The Employment Rights Act 2025 is UK legislation that received Royal Assent on 18 December 2025 and is being phased in through 2026 and 2027. It strengthens workers' rights, including day-one paternity and parental leave, longer tribunal time limits and a six-month qualifying period for unfair dismissal protection.
What it means for employers
The Act is the biggest change to UK employment law in a generation, and it is arriving in stages rather than all at once. Some measures, such as paternity leave and unpaid parental leave becoming day-one rights, took effect in April 2026. The time limit for most employment tribunal claims rose from three months to six months on 1 October 2026.
From 1 January 2027, employees in England, Scotland and Wales gain protection against ordinary unfair dismissal after six months' service instead of two years, and the cap on unfair dismissal compensation is removed. Further measures, including fire and rehire restrictions and bereavement leave, are planned for later in 2027.
How it affects SMEs and scale-ups
Fast-growing businesses feel the changes most, because they hire often and rely on informal processes. Recruitment, probation reviews, performance management and documentation all need to be robust well before the six-month point. Contracts, policies and manager training should be reviewed against the government's implementation timetable, which is still being updated as regulations are published.
Frequently asked questions
When does the six-month unfair dismissal rule start?
The six-month qualifying period for ordinary unfair dismissal, and the removal of the compensation cap, are due to take effect on 1 January 2027. Dismissals with an effective date of termination before then remain under the two-year rule. Day-one protections against discrimination and automatically unfair dismissal are unchanged.
Does the Act apply in Northern Ireland?
The unfair dismissal changes apply in England, Scotland and Wales. Employment law in Northern Ireland is largely devolved, so employers there should check the separate Northern Ireland position before changing policies or contracts.
Last updated: 6 November 2026