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 European Commission has issued its first fine in a no-poach case in the labor market, and its first sanction of the anti-competitive use of a minority share in a competing business. With the fine of EUR 329 million, the Commission joins the ranks of a number of high-profile antitrust enforcers worldwide that have targeted HR-related infringements. The Commission’s first intervention is also likely to encourage other EU regulators to follow suit and is an important reminder of the need to carefully manage antitrust risk (specifically information flows) where a company holds a minority shareholding in a competitor.

The Presidents of the Employment Tribunals (England & Wales and Scotland) have issued an addendum to the Joint Presidential Guidance on employment tribunal awards, updating the Vento bands for damages for injury to feelings and psychiatric injury in discrimination claims.

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 Employment Appeal Tribunal has upheld an employment tribunal’s decision that an employee was precluded from bringing disability discrimination claims against his employer as they had been validly waived under a prior settlement agreement. The decision confirms the Court of Session’s decision in Bathgate v. Technip Singapore PTE Ltd that unknown future claims can be validly waived under a settlement agreement although the drafting will need to be absolutely clear in this respect.

We are delighted to share our Diving into Diversity Vlog Series. Our Baker McKenzie Employment team will be diving into Inclusion, Diversity & Equity topics throughout this series to bring your attention to upcoming changes, interesting developments and key employment law takeaways. This 10-minute watch deals with the increasing cost of the UK visa process and the impact these changes will have on employers.

In the past few years, enforcement against restrictive labor market agreements has become a priority for many competition authorities worldwide. As a result, certain HR practices are in the spotlight of antitrust enforcers and may result in significant fines or even criminal liability. For more information, please read our briefing document, International Antitrust Onslaught against HR practices: Act now to stay ahead of the game.

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.