Disclaimer: This article is provided for general information and educational purposes only and does not constitute legal advice. Employment law changes frequently, and some provisions of the Employment Rights Act 2025 are being introduced in stages. Businesses and individuals should check the current legal position and obtain appropriate professional advice where necessary.

Employment law compliance is changing rapidly across Great Britain. Employers are facing increased expectations around worker protection, fair treatment, record keeping, equality, flexible working, whistleblowing and transparency.

The Employment Rights Act 2025 has introduced one of the most significant programmes of workplace reform in recent years. Some provisions have already taken effect during 2026, while others are scheduled for implementation during 2027.

For businesses, compliance now requires more than simply having employment contracts and workplace policies in place. Organisations need to review whether those documents reflect current law, whether managers understand their responsibilities and whether employment practices are applied fairly in everyday situations.

The Employment Rights Act 2025

The Employment Rights Act 2025 became law on 18 December 2025 and introduces a wide range of reforms to existing employment legislation.

Implementation is being phased across 2026 and 2027.

This means businesses need to be particularly careful when reading commentary about the reforms. Some rights are already in force, whereas others have been legislated for but have not yet commenced.

Employers should therefore check the commencement date of individual provisions rather than assuming that every measure contained within the Act already applies.

Statutory Sick Pay From the First Day of Illness

One significant change took effect on 6 April 2026.

Statutory Sick Pay is now payable from the first qualifying day of sickness absence rather than beginning after the previous waiting period.

The lower earnings limit for eligibility has also been removed.

This means employers should ensure payroll systems, absence policies and employment documentation reflect the new rules.

Businesses should also consider how sickness absence policies interact with disability law.

A disabled employee may require reasonable adjustments in connection with disability-related absence, meaning employers should avoid applying sickness policies mechanically without considering individual circumstances.

Paternity and Parental Leave

Changes introduced on 6 April 2026 also strengthened family-related employment rights.

Paternity leave and ordinary unpaid parental leave became day-one rights, meaning employees no longer need to complete a qualifying period before becoming eligible to take the relevant leave, subject to the applicable statutory requirements.

Employers should therefore review:

• Family leave policies.
• Employee handbooks.
• Manager guidance.
• Payroll procedures.
• HR documentation.

Outdated policies can create confusion and potentially lead to incorrect decisions.

Holiday Pay Record Keeping

Record keeping is becoming an increasingly important area of compliance.

From 6 April 2026, employers are required to retain records relating to annual leave and holiday pay for at least six years.

This creates an important administrative responsibility for businesses.

Employers should be able to demonstrate:

• How much annual leave an employee has taken.
• How holiday entitlement has been calculated.
• How holiday pay has been calculated.
• Whether statutory entitlement has been provided correctly.

Accurate documentation can also prove valuable if a dispute later reaches an employment tribunal.

The Fair Work Agency

Another major development during 2026 has been the creation of the Fair Work Agency.

The agency was established in April 2026 and brings together a number of labour-market enforcement functions.

Its responsibilities include areas such as enforcement concerning minimum wage rights, employment agency standards and certain forms of worker exploitation.

The wider trend is therefore towards more coordinated enforcement of workplace rights.

For businesses, this reinforces the importance of maintaining accurate payroll, employment and working-time records.

Whistleblowing and Sexual Harassment

From 6 April 2026, disclosures concerning sexual harassment can qualify for protection under whistleblowing law where the statutory requirements are met.

This means employers should ensure whistleblowing procedures are capable of handling allegations relating to sexual harassment appropriately.

Businesses should avoid treating whistleblowing simply as a fraud or financial-misconduct issue.

Protected disclosures can concern a much wider range of wrongdoing.

Employers should therefore have procedures explaining:

• How concerns can be raised.
• Who will investigate them.
• How confidentiality will be handled.
• How retaliation will be prevented.
• How investigations will be documented.

Disability and Reasonable Adjustments

Disability discrimination remains one of the most important areas of employment compliance.

The Equality Act 2010 imposes duties on employers concerning discrimination and reasonable adjustments.

Employers should consider whether disabled employees are being placed at a substantial disadvantage because of workplace practices, physical features or a lack of auxiliary aids.

