In this article, Sophie Evans, solicitor in Employment & Business Immigration at Capital Law, guides us through important reforms to the UK’s Employment Rights Act. This blog is essential reading for candidates interested in this area!

Introduction

This article has been written to help prospective candidates understand some of the employment law reforms that are set to shape new workers’ rights, useful for those applying to firms with employment law practices. This article briefly outlines four key reforms, and it considers the practical impact of these changes on both employees and employers. For completeness, it should be noted that several additional reforms are also planned, and helpful links are noted at the end to provide guidance on some of these.

Unfair dismissal

This is not quite the “day one” right that had been anticipated, although the qualifying period for bringing an unfair dismissal claim will be reduced from two years’ continuous service to six months. It is important to note that this reform will apply only to dismissals occurring on or after January 2027. Where a claimant is subsequently successful, they will be entitled to an uncapped statutory compensatory award, replacing the current cap, which is limited to the lower of 52 weeks’ pay or £118,223. These reforms are likely to open the floodgates to unfair dismissal claims and increase the compensation available to employees who successfully enforce their statutory rights.

As a result, we expect claimants to bring unfair dismissal claims at a much earlier stage and, in some cases, to recover substantially higher compensation, particularly where earnings or future losses exceed the former statutory cap. An increase in litigants in person is also likely. On the contrary, respondents will face increased exposure to unfair dismissal claims within the first year of employment and a materially higher financial risk arising from uncapped compensatory awards.

Flexible working

Flexible working will become a “day one” right, there will be no qualifying period. To refuse a request, employers will need to rely on an existing statutory ground for refusal, and the refusal must be reasonable in the circumstances.

Employees will have enhanced protection from the outset of employment and stronger grounds to challenge refusals that may be technically justified but unreasonable in practice. In turn, employers will need to exercise discretion carefully and provide clearer, evidence‑based reasons for refusing requests. It will be paramount to ensure that decisions are well documented and applied consistently, with greater input from human resources than ever before.

Greater family-based rights

Following on from flexible working, parental leave, paternity leave and bereavement leave will be “day one” rights. As will bereaved partner’s paternity, where a child’s mother or primary caregiver dies. We are also due to see further consultation in the coming months.

As employees will be entitled to this leave from the start of employment, they will benefit from stronger protection against dismissal when returning from maternity or other caring‑related leave. This will help support families during particularly vulnerable periods. To comply with these changes, employers will need to ensure they meet the expanded day‑one leave entitlements and exercise greater caution when managing dismissals involving returning parents or carers.

Harassment

Employers are currently under a duty to take only “reasonable steps” to prevent harassment. Under the new framework, this duty will be strengthened so that employers must take “all reasonable steps”, including in relation to harassment by third parties. This represents a significant expansion of the existing obligation. Further detail on what will constitute “all reasonable steps” is expected in 2027.

The use of non‑disclosure and settlement agreements will also require much greater caution. Any attempt to prevent the disclosure of harassment or discrimination will render an agreement void.

Employees will benefit from stronger preventative duties on employers and enhanced protection when reporting harassment. However, employers will face increased responsibility and a higher compliance burden. Where policies, training, or reporting mechanisms are inadequate, legal risk will rise significantly, making robust procedures and legal support essential.

Conclusion

This is a particularly dynamic moment in employment law. Significant reforms are strengthening employee rights across a range of areas, however, the impact on respondent employers is likely to be substantial. Legal professionals are therefore gearing up for an increase in advisory and policy-driven work, and bracing for a rise in claims, as employees become more informed and increasingly confident in exercising their statutory rights.

Further information

For further insight into the employment law reforms, Capital Law discusses some of the additional changes not covered in this article here: https://www.capitallaw.co.uk/news/employment-rights-act-2025-changes-taking-effect-in-april-2026-that-employers-need-to-know/

Additionally, ACAS offers detailed guidance on proposed further reforms, including statutory sick pay rights, zero hour contracts and gender pay gap reporting, available here: https://www.acas.org.uk/employment-rights-act-2025  

The opinions in this blog are intended for general information purposes only and should not be used as a substitute for professional advice.