Employment Rights Act

The Employment Rights Act 1996 (ERA 1996) received Royal Assent on May 22, 1996, and came into force on August 22, 1996 it consolidated a wide range of individual employment rights into a single Act of Parliament to make the law more accessible and easier to understand for both employers and employees.

The Employment Rights Act 2025 (ERA 2025), received Royal Assent in December 2025, the 1996 Act remains the foundational act and many aspects still apply but the new act will phase in significant changes over the following years, such like day-one paternity rights and new rules for zero-hours contracts, throughout 2026 and 2027, building upon the existing framework.

The original ERA 1996 covered areas such as unfair dismissal, parental leave, time off for public duties, and protection in the event of employer insolvency, bringing pieces of legislation together under one Act that included:

• The Contracts of Employment Act 1963, which established the right to a written statement of employment particulars and minimum notice periods for dismissal.
• The Redundancy Payments Act 1965, which introduced the right to statutory redundancy pay for qualifying employees.
• The Employment Protection Act 1975, which brought in a number of new rights, many of which were later consolidated.
• The Employment Protection (Consolidation) Act 1978, which was the main precursor to the 1996 Act and itself had been heavily amended over the years.
• The Employment Act 1980.
• The Wages Act 1986, which dealt with the protection of wages and unlawful deductions.
• The Trade Union and Labour Relations (Consolidation) Act 1992(certain sections).
• The Trade Union Reform and Employment Rights Act 1993 (certain sections).

The ERA 2025 is a central component of the Labour Government’s Plan to 'Make Work Pay'. It modernises employment law to support economic growth, raise wages, and reduce insecure work. Developed in close partnership with businesses and trade unions, the Act updates employment protections for the modern labour market and extends rights to workers.

The Act immediately repealed the Strikes (Minimum Service Levels) Act 2023, which allowed the government to mandate minimum service levels during strikes in key sectors. It is also expected to repeal or amended the Trade Union Act 2016 with any restrictions on industrial action and picketing from this act will be lifted, changing ballot requirements (unions to ballot every 10 years to maintain a political fund removed), reducing the notice period for industrial action, extending the validity of ballot mandates, simplifying notice information, and removing the need for a picketing supervisor. Over time it will also impact the Employment Rights Act 1996 (covering unfair dismissal and sick pay), the Equality Act 2010 (strengthening protections against harassment), the Employment Agencies Act 1973 (regulating umbrella companies), and the Seafarers' Wages Act 2023.

In summary the new ERA 2025 strengthens job security by addressing one-sided flexibility in the labour market. It introduces new rights to guaranteed hours, reasonable notice of work, and compensation for short-notice shift cancellations, effectively ending exploitative zero-hours contract practices and extending equivalent protections to agency workers. It also tackles “fire and rehire” and “fire and replace” practices by making dismissals for refusing changes to core contractual terms automatically unfair, except where employers face severe financial distress and have no viable alternative. The qualifying period for unfair dismissal claims is reduced from two years to six months, future changes can only be made through primary legislation, and the cap on compensatory awards is removed.

Collective redundancy rights are strengthened by expanding the circumstances in which employers must consult workers and notify the Government, including cases where a new organisation-wide redundancy threshold is met. Where employers fail to meet consultation requirements, the maximum protective award is doubled from 90 to 180 days’ pay. The Act also closes a maritime loophole to ensure operators providing regular services to British ports cannot avoid redundancy notification obligations.

The Act reinforces fair pay by strengthening Statutory Sick Pay through removal of the Lower Earnings Limit and waiting period. It establishes a School Support Staff Negotiating Body in England, introduces Fair Pay Agreements in adult social care across Great Britain, strengthens tipping transparency through mandatory worker consultation, reintroduces the two-tier code for outsourced public contracts, and provides for a mandatory Seafarers’ Charter alongside powers to maintain compliance with international maritime law.

Family-friendly rights are expanded by making Paternity Leave and Unpaid Parental Leave available from day one, enabling paternity leave to be taken after shared parental leave, introducing a new right to unpaid bereavement leave including for pregnancy loss, strengthening protections against dismissal for pregnant women and new mothers, and reinforcing the day-one right to request flexible working with clearer employer obligations.

The Act also strengthens protections against sexual harassment, improves whistle blowing safeguards, requires large employers to publish gender equality action plans, voids NDAs that silence workers on harassment or discrimination, modernises trade union law, and significantly improves enforcement through the creation of the Fair Work Agency. Implementation will be phased over two years, with key measures taking effect from Royal Assent and April 2026, in line with the Government’s published Roadmap.

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