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Employment Rights Act 2025: what the new dismissal rules mean for workers — Articles

The Employment Rights Act 2025 is the most significant overhaul of employment law since the Employment Rights Act 1996. Its most headline-grabbing change is the removal of the two-year qualifying period for unfair dismissal — from 6 April 2026, all employees have the right not to be unfairly dismissed from their first day of work. This article explains what that means in practice, and what else changed.

Day-one unfair dismissal: what it means

Previously, an employee dismissed after two weeks had no unfair dismissal rights. Now, an employee dismissed on their second day can bring a claim. The ACAS Code of Practice on Disciplinary and Dismissal Procedures applies from day one. Employers must have a valid reason for dismissal — one of the five statutory fair reasons: capability, conduct, redundancy, statutory illegality, or some other substantial reason — and must follow a fair procedure. Employment Tribunal claims must begin with ACAS Early Conciliation within three months of the effective date of termination. See the unfair dismissal guide for the full step-by-step.

The new statutory probation procedure

Recognising that employer risk is highest in the early months, the Act creates a modified procedure for the first nine months of employment — a "statutory probation period". During this window, the employer still needs a fair reason to dismiss but is held to a lighter procedural standard: one meeting, an opportunity to respond, and one right of appeal. Failing to follow even this lighter procedure allows a Tribunal to uplift any basic award by up to 25%. After nine months, the full disciplinary procedure under the ACAS Code applies. See your rights if facing redundancy for the related redundancy changes.

Zero-hours and variable-hours workers

The Act introduces a right for workers who have a regular working pattern over a 12-week reference period to be offered a guaranteed-hours contract reflecting that pattern. Workers can decline and stay on a flexible arrangement — the right is an offer, not a compulsion. Employers are prohibited from subjecting workers to detriment for exercising this right. The existing ban on exclusivity clauses in zero-hours contracts (under the Zero Hours Workers (Exclusivity Terms) (Unenforceability) and Zero Hours Workers (Exclusivity Terms) Regulations 2015) is retained. See the zero-hours contracts article for your existing rights.

Collective redundancy: lower threshold

The collective consultation threshold under s.188 of TULRCA 1992 has been lowered: employers proposing to make 10 or more redundancies at one establishment within 90 days must now collectively consult, down from the previous 20. The minimum consultation periods remain 30 days (10–99 redundancies) and 45 days (100+). Failure to consult entitles affected employees to a protective award of up to 90 days' pay. See the redundancy consultation rights guide for the step-by-step procedure.

Fire and rehire: near-absolute restriction

The Act makes it automatically unfair to dismiss an employee and re-engage them on worse terms unless the employer can show insolvency-level financial distress. The previous "last resort" defence — that the business would fail without the changes — is retained but dramatically narrowed. Employers who use fire-and-rehire as a negotiating tactic face automatic unfair dismissal findings and potentially uncapped compensation. The statutory Code of Practice on dismissal and re-engagement remains in force alongside the Act.

What to do next

If you have been dismissed and think it was unfair, the first step is to contact ACAS Early Conciliation before the three-month deadline. If you have a grievance while still employed, use your employer's grievance procedure first. The Citizens Advice dismissal guide and the unfair dismissal step-by-step guide are your next reads.

This article is for general information only and is not legal advice. Always check the official source and consult a qualified lawyer for your situation.