The Employment Rights Bill completed its progress through Parliament yesterday when the Lords accepted the final point of contention about removing the cap for unfair dismissal compensation. We expect that Royal Assent will follow tomorrow with the Bill finally becoming the Employment Rights Act 2025. Although this is major progress for the government, most of the changes outlined in the Bill will need secondary legislation to flesh out the details and confirm a date for implementation. 

What changes are imminent?

On Royal Assent:

The Bill repeals the Strikes (Minimum Service Levels) Act 2023 as soon as it receives Royal Assent, so the changes introduced by the previous government setting minimum staffing levels during strikes in key sectors like health, education and transport will be removed immediately. Two months later, the majority of the Trade Union Act 2016 will be repealed, reversing changes made by the previous government to restrict strike action.

In April 2026:

Based on the Roadmap published by the government in July (see our summary here), we do expect to see some changes in April 2026, subject to debate in parliament over the secondary legislation:

1. Protective award: The maximum protective award for a failure to inform and consult on collective redundancies (currently triggered when an employer proposes to dismiss 20 or more employees as redundant at one establishment within a 90-day period) will double from 90 to 180 days.
2. Statutory Sick Pay: The Bill removes the three-day waiting period to receive statutory sick pay (SSP) and also removes the lower earnings limit for entitlement.
3. Day 1 Paternity and Parental Leave: The right to take parental leave and paternity leave will be available to eligible employees from their first day of employment, and there will no longer be a requirement to take paternity leave before shared parental leave.
4. Fair Work Agency: The FWA will be established as a consolidation of other bodies and it will have the power to enforce various rights such as holiday pay, sick pay and the minimum wage. The FWA will also be able to provide legal assistance and bring employment tribunal proceedings on behalf of workers.
5. Trade union recognition: The Bill simplifies the process for union recognition, both in the initial application stage and at the ballot stage.
6. Sexual Harassment protected disclosures: It will be a protected disclosure for a worker to report that sexual harassment has occurred, is occurring or is likely to occur.

We also expect to see electronic balloting for industrial action introduced in April 2026. 

When will the changes to unfair dismissal take effect?

Much of the debate between the House of Commons and the Lords has focused on the changes to the unfair dismissal regime. We now know that:

1. The qualifying period for “ordinary” unfair dismissal claims will be reduced from two years to six months; and
2. The cap on the unfair dismissal award will be removed (it is currently the lower of 52 weeks’ gross actual pay at the time of dismissal or £118,223). 

The government has said that the change in qualifying period will take effect on 1 January 2027. No information has been provided about when the removal of the compensation cap will take effect, although it seems likely that it will also be on 1 January 2027. 

When do we expect other significant changes?

The Roadmap sets out changes for October 2026, including changes to the law on fire and rehire (automatic unfair dismissal unless a very narrow exception exists) and extending the duty to prevent sexual harassment to mean employers must take “all reasonable steps”. The new rules on zero hours contracts are currently scheduled for 2027.

As the Bill has been passed so much later than predicted, we will need to wait to see if the above changes stick to the Roadmap timeline, or if we can expect some slippage in final implementation too.