Employment Rights Act 2025: It's Not Coming, It's Here

Start with whoever you hired this month

You took someone on recently. Maybe last week, maybe back in May. The references were fine, the trial shift went well, and you've got a good long runway to see whether it works out.

Except you haven't. Not any more.

The Employment Rights Act 2025 became law in December. Most of the noise around it has pointed at dates in 2027 — the sort of thing a busy owner files under "deal with it later." But the maths has quietly caught up. From January 2027, the qualifying period for unfair dismissal drops from two years to six months. Anyone you hire from around now will clear that bar before the rule even arrives. The cushion you thought you had on this summer's hires has already gone.

That's the thing about this Act. It isn't coming. Parts of it are already here — and the parts that aren't are closer than the headlines suggest.

What the Employment Rights Act already changed in April

A handful of changes landed on 6 April this year, and if you run a small team in Horsham you're probably already living with them, whether or not anyone sat you down and explained it.

Statutory sick pay now starts from the first day of illness, and the old lower earnings limit has gone — so part-timers who never qualified before now do. If someone's off sick on day one, you're paying from day one.

The penalty for getting collective redundancy consultation wrong has doubled, from 90 days' pay to 180. That mostly bites at bigger headcounts, but the direction of travel is plain enough: the cost of cutting corners on process has gone up, not down.

And paternity leave and unpaid parental leave are now day-one rights — no qualifying service. Someone can start on Monday and book parental leave that week.

None of this is dramatic on its own. Added together, it carries one message: process matters from the first day someone joins, not the first year.

The bit the headlines got wrong

If you read about this Act back in 2024 — including, I'll own it, in an earlier piece on this very blog — you'll have seen the phrase "day-one unfair dismissal rights." That was the original plan. It's not what landed.

What landed is a six-month qualifying period, in from January 2027, with the statutory caps on unfair dismissal compensation removed at the same time. There's still a consultation running on what a fair "light-touch" dismissal process looks like inside those early months, so some of the detail may move again. The fire-and-rehire restrictions, first pencilled in for October 2026, have already slipped to January 2027.

So the picture keeps shifting. But the core fact for a small employer holds still: the window in which you can part company with a new hire on a light footing is shrinking from two years to six months, and it's doing so next January.

What to actually do before January

Here's where I'd put the attention — and it isn't on a folder of policies.

The two-year window let a lot of owners be slow. Most of my work now is as a fractional HR director for SME and PE-backed firms, and I've sat with people across West Sussex who kept a not-quite-right hire for eighteen months — not out of kindness, but because nothing was forcing the conversation. "We've got time" was doing a lot of work. From January, that sentence stops being true at six months.

So the real preparation lives in the first few weeks of someone's employment, not the paperwork. Are your managers having honest probation conversations, or ticking a box at month three and hoping? Is there a written, dated note when someone isn't meeting the mark — or just a vague sense that it's not quite working? When you do let someone go early, can you point to a fair process, or only to a gut feel?

Get that right and the six-month rule barely touches you. Get it wrong and you'll find out, in 2027, that the hiring decisions you're making now carry a cost they didn't used to.

The contract point is worth a line too. If you've been meaning to tidy up outdated terms — old bonus schemes, hours, a benefit nobody uses — the fire-and-rehire restrictions from January make unilateral changes much harder. Far easier to fix those while you still can than to wrestle with them afterwards.

The honest version

This Act isn't the threat it's sometimes painted as. For a business that already manages people decently and keeps a half-sensible paper trail, most of it just writes down what you were doing anyway. The ones who'll feel it are the businesses that have been leaning on time and vagueness to do the work good management should — and that was never solid ground to begin with.

So the honest position is both at once: less to fear than the headlines suggest, and more to tidy up than "deal with it in 2027" allows.

If you've got people joining this summer and you're not sure your probation process would survive being looked at properly, that's a half-hour conversation, not a project. I'm based in Horsham — send me an email or a WhatsApp and we can talk it through before January does the deciding for you.

General guidance, not legal advice — the implementation dates and detail are still moving, so check the current position before you act on anything specific.

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