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United Kingdom: Employment Rights Act 2025 Update – Summary and Next Steps

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In brief

The Employment Rights Bill was approved and finalised on 18 December 2025, after many rounds of parliamentary “ping pong”, becoming the Employment Rights Act (ERA) 2025. Its final form is substantively very similar to previous versions, with one important exception: the retention of a qualifying period for unfair dismissal rights (albeit reduced from two years to six months) and the removal of any cap on unfair dismissal compensation.

Although we now have a finalised ERA 2025, many key areas of detail are subject to consultations and further regulations. This article summarises the Act’s key provisions, the areas of outstanding detail, anticipated timelines (as set out in the government’s updated timeline on 4 February 2026), and what organisations could or should be doing now to prepare.

Download the full version of United Kingdom: Employment Rights Act 2025 Update – Summary and Next Steps.

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Carl is a partner in the Employment Group at Baker McKenzie. He focuses on advising organisations on the employment aspects of financial transactions together with more general employment and litigation advice. Carl has been recommended in the Chambers legal directory as being “hailed for his rigour and interpersonal approach to assignments”, an ability to “build a rapport very quickly with clients." Carl is also recommended by Legal 500 and has been quoted as being “excellent across the board” “very thorough,” “strong on transactional matters," “staying on top of the issues” and is further quoted as being “thorough, patient and goes the extra mile.”

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Julia Wilson is a partner in Baker McKenzie's Employment & Compensation team in London and co-chair of the Firm's Workforce Redesign client solution. Julia also leads the employment data privacy practice in London. Julia advises multinational organisations on a wide range of employment and data protection matters. She is highly regarded by clients, who describe her as a “standout” performer who "knows how we think." A member of the Firm's Pro Bono Committee, she plays a lead role in the Firm's pro bono relationship with Save the Children International. She also collaborates with Law Works to deliver employment law training to solicitors who provide pro bono advice to individuals. Julia regularly presents and moderates panels on podcasts, webinars and in-person events, is often quoted in mainstream media, and authors articles and precedents for a range of industry and other publications.

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Kim Sartin is a partner in Baker McKenzie's Employment and Compensation team in London and a Member of the Firm’s Global TMT Group SteerCo. She is ranked as a leading individual in Chambers, as Up and Coming for Industrial Relations and recognised for her experience in the TMT sector (Chambers Global, UK). She is described as “a true global partner” who “stands apart with her business acumen”.

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Stephen Ratcliffe is a partner in Baker McKenzie's Employment and Compensation practice in London in which he has worked for over 20 years. He advises on the full range of contentious and non-contentious employment law matters for which he has been ranked for multiple years in Chambers & Partners. He is also a member of the Legislative & Policy Committee of the Employment Lawyers Association, and a member of the Employment Consulting Editorial Board of Lexis+. In addition to his day to day practice, Stephen is the London Office's Training Principal and co-Chairs the London BakerWomen group.

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Jonathan Tuck is a partner in the Baker McKenzie employment department. Jonathan joined the Firm in June 2012 and completed secondments at Google between March and July 2015 and British Airways between July 2015 and January 2016.

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Matthew is a partner in the Employment Group of the London office at Baker McKenzie. Matthew joined the Firm in August 2015, having previously worked as an associate in the UK offices of an international firm.

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