Employment Rights Act 2025 Update for Charities

What voluntary organisations need to know

The Employment Rights Act introduces the biggest changes to employment law in many years. Some changes are already in force, others will be introduced during 2026 and 2027. While many organisations will not need to make immediate changes, now is a good time to review your HR policies, management processes and record keeping.

A recent briefing from ACEVO, the Association of Chief Executives of Voluntary Organisations, highlights the main changes affecting charities, community groups, faith organisations and social enterprises. Below are the main takeaways from this briefing.

Changes already introduced (April 2026)

Statutory Sick Pay

Statutory Sick Pay (SSP) has changed significantly.

The main changes are:

• SSP is now payable from the first day of sickness absence.

• The previous three-day waiting period has been removed.

• Workers no longer need to earn above the Lower Earnings Limit to qualify.

• Eligible workers receive either 80% of normal weekly earnings or the statutory flat rate (whichever is lower).

What organisations should do

• Review your sickness absence policy.

• Make sure staff understand the new entitlement.

• Monitor whether short-term sickness absence changes and ensure managers know how to manage attendance consistently.

Paternity Leave and Parental Leave

Paternity Leave and unpaid Parental Leave have become "day one" employment rights. This means employees no longer need a qualifying period before becoming entitled to take the leave itself. However:

• statutory paternity pay still requires qualifying service

• parental leave remains unpaid

• additional protections now exist where a child's mother dies during the first year after birth.

What organisations should do

• Update family leave policies.

• Decide whether your organisation wishes to offer enhanced paternity pay from day one, even where statutory pay is not available.

• Communicate any changes clearly to staff.

Fair Work Agency

A new Fair Work Agency has been created by bringing together several existing employment enforcement bodies. The Agency has stronger powers, including the ability to:

• investigate compliance

• issue notices where statutory payments have not been made

• require employers to produce employment records

• support workers in Employment Tribunal claims.

For employers, this means employment compliance is likely to become more actively monitored than in the past.

Holiday Records

Employers are now expected to keep much more detailed records showing:

• holiday entitlement

• leave taken

• how holiday pay has been calculated.

Failure to maintain these records could become a criminal offence.

Whistleblowing and Sexual Harassment

Reports of sexual harassment made in the public interest now receive whistleblowing protection. This means organisations should ensure that:

• whistleblowing policies

• dignity at work policies

• sexual harassment procedures

These all work together and reference one another where appropriate.

Collective Redundancy

Where 20 or more redundancies are proposed within a 90-day period, organisations could now face much higher financial penalties if consultation requirements are not followed correctly. Further changes are expected during 2027.

Any organisation considering significant restructuring should seek HR or legal advice as early as possible.

Changes expected during October 2026

Protection from Third-Party Harassment

Employers will become responsible for taking reasonable steps to protect staff from harassment by people who are not employees, such as:

• Service users

• Beneficiaries

• Customers

• Contractors

• Visitors

For many charities, this may be one of the biggest practical changes.

Consider

• Staff training

• Clear reporting procedures

• Communications to service users about expected behaviour

• Risk assessments where staff may be exposed to challenging situations

Employment Tribunal Time Limits

The time limit for bringing most Employment Tribunal claims is expected to increase from three months to six months. This makes accurate record keeping and written management notes even more important.

Trade Union Changes

A number of changes will strengthen trade union rights, including:

• Simplified recognition processes

• Greater access to workplaces

• Increased protections for union representatives

• Future requirements for employers to inform staff of their right to join a union.

Most smaller charities are unlikely to see immediate operational changes, but organisations should monitor future guidance.

Changes expected during 2027

Some of the largest reforms are expected to arrive during 2027.

These include:

• Reducing the qualifying period for unfair dismissal claims from two years to six months

• Stronger restrictions on "fire and rehire"

• Improved protections during pregnancy and maternity

• A new right to bereavement leave

• Stronger rights for flexible working requests

• Guaranteed hours for many zero-hours workers

• Compensation where shifts are cancelled at short notice

The reduction in the qualifying period for unfair dismissal is likely to have the greatest impact for many employers. It means organisations will need robust recruitment, induction, probation and performance management processes much earlier in someone's employment.

Five things organisations should do now

Rather than waiting for every detail of the legislation to be confirmed, organisations can begin preparing now.

1. Review your HR policies

Check that policies covering sickness, family leave, harassment, whistleblowing, probation and disciplinary procedures reflect current law.

2. Improve manager confidence

Many employment issues become difficult because concerns are not addressed early enough. Ensure managers know how to:

• Give feedback

• Manage performance

• Hold difficult conversations

• Keep appropriate written records

3. Strengthen recruitment and probation

Successful recruitment starts before someone joins the organisation.

Review:

• Job descriptions

• Recruitment decisions

• Induction programmes

• Probation reviews

The webinar recommended formal probation reviews around three and five months to allow sufficient time for decisions before the new six-month unfair dismissal threshold applies.

4. Keep better records

Employment records are becoming increasingly important. This includes:

• Holiday records

• Absence records

• Training records

• Notes of management conversations

• Probation reviews

• Decision-making records

5. Brief your Board

Trustees have responsibility for ensuring their organisation is properly governed. Employment law changes should therefore be discussed at Board level, particularly where policy changes, additional training or HR investment may be required.

Final thoughts

The Employment Rights Act represents one of the most significant changes to employment law in recent years, but most organisations do not need to panic.

The strongest message from the ACEVO briefing was that good employment practice is becoming even more important. Organisations with clear policies, trained managers, robust recruitment, effective probation processes and accurate records are likely to be well placed to adapt as the remaining changes are introduced over the next 18 months.

Need support?

If your organisation would like to review its HR policies, governance arrangements or management processes in light of the Employment Rights Act, the Wirral CVS Capacity Building Team can help you identify what changes may be needed and signpost you to specialist HR advice where appropriate.

Please contact us using the button below to discuss any of the above topics from the briefing and we'll return your enquiry promptly:

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