The Employment Rights Act 2025 finally received Royal Assent and became law on 18 December 2025. It represents what the government has described as “the biggest upgrade of workers’ rights in a generation” and includes a raft of changes to the current industrial relations framework.
This article, published in International Employment Lawyer on 20 January 2026, covers a number of the key changes, some of which will apply from as early as February 2026.

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.

In an article published in Compliance & Risk Journal, Kim Sartin, Lauren French and Melissa Chan discuss the new duty on employers