Key takeaways
Day-one rights for family leave
Employees gain immediate access to paternity and unpaid parental leave.
Significant overhaul of statutory sick pay
SSP becomes payable from day one with new calculation rules.
Stronger enforcement and higher penalties
Non compliance risks rise with doubled penalties and a new enforcement body.
Key provisions of the Employment Rights Act 2025 are expected to take effect from 6 April 2026, and employers should be preparing now.
The most important changes coming into force include:
Day one family leave: employees will have day-one rights to paternity leave and unpaid parental leave.
Statutory sick pay reform: employees will be entitled to statutory sick pay from day one of absence, the lower earnings limit is removed and there are changes to the calculation method in respect of statutory sick pay for low earners.
Protective award doubles: the maximum penalty for non-compliance with collective consultation obligations will be doubled to 180 days’ gross pay.
Whistleblowing: sexual harassment will amount to a protected disclosure for the purposes of whistleblower protection.
Trade unions: simplification of trade union recognition process.
Equality action plans (voluntary basis): employers with 250+ employees will be encourage on a voluntary basis to develop and publish equality action plans.
We explain these changes, some of which remain subject to further regulations being passed, in more detail below.
Day-one right to paternity and unpaid, parental leave
From 6 April 2026, new family-related leave entitlement under the Employment Rights Act 2025 will take effect. Here’s what employers need to know about the changes:
Parental leave (section 15): Employees currently require one year’s service to qualify for unpaid parental leave. From 6 April, entitlement to unpaid parental leave will become a day-one right for qualifying parents.
Paternity leave (section 16 and 17): Employees currently require 26 weeks’ service to qualify for paternity leave. From 6 April, employees will be entitled to paternity leave from day-one. Paternity pay will still require 26 week’s service, meaning there will be a day-one entitlement to paternity leave but not to paternity pay (mirroring the maternity pay situation). The Act will also remove the restriction on taking paternity leave or receiving statutory paternity pay following a period of shared parental leave or shared parental pay. Please note that under transitional provisions, the paternity leave provisions only apply in relation to:
children born on or after 6 April 2026;
children born prior to 6 April 2026 but whose expected week of childbirth (EWC) starts on or after 5 April 2026;
children placed for adoption on or after 6 April 2026 (or who enter Great Britain on or after that date in an overseas adoption case); and
children whose primary carer dies on or after that date (regardless of the date of birth, EWC or placement).
Statutory sick pay reforms
From 6 April 2026, reforms to Statutory Sick Pay (SSP) are expected to be brought into force. These require further substantive regulations, which have not yet been published. Employers need to be aware of the following changes:
Day-one entitlement (section 10): The Employment Rights Act 2025 will remove the current 3-day waiting period for entitlement to SSP, meaning that SSP will be payable from day one of absence. As the cost of SSP is no longer recoverable from the government, employers that do not currently offer staff sick pay from the first day of absence will face additional financial burdens. When handling phased returns to work, employers need to be aware that employees will be entitled to SSP on days they do not work. For example, if an employee who normally works 5-days a week returns from sick leave on an initial 3-day week, the employee will be entitled to SSP for the two remaining days.
Removal of lower earnings limit (section 11): The Employment Rights Act 2025 will remove the requirement to earn at least the lower earnings limit (which will be £129 per week from 6 April 2026) to be entitled to SSP. This will mainly help those working only a small number of hours each week, apprentices and young workers who are entitled to lower levels of national minimum wage and lower-paid casual workers.
New calculation method (section 11): The Employment Rights Act 2025 introduces a new calculation method for low earners. This involves a taper to the fixed SSP rate (which will be £123.25 per week from 6 April 2026) for those earning below the lower earnings limit, so that they are entitled to whichever is the lower of 80% of their average weekly earnings or the current SSP flat rate.
Collective redundancy reform – double financial recovery
From 6 April 2026, under section 30 of the Employment Rights Act 2025, the government is expected to double the maximum penalty for non-compliance with collective consultation obligations from 90 to 180 days’ gross pay per affected worker. Further regulations must be passed to bring this into force.
This change will substantially increase the financial consequences for employers who fail to comply with collective consultation requirements. However, as many respondents to the consultation observed, employer non-compliance is often a result of misunderstanding the complex collective consultation framework, as opposed to a deliberate intention to breach employee rights. To address this, the government has committed to producing guidance for employers on compliance with collective consultation obligations 'in due course'.
Whistleblowing
It is expected that, from 6 April 2026, section 23 of the Employment Rights Act 2025 will provide that reporting sexual harassment that 'has occurred, is occurring or is likely to occur' will amount to a protected disclosure for the purposes of whistleblower protection. However, it will still be necessary for the worker to show that they believed their disclosure to be in the public interest.
Sexual harassment complaints are, in many cases, already capable of amounting to qualifying disclosures, since sexual harassment can constitute a breach of a legal obligation (a form of wrongdoing within the scope of whistleblower protection). However, explicit legislative recognition will remove uncertainty and help raise awareness among victims and potential whistleblowers.
Other consequences of this change may include:
Enabling alternative reporting routes: Those who feel unable to raise concerns with their employer may instead report them to the Equality and Human Rights Commission or their MP as a prescribed person, or via a dedicated whistleblowing hotline if one is available in their workplace.
Creating the potential for interim relief: Employees dismissed for making a protected disclosure about sexual harassment could seek interim relief pending the outcome of their claim.
Limiting the effectiveness of confidentiality provisions: As section 43J of the Employment Rights Act 1996 voids any contractual provision insofar as it purports to prevent a protected disclosure, employers will face greater restrictions on using confidentiality provisions to prevent allegations of sexual harassment from being raised. The Act also contains separate provisions which further restrict the use of confidentiality clauses and non-disclosure agreements, but it is not yet know when these will be brought into force.
Changing internal investigation processes: Sexual harassment complaints will need to be dealt with in a similar way to other whistleblowing complaints. Employers should ensure there is no conflict between their whistleblowing and anti-sexual harassment policies.
Simplification of trade union recognition
In April 2026, it is expected that certain changes will be implemented to simplify the trade union recognition process. Section 60 and Schedule 6 of the Employment Rights Act 2025 (which require commencement regulations to come into force) make changes to the statutory procedure for the recognition and derecognition of trade unions for the purposes of collective bargaining on behalf of a particular group of workers (a bargaining unit).
Currently, for a trade union's application to the Central Arbitration Committee (CAC) to be accepted, it must meet a number of admissibility requirements, one of which is that the CAC must be satisfied that at least 10% of the workers in the relevant bargaining unit are members of the union.
The Employment Rights Act 2025 allows regulations (which have not yet been published) to fix the support thresholds anywhere between 2% and 10%. The government’s implementation timeline currently says it is 'simplifying trade union recognition process' from 6 April 2026. It is not yet entirely clear whether this means it merely intends to give itself the power to publish the necessary regulations, or whether it plans to also publish the substantive regulations to fix the support thresholds and bring these into force on 6 April 2026.
Creation of a single enforcement body: Fair Work Agency
From 7 April 2026, the Employment Rights Act 2025 will provide for the creation of a new single enforcement body – the Fair Work Agency – which is expected to have strong powers to:
inspect workplaces
undertake targeted and proactive enforcement work
bring civil proceedings and
act against worker exploitation.
The Fair Work Agency will be responsible for enforcing worker rights such as holiday pay, national minimum wage, statutory sick pay, the employment tribunal penalty scheme, labour exploitation and modern slavery.
This Fair Work Agency will be 'a stronger, recognisable single organisation that people know where to go for help – with better support for employers who want to comply with the law and tough action on the minority who deliberately flout it'.
The Fair Work Agency will have various legal powers where employers are in breach, including powers to:
issue notices of underpayment (including for national minimum wage, statutory sick pay and holiday pay) going back up to 6 years but uprated to current rates;
issue penalty notices of 200% of the underpayment (minimum £100, maximum £20,000 per underpaid worker)
bring employment tribunal proceedings/provide legal assistance to workers, and recover costs from the losing side and
recover its enforcement costs from the defaulting employer (regulations will specify how these enforcement costs will be assessed).
As such, employers should ensure they are fully compliant with laws around holiday pay, national minimum wage, sick pay etc.
Equality action plans (on a voluntary basis)
The Employment Rights Act 2025 contains provisions, in section 33, which allow for future regulations requiring large (250+ staff) employers to publish equality action plans no more than once a year. The government has said it intends to introduce these on a voluntary basis from 6 April 2026 and then on a mandatory basis from Spring 2027.
An equality action plan must show the steps that the employer is taking in relation to their employees with regard to:
gender equality, including addressing the gender pay gap
supporting employees going through the menopause and
menstrual problems/disorders.
Regulations may also set out certain requirements in respect of equality action plans, such as their contents, frequency of publication and any requirements for senior approvals.