Possible reasonable adjustments may include:

• Flexible working arrangements.
• Modified duties.
• Different working hours.
• Additional rest breaks.
• Ergonomic equipment.
• Assistive technology.
• Accessible communication.
• Adjustments to sickness-absence procedures.
• Changes to performance-management processes.
• Remote or hybrid working where appropriate.

Employers should remember that many disabilities are invisible or fluctuating.

A person does not need to display obvious physical signs of disability before their rights should be taken seriously.

Flexible Working

The statutory right to request flexible working is already available from the first day of employment.

Further changes are expected during 2027 under the Employment Rights Act reforms.

Under the forthcoming framework, where an employer refuses a flexible-working request, additional emphasis will be placed on explaining the permitted business reason and why the refusal is considered reasonable.

Businesses should therefore begin reviewing decision-making procedures now.

A refusal should not merely repeat a statutory phrase without considering the employee’s individual circumstances.

Flexible working can include:

• Different starting or finishing times.
• Reduced hours.
• Compressed hours.
• Homeworking.
• Hybrid working.
• Job sharing.
• Alternative shift patterns.

Where disability is involved, employers must also remember that a flexible-working request may overlap with the separate legal duty to consider reasonable adjustments.

Unfair Dismissal Reform

One of the most significant changes scheduled for 1 January 2027 concerns unfair dismissal.

The ordinary qualifying period for bringing an unfair dismissal claim is due to reduce from two years to six months.

The existing framework for claims where no qualifying period is required, including certain automatically unfair dismissal claims, remains separate.

Employers should therefore begin preparing before January 2027.

This is particularly relevant to probationary processes.

Businesses may wish to review:

• Probation periods.
• Performance reviews.
• Disciplinary procedures.
• Dismissal procedures.
• Manager training.
• Record keeping.

Poor documentation during an employee’s first months of employment may become increasingly significant once the shorter qualifying period applies.

Fire and Rehire

Further restrictions concerning dismissal and re-engagement, commonly known as fire and rehire, are also due to take effect from January 2027.

The reforms will make dismissal and re-engagement automatically unfair in many circumstances, although the legislation provides limited exceptions.

Employers considering major contractual changes should therefore approach dismissal and re-engagement with considerable caution.

Consultation, negotiation and alternative options should be explored carefully before employment is terminated.

Zero-Hours and Low-Hours Contracts

Zero-hours contracts have not been abolished.

Current government guidance published in August 2026 confirms that the new statutory measures concerning zero-hours and similar contracts are not yet in force.

However, reforms are expected during 2027.

These are intended to give qualifying workers greater rights concerning guaranteed hours, reasonable notice of shifts and compensation where shifts are cancelled, shortened or moved.

Businesses using casual labour should therefore begin examining their workforce arrangements.

This may include reviewing:

• Average hours actually worked.
• Shift-notification procedures.
• Cancellation practices.
• Employment status.
• Contract wording.
• Payroll systems.

Employers should avoid assuming that describing someone as a “casual worker” automatically removes statutory employment rights.

Sexual Harassment Prevention

Preventing sexual harassment continues to be an important compliance issue.

Employers should take proactive steps rather than waiting until an incident occurs.

Good practice may include:

• Clear anti-harassment policies.
• Staff training.
• Manager training.
• Reporting procedures.
• Proper investigations.
• Protection against retaliation.
• Reviewing risks involving customers or third parties.

Policies should be actively implemented rather than simply stored within an employee handbook.

Equality, Diversity and Inclusion

Employment law compliance increasingly overlaps with equality and workplace culture.

The Equality Act 2010 protects people against unlawful discrimination connected with protected characteristics.

Employers should therefore examine whether their recruitment, promotion, disciplinary, redundancy and workplace-management procedures could disadvantage particular groups.

Relevant considerations include:

• Disability.
• Race.
• Sex.
• Age.
• Religion or belief.
• Sexual orientation.
• Gender reassignment.
• Pregnancy and maternity.
• Marriage and civil partnership where applicable.

Equality compliance is not achieved simply by treating everybody identically.

Different circumstances may require different approaches, particularly where reasonable adjustments are involved.

Menopause in the Workplace

Menopause has also become an increasingly important employment issue.

