Employment Rights Act 2025 changes taking effect in April 2026

• Doubling of the collective redundancy protective award
• Providing day one rights to paternity leave and unpaid parental leave
• Extending whistleblower protection to cover disclosures about sexual harassment
• Making statutory sick pay (SSP) payable from an employee's first day of absence and removing the lower earnings limit for eligibility
• Simplifying trade union recognition processes

The Fair Work Agency, which will have responsibility for enforcement of various employment rights, is expected to be established from 7 April 2026.

In addition, the government is encouraging large employers to produce action plans on gender equality and supporting employees through the menopause on a voluntary basis from April 2026 (ahead of the requirement to produce such action plans coming into force in 2027).

Collective redundancy protective award

Where an employer fails to comply with collective redundancy consultation requirements, representatives of the affected employees can bring a claim for a protective award. From 6 April 2026, the maximum amount of the award will increase from 90 to 180 days' pay per affected employee. This significantly increases the financial risk for employers of getting their collective redundancy consultations wrong. 

Changes to the threshold at which collective redundancy consultation is triggered are expected to be introduced in 2027, and the government is currently consulting on how the additional threshold should be set. See our article here for further details of the consultation.

Day one rights to paternity leave and unpaid parental leave

The ERA 2025 provisions that make paternity leave and unpaid parental leave "day one" rights are due to come into force on 6 April 2026. At the same time, the Bereaved Partner's Paternity Leave Regulations 2026 will extend paternity leave entitlement for bereaved partners to up to 52 weeks, where the child's mother/primary adopter dies within a year of the child's birth/adoption placement.

We covered these changes in detail last month. As explained in that article, employers will need to update their family policies to reflect the changes.

Whistleblower protection for disclosures about sexual harassment

To qualify for whistleblower protection, a worker who makes a disclosure must reasonably believe that they are acting in the public interest and that the disclosure tends to show one of a number of specified types of wrongdoing (e.g. criminal offence, danger to health and safety, etc). From 6 April 2026, disclosures about sexual harassment will be added to the list of wrongdoings that count as protected disclosures. See our ERA 2025 tracker for further details.

Employers should ensure that they update their whistleblowing policies to cover sexual harassment.

Changes to SSP

Under current rules, SSP is only payable from an employee's fourth day of sickness absence, and employees are only eligible if they earn at least the lower earnings limit (£125 per week). From 6 April 2026, SSP will become payable from the first day of absence, and the lower earnings limit for eligibility will be removed. SSP will be payable at the lower of the normal rate or 80% of the employee's average weekly earnings.

Employers should update their sickness policies and contracts as needed to reflect these changes.

For employers who provide company sick pay, which is usually payable from the first day of absence in any event, the changes to SSP are likely to have little practical impact. However, employers who provide SSP only may experience an increase in short-term absence rates when these changes take effect, as employees are more likely to take time off for minor illnesses if they know they will still receive some pay. These employers may wish to revisit their absence management policies and ensure that line managers are trained to handle short-term sickness absence appropriately.

Simplifying trade union recognition

The ERA 2025 will remove or reduce certain percentage thresholds that currently limit the circumstances in which the Central Arbitration Committee (CAC) can accept an application for statutory trade union recognition or declare that a union is recognised following a statutory recognition ballot. It will also strengthen the provisions designed to prevent unfair practices during the trade union recognition process. See our ERA 2025 tracker for details.

Although the government's timeline for implementing the ERA 2025 states that these changes will take effect on 6 April 2026, the consultation on access and unfair practices during the recognition process only closes on 1 April 2026, and further consultation is expected on the changes to the percentage threshold for the CAC to accept an application for recognition. Meeting the 6 April 2026 timeframe to bring these changes into effect is therefore likely to be challenging.

Fair Work Agency

The Fair Work Agency (FWA), which will be responsible for enforcing various employment rights, is expected to be established on 7 April 2026 - although it may take longer for it to be fully up and running. It will take over the functions of several existing enforcement bodies, covering minimum wage, statutory sick pay, and modern slavery. It will also be given responsibility for enforcing rights to holiday pay. 

Its wide-ranging powers will include the power to: impose notices of underpayment where employers have failed to pay certain statutory payments; impose financial penalties; apply for court orders to enforce compliance with notices of underpayment; and bring employment tribunal proceedings on workers' behalf. See our ERA 2025 tracker for details.

Gender equality action plans

As noted above, the government is encouraging employers who are in scope of gender pay gap reporting (i.e. those with at least 250 employees) to produce action plans on gender equality and supporting employees through the menopause on a voluntary basis from April 2026 ahead of the ERA 2025 requirement to produce such action plans coming into force in 2027.

In order to support this, on 4 March 2026 the government published guidance for employers on producing an action plan, as well as guidance on a large variety of suggested actions that employers may wish to include in their action plans.

What does this mean for employers?

As highlighted above, employers will need to update their family, whistleblowing, and sickness policies to reflect the upcoming changes. Large employers may also wish to review the new guidance on action plans and consider producing an action plan this year on a voluntary basis. Further significant changes under the ERA 2025 are due to take effect in October 2026, on 1 January 2027, and during 2027. We will continue to keep clients updated on ERA 2025 developments. In the meantime, clients should refer to our ERA 2025 tracker or speak to their usual DAC Beachcroft contact for further information.