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.

On 16 December 2025, the House of Lords resolved the final point of dispute in the Employment Rights Bill – whether the cap on unfair dismissal should be removed – paving the way for Royal Assent before Christmas.
The Bill introduces sweeping employment law reforms, including new provisions on strikes and trade unions, enhanced protective awards for collective redundancies, and restrictions on fire-and-rehire practices. It also reduces the qualifying period for unfair dismissal claims to six months from January 2027, although the timing for removing the compensation cap remains uncertain.
Implementation will be phased through 2026 and 2027, supported by over 20 consultations and secondary legislation following Royal Assent.

The government has published a consultation seeking views on how to introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. The consultation closes on 10 June 2025.

Further to the Employment Rights Bill that was published on 10 October 2024, the government has launched a consultation on strengthening statutory sick pay. The consultation seeks views on the amount of statutory sick pay that employees earning less than the current eligibility threshold should receive as part of the amendments to the Employment Rights Bill.

The Equality Act 2010 gives outsourced workers broad protections from discrimination by the client on whose contract they work. However, the Court of Appeal has held that the protection does not extend to the terms of the workers’ contracts of employment with the service provider, such as pay. The EAT had held that the protection could be engaged where the client had effectively dictated the terms on which the workers were employed, but the Court of Appeal has rejected that position. Companies with outsourced workforces can still be liable in many other respects, for example if they restrict access to onsite facilities or refuse to allow individuals to work on the contract on discriminatory grounds.

The UK will have a general election on 4 July 2024, which will decide who the next government will be. The political parties have been publishing their employment and HR-related proposals, which we summarize in this article. We have limited ourselves to Labour, the Conservatives, Reform, the Liberal Democrats and the Green Party, as the current top-polling parties fielding candidates throughout Great Britain.

On 16 May 2024, the government launched a consultation concerning TUPE and European Works Councils (EWCs). There are three proposals under consultation: (1) Overturn the concept of split assignment in a TUPE transfer (where an employee’s contract of employment could be split between two transferees). (2) Confirm that TUPE only covers employees, not workers. (3) Repeal the remaining post-Brexit EWC legislation, which will likely see the end of any statutory obligations to maintain an EWC in the UK.

The EAT has decided that an employer’s liability for unlawful discrimination does not transfer under TUPE where the discriminator transfers but the victim of the discrimination does not. The position might be different though in relation to vicarious liability for negligent (rather than discriminatory) acts of an employee.

Several new employment measures have become law, dealing with redundancy protection for mothers and those returning from family leave, as well as creating new rights to carer’s and neonatal leave. There is also a new right to the allocation of tips. However, the rights might not come into force for a year or two, and some of the detail of the rights remains to be confirmed.

Draft regulations that extend the ban on exclusivity clauses in employment contracts from those on zero-hours contracts to include those earning on or less than GBP 123 per week have been laid before Parliament.