From April 2026, employers can voluntarily publish menopause and gender pay-gap action plans.

The government timetable indicates that these action plans are expected to become mandatory during 2027 for employers with 250 or more workers.

Employers may therefore wish to begin considering workplace support before mandatory requirements take effect.

Adjustments could potentially involve temperature control, uniform requirements, access to breaks, flexible working or sickness procedures depending upon individual circumstances.

Artificial Intelligence in Employment Decisions

Another developing area concerns the use of artificial intelligence within employment.

AI systems may assist businesses with:

• Recruitment.
• CV screening.
• Performance monitoring.
• Productivity measurement.
• Shift allocation.
• Workforce planning.
• Disciplinary risk analysis.

However, automation does not remove an employer’s legal responsibilities.

An AI system could potentially reproduce discriminatory patterns contained within historical data or make decisions that disadvantage disabled employees or other protected groups.

Employers should therefore ensure that meaningful human oversight remains in place.

Businesses should be able to understand how significant employment decisions are being made and should not rely blindly on automated recommendations.

Employee Monitoring and Data Protection

Remote and hybrid working have also increased the use of employee-monitoring technologies.

Monitoring may include:

• Email monitoring.
• Internet activity.
• Location tracking.
• Productivity software.
• CCTV.
• Call monitoring.
• Biometric systems.

Employers should consider whether monitoring is necessary, proportionate and transparent.

Workers should generally understand what information is being collected and why.

Workplace monitoring therefore requires consideration of both employment law and data-protection obligations.

Mental Health at Work

Mental health remains another important area of employment practice.

Conditions such as depression, anxiety disorders, post-traumatic stress disorder and obsessive-compulsive disorder may potentially satisfy the statutory definition of disability depending upon their duration and effect.

Employers should therefore avoid assuming that mental health conditions are less significant than physical disabilities.

Reasonable adjustments might include:

• Flexible hours.
• Written rather than verbal instructions.
• Reduced exposure to particular workplace triggers.
• Temporary workload adjustments.
• Homeworking where appropriate.
• Additional breaks.
• Adjusted communication methods.

Individual assessment remains essential.

Keeping Employment Contracts and Policies Updated

One of the simplest compliance failures is allowing workplace documentation to become outdated.

Employers should periodically review:

• Employment contracts.
• Staff handbooks.
• Sickness policies.
• Equality policies.
• Disciplinary procedures.
• Grievance procedures.
• Whistleblowing policies.
• Flexible-working policies.
• Family-leave policies.
• Data-protection policies.
• Harassment procedures.

Legal reform can make previously accurate documentation obsolete.

Regular reviews can therefore help businesses identify problems before they develop into disputes.

Training Managers

Employment policies are only effective if managers understand them.

A manager may create significant legal risk by:

• Ignoring an adjustment request.
• Making inappropriate comments.
• Mishandling sickness absence.
• Refusing flexible working without proper consideration.
• Retaliating against a whistleblower.
• Conducting an inadequate disciplinary process.

Businesses should therefore regard management training as part of legal compliance rather than an optional administrative exercise.

Record Keeping and Evidence

Employment disputes frequently depend upon evidence.

Businesses should retain appropriate records of:

• Meetings.
• Adjustment requests.
• Grievances.
• Disciplinary decisions.
• Performance concerns.
• Absence.
• Flexible-working applications.
• Workplace investigations.
• Holiday entitlement.
• Pay calculations.

Contemporaneous written records can help demonstrate how and why a decision was made.

Poor record keeping can make an otherwise defensible decision much more difficult to justify.

Compliance Is Becoming More Proactive

A clear trend within employment law is the movement away from purely reactive compliance.

Employers increasingly need to identify problems before they result in formal complaints or litigation.

This means reviewing workplace practices, monitoring legislative developments, listening to employees and ensuring managers understand their responsibilities.

The Employment Rights Act 2025 reinforces this direction.

Some reforms are already part of current law, while others will significantly alter employment practices during 2027.

Businesses that begin preparing early will be better positioned to adapt their contracts, policies and procedures as further provisions come into force.

Employment law compliance should therefore be treated as an ongoing process rather than something examined only when a dispute arises.