UK Employment Rights Act 2025 - Sickness Absence Reform: Key Updates for UK Employers

Sickness absence continues to pose a significant challenge for employers in the UK, as the latest Office for National Statistics (ONS) figures indicate that 148.9 million working days were lost in 2024—remaining above levels observed prior to the pandemic. Data from sources including the ONS and CIPD suggests that mental health and musculoskeletal conditions now account for a significant proportion of long-term absences.

Against this backdrop, the Employment Rights Act 2025 (ERA) is set to make a number of significant changes relating to sickness absence, most notably by increasing statutory sick pay (SSP) entitlements for employees.

Other measures on the horizon include ERA reforms such as changes to flexible working and workplace harassment, which may indirectly impact absence levels by creating more inclusive workplaces and easing access to work. In the longer-term, the Keep Britain Working Review published in November 2025 suggests there may be major changes to how workplace sickness absence will be managed in the coming years.

This briefing outlines key short-term and longer term reforms, their implications, and what employers should do now.

Employment Rights Act 2025: Statutory Sick Pay

ERA represents the most significant overhaul of employment law in a generation. One of the earlier tranches of changes, set to take place on 6 April 2026, includes changes to SSP entitlements for employees.

From 6 April 2026, SSP will undergo the following fundamental changes:

• Day-one entitlement: SSP will be payable from the first day of absence, removing the current three-day waiting period.
• Expanded eligibility: The Lower Earnings Limit (currently £123 per week) will be abolished, extending SSP to approximately 1.3 million low-paid workers previously excluded.
• Payment structure: Employees will receive the lower of the flat rate (£123.25 per week from April 2026) or 80% of their normal weekly earnings.

In its ERA Economic Analysis, published in January 2026, the government identified SSP reforms as one of four ERA policies with the highest cost to businesses, stating that DWP analysis suggests the additional SSP payments made by employers are expected to cost around £400 million per year.

As well as requiring employers to implement practical changes such as updating payroll systems and absence policies, the SSP reforms make it more important than ever for employers to ensure they have effective sickness absence management systems in place, in an attempt to mitigate the impact of increased SSP payments from 6 April onwards. 

Employment Rights Act 2025: Other Changes Impacting Absence

A number of other ERA changes have the potential to impact on employee absence rates, including those set out in the table below.

Change	Impact
Harassment Duties: Disclosures in relation to sexual harassment will be explicitly protected under whistleblowing legislation from 6 April 2026. From October 2026, employers must take “all reasonable steps” to prevent sexual harassment, including liability for third-party harassment.	These changes are aimed at creating safer and more inclusive workplaces where employees are at a lower risk of being subject to discrimination and harassment. Employers who prepare for these changes may have the opportunity to reduce absence levels, in particular in relation to issues such as workplace stress and associated conditions.
Flexible Working: The right to request flexible working became a day-one right in 2024. The ERA will strengthen this by requiring employers to justify refusals as “reasonable” and explain decisions in writing. Implementation is planned for 2027 with the exact date to be confirmed.	The change is likely to increase successful flexible working requests. This could reduce absence linked to health conditions, as employees have greater flexibility to agree working arrangements that accommodate their health related needs.
Unfair Dismissal: The qualifying period for unfair dismissal claims is due to reduce from 2 years to six months and the compensation cap will be removed. This is due to impact on 1 January 2027.	Enhanced unfair dismissal rights mean that employees who are dismissed for absence related reasons are more likely to qualify for unfair dismissal claims and recover higher compensation amounts. This increases the need for employers to ensure they handle absence management fairly and lawfully.

Longer-Term Outlook: The Keep Britain Working Review

The Keep Britain Working Review, published in November 2025 and led by Sir Charlie Mayfield, highlighted a “quiet but urgent crisis” in workforce health, noting that employers lose on average £120 per day in profit from sickness absence.

The review also noted three persistent problems relating to workplace health and disability:

• a culture of fear that is felt by employees and by employers, especially line managers.
• a lack of an effective or consistent support system for employers and their employees in managing health and tackling barriers faced by disabled people.
• structural challenges for disabled people, creating barriers to starting and staying in work.

The review made the following recommendations:

• Healthy Working Lifecycle Standard: A proposed certified standard by 2029 to define best practice in reduced sickness absence and return-to-work support.
• Workplace Health Provision: A service offering guidance and support on absence related issues for employers, focusing initially on new “stay in work” and “return to work” plans.
• Workplace Health Intelligence Unit: A central body to collect data and guide policy.

Since publication of the Keep Britain Working Review, the Government has begun active implementation through an employer‑led “Vanguard” phase, with over 100 employers now participating and work underway to establish a Workplace Health Intelligence Unit. Sir Charlie Mayfield has recently indicated (on the BBC’s Today programme) that implementation of the Keep Britain Working Review is being accelerated, with the original three‑year Vanguard phase likely to be compressed, and a framework of solutions potentially available within one year. 

Practical Steps for Employers

With the SSP changes due to impact in the near future, and in light of the ongoing high rates of sickness absence in the UK, ensuring best practice in absence management should be high on the agenda of employers. Steps employers can take to improve their approach to absence management include:

• Review policies and contracts: Update sickness absence, flexible working, and harassment policies.
• Budget for increased costs: Factor SSP changes into workforce financial planning.
• Train managers: Equip line managers to manage both short-term and long-term absence, to support employees with disabilities and other health conditions and to implement phased returns to work.
• Invest in wellbeing and Occupational Health: Early intervention in employee absence will become increasingly important, as will aiming to reduce absence triggers such as work related stress, difficult working conditions, poor workplace culture and lack of employee support.
• Monitor absence data and review strategy: Track absence patterns to identify hotspots and evaluate interventions. Consider whether an overhaul of absence management strategy is needed.
• Prepare for future change: Employers will need to be ready for both the SSP provisions of ERA and also the longer term changes highlighted above.