Employment Rights Act 2025 and School Staff Contracts

Many of you will be familiar with the very significant changes to employment law that will be introduced over the next few years, pursuant to the Employment Rights Act 2025 (ERA 2025), which was made law in December 2025. Our timeline of the changes can be seen here. We have spoken to many of our clients and contacts about the very substantial changes to unfair dismissal rights (including particularly the period of qualifying service to obtain those rights reducing from two years to six months, and the removal of the cap on compensation for unfair dismissal), and they are rethinking their probation and performance management processes to prepare for these changes. It is critical to be thinking about how probationary periods are proactively managed from 1 January 2027 onwards, because dismissals thereafter will need to take effect before the employee gains (just under) 6 months’ service, otherwise the standards of fairness will apply, meaning a claim is more risky, and, if successful, could be worth a lot more.

Many of our Schools are also already thinking about the impact of the changes in relation to changing staff terms and conditions. This is an area where a School may find it necessary to consider the “fire and rehire” approach (which has garnered a lot of bad press recently) if they feel they need to impose changes to terms and conditions where staff do not, or may not, specifically agree. In those circumstances, where more than 19 people are impacted, collective consultation obligations can arise. This is impacted in two key ways by the changes coming into force in early 2027. Firstly, there will be significant limitations imposed on using the “fire and rehire” technique to introduce changes. Secondly, the potential financial award available for not getting the collective consultation process correct is doubling. Therefore, now is a critically useful time to consider if any terms or conditions of employment are fit for purpose, and sustainable long-term – because changing such terms will be much harder from 2027. Now is the time to consider this, in particular, for staff who have a clear term’s notice period, as in order to give effect to such a change before the changes in law come into force, consultation may need to wrapped up in the Summer term of this year.

This would also be an excellent opportunity to consider the ongoing suitability of your staff contracts, and we set out some thinking points below for reviewing these, particularly in light of the other changes being brought in by the ERA 2025:

• Probationary periods – make sure they take into account the new qualifying period for unfair dismissal rights, and that proactive monitoring and management of probation takes place, with a termination of probation scheduled plenty of time in advance of the unfair dismissal rights arising;
• Notice entitlements – are these appropriate for the role, reflective of what the School needs, and is a full picture of the notice obligations across all staff understood?
• Benefits – are these sustainable and affordable long term, or are changes needed?
• Methods for calculating pay, including holiday pay – are these clear? Does there need to be alignment of different staff on different contracts, and are they affordable going forwards?
• Working hours – is alignment needed? Is there sufficient flexibility for the School’s needs?
• Pension entitlements – are the current entitlements affordable long-term?
• Contractual rights to enhanced redundancy payments – are these fully understood and are they affordable to maintain?

There may well be other terms in your contracts which are not affordable or sustainable long term, so we recommend reviewing all contracts in place. Careful review and planning now could mean a difficult process is not made much more difficult by the new legislation.