Keeping Employment Contracts Compliant and In Line with Recent Changes

What Employers Need to Change After the Employment Rights Act

The changes being implemented as part of the Employment Rights Act 2025 are the largest overhaul of UK employment law in a generation. The Act achieved Royal Assent on 18 December 2025 and is being rolled out in phases through 2026 and into 2027. The first set of changes came into force on 6 April 2026, and further, more far-reaching provisions are due in 2027.

For employers, it is important to realise this is not a one-and-done task. The changes affect wide-ranging aspects, including employment contracts, staff handbooks, HR policies and manager training.

If you have not updated your contracts recently, they are likely out of date and will need reviewing more than once between now and the end of 2027.

In this article, our employment law team looks at what has already changed, what is coming next, and what employers should be reviewing in their employment contracts now.

The Employment Rights Act 2025 – A Brief Overview

The Act is not replacing UK employment law in one go, but it is amending the Employment Rights Act 1996, the Trade Union and Labour Relations (Consolidation) Act 1992, and a number of other core statutes and regulations. Much of the practical detail is being left to secondary regulations and updated statutory guidance. The result is a legal framework being rebuilt in stages rather than a single new rulebook.

The following are the main points to be aware of:

• 6 January 2026. Initial provisions relating to zero hours workers, shift notice and shift cancellation payments came into force.
• 18 February 2026. Trade union and industrial action provisions took effect, including the repeal of much of the Trade Union Act 2016.
• 6 April 2026. A major package of family leave, statutory sick pay, harassment and whistleblowing provisions took effect.
• January 2027. The next significant tranche is expected, including the reduction of the unfair dismissal qualifying period to six months, restrictions on fire and rehire, and further changes to non-disclosure agreements.

Further reforms are expected to follow through 2027 as the underpinning regulations are published.

What Are the Recent Changes Affecting Employment Contracts?

Since April 2026, several changes have affected what your employment contracts and handbooks should now say. Below, we cover the core areas employers should be aware of:

• Day one paternity and unpaid parental leave. As of 6 April 2026, paternity leave and unpaid parental leave became day one rights. The old qualifying period of employment has gone. Contracts, offer letters and handbooks that still refer to service-based qualifying periods for these leave types are out of date.
• Statutory sick pay reform. The Lower Earnings Limit and the three-day waiting period have been removed. SSP is now payable from day one of a period of incapacity for work, and lower earners are within scope. Sick pay clauses that reference the old position need updating.
• Bereaved Partners’ Paternity Leave. A new statutory right to up to 52 weeks of leave for bereaved fathers and partners was introduced from April 2026, where the mother or primary adopter dies within the first year of the child’s life. This is a new clause that should be reflected in your family leave policy.
• Sexual harassment: a higher bar. The duty on employers to take reasonable steps to prevent sexual harassment has been strengthened. Employers must now take “all reasonable steps” to prevent harassment of their staff, and there is a new duty to prevent harassment by third parties, including customers and clients. Contract clauses and staff handbooks dealing with harassment, dignity at work and reporting procedures should be reviewed.
• Whistleblowing protections. Protections have been strengthened for workers who disclose information about sexual harassment. Whistleblowing policies referred to in your contracts should reflect the new position.
• Collective redundancy. The maximum protective award for a failure to consult properly has been doubled from 90 to 180 days’ pay. This does not directly change contractual clauses, but it significantly raises the stakes for any employer contemplating collective redundancies.

Our employment law team provides specialist employment contract drafting services and can audit your existing contracts and help you update them. Where the changes are significant, we will advise on the process for putting new terms in place, including consultation, consent and any risks of constructive dismissal claims.

Employment Law Changes Coming into Force in 2027

The next set of employment law updates is due in January 2027 and will bring some of the most consequential changes for employers. Employers would do well to start preparing for these now rather than later. Here are some of the most significant that businesses should be aware of:

• Unfair dismissal after six months. The current two-year qualifying period for bringing an ordinary unfair dismissal claim is being reduced to six months. The change is expected to apply to existing employees on the commencement date, which means anyone hired from around the end of June 2026 onwards will have unfair dismissal protection from the moment the change takes effect. The practical consequence for a business is that probationary periods, induction, performance management and dismissal processes need to be watertight much earlier in the employment relationship. A probationary period clause that used to be a formality now matters more than ever. The dismissal process during the probationary period is even more important.
• Fire and rehire restrictions. New restrictions on the practice of terminating employment and offering re-engagement on new terms are due in January 2027. Contract variation clauses will need to be redrafted to reflect the tighter framework. Employers relying on unilateral change clauses in existing contracts should be particularly careful.
• Further NDA restrictions. The Act will impose further restrictions on the use of non-disclosure agreements, particularly those seeking to restrict disclosure of harassment or discrimination. Contractual confidentiality clauses, settlement agreements, and severance packages will all need to be checked against the new rules once the regulations are finalised.
• Zero hours contracts and guaranteed hours. Workers on zero hours contracts, or contracts providing very few guaranteed hours, will gain the right to be offered a contract reflecting the hours they have actually been working. Zero hours contracts are not being banned, but the freedom employers currently have, with the ability to keep workers on unpredictable arrangements indefinitely, is being restricted. If your business relies on contracts for casual staff, for example, in retail, hospitality, and other zero hours sectors, these should be reviewed to ensure they will meet the new requirements.

What Employers Need to Do Now

If your business has staff who have employment contracts drafted before December 2025, here are a few practical steps you should be considering:

1. Review your standard contract templates. The version you are using for new hires may be out of date. Look for clauses regarding sick pay, family leave, and harassment.
2. Review your handbook. Policies on harassment, whistleblowing, family leave, and sick pay all need to reflect the April 2026 position. The duty to take “all reasonable steps” to prevent sexual harassment has a broader operational impact than most employers appreciate.
3. Rewrite your probationary period clause. With unfair dismissal protection reducing to six months from January 2027, the probationary period will become the last window in which employers can dismiss without full unfair dismissal exposure. The clause, the length, the process for reviewing performance and the process for confirming or extending probation all matter.
4. Audit your contract variation clauses. Fire and rehire restrictions arriving in January 2027, will affect any employer who wants to change the terms of employment. Broadly drafted variation clauses that were never scrutinised in practice may become the subject of dispute.
5. Plan for the January 2027 changes now. The regulations that will underpin the January 2027 tranche are still being finalised. Employers who wait for the final position before making changes may find themselves rushing to redraft contracts under time pressure.

For details on what our employment law team includes in the contracts we draft for businesses, see our employment contract drafting service page.

Employment Contract Drafting Solicitors

At Rose & Rose, our employment law team advises businesses on drafting, reviewing and updating employment contracts, staff handbooks and HR policies. We can carry out a contract audit against the current position under the Employment Rights Act 2025, flag the gaps, and produce updated templates ready for use.

We also advise on the practical operational changes that sit alongside contract updates, including probationary period processes, harassment prevention steps and the treatment of contract variations.

You can read more about our services on our employment contract drafting page and our employment law for businesses page.

For related information, read our recent article, ‘Started a New Business This Year? Here Are the Main Documents You Need’.

Speak To Our Employment Team

If you need employment contracts drafted, reviewed or updated, please contact our team through the contact form or by emailing info@roselegal.co.uk to discuss the best way forward for you, and we will provide you with further and specific advice tailored to your circumstances.

We work with businesses across Kingston, Surrey and London, and will produce contracts that suit the way your business operates.