.

So, what is the Employment Act 2025?

The Act received Royal Assent in late 2025 and introduces wide-ranging reforms rolling out through 2026 and 2027. Its aim is to modernise employment rights, improve fairness at work and create clearer expectations for both employers and employees.

If you like your information straight from the source, ACAS has an excellent overview here:
https://www.acas.org.uk/employment-rights-act-2025

Day-one rights for parental leave

From April 2026, employees will be able to give notice for paternity and parental leave from their first day of employment. The usual qualifying service requirement is removed.

For employers, this means:

Policies and handbooks may need updating
Managers should be prepared for requests much earlier in employment
Consistent handling is key
It’s a clear move towards supporting working families from the outset — and planning ahead will help things run smoothly.

Statutory Sick Pay from day one

Also from April 2026, Statutory Sick Pay (SSP) is getting a refresh:

SSP becomes payable from day one of sickness
The lower earnings limit is removed, meaning more workers qualify
This widens eligibility significantly, so it’s worth reviewing absence management and payroll processes now.

Guaranteed hours: more certainty, less guesswork

This is a big one, particularly for businesses that rely on flexible staffing.

Under the Employment Act 2025, workers who have been regularly working consistent hours over a reference period will gain the right to request a guaranteed-hours contract that reflects what they actually work.

This applies to:

Zero-hours contracts
Low or variable hours contracts
Agency workers (with responsibilities shared between the agency and the hirer)
Employers don’t have to accept every request automatically — but if you refuse, you’ll need a clear and genuine business reason, provided in writing.

What should employers be thinking about?

Are “flexible” contracts genuinely flexible, or fairly predictable in reality?
Are managers equipped to handle these requests consistently?
Would formalising hours actually improve retention and engagement?
ACAS guidance on variable hours contracts is a useful starting point:

https://www.acas.org.uk/zero-hours-contracts

Compensation for cancelled or changed shifts

If your business uses rotas or shift-based work, this one really matters.

The Act introduces compensation rights when shifts are:

Cancelled
Shortened
Moved to a different date or time
…with insufficient notice.
The principle is simple: if someone has planned their life around working, last-minute changes shouldn’t leave them out of pocket.

While exact notice periods and compensation rates will be confirmed in secondary legislation, employers should expect:

Minimum notice requirements
Compensation linked to hours lost or disrupted
These rights to apply to agency workers too
In practice, this means:

Last-minute rota changes could now cost money
Better forecasting and planning really matter
Early communication isn’t just polite — it’s protective
This is especially relevant in sectors like hospitality, care, logistics and manufacturing, where shift changes are common.

Unfair dismissal: qualifying period reduced

From January 2027, the qualifying period to bring an unfair dismissal claim drops from two years to six months. That’s a huge shift.

It means:

Probation periods matter more than ever
Performance management must be fair, documented and consistent from early on
“It’s under two years” will no longer be a safety net
Good onboarding and clear expectations from day one will make all the difference here.

Fire and re-hire becomes much harder

From October 2026, dismissing staff and re-engaging them on worse terms (often calledfire and re-hire) will be automatically unfair in most situations, unless there is genuinely no reasonable alternative.

Consultation, transparency and exploring all other options will be essential before making contractual changes.

A new Fair Work Agency

From April 2026, a new Fair Work Agency will bring together enforcement of key employment rights, including:

Holiday pay
Statutory Sick Pay
Certain worker protections
In short: enforcement becomes more joined-up, and employers should expect closer scrutiny if things aren’t compliant.

What should employers do now?

You don’t need to panic — but you do need a plan.

Start with the basics:

Review contracts, handbooks and policies
Audit how you use flexible and variable hours
Check how rotas are planned and communicated
Make sure managers understand what’s changing
And remember, good employment practice isn’t just about compliance. Businesses that offer clarity, fairness and decent communication tend to attract better people — and keep them.

Where to get further support

For clear, reliable guidance, we always recommend:

ACAS – practical advice, templates and updates
https://www.acas.org.uk
GOV.UK – official announcements and timelines
https://www.gov.uk
And of course, if you want to talk through what these changes mean for your hiring strategy, use of temporary staff or workforce planning, BIG ANT is always happy to help. No jargon. No judgement. Just honest, practical advice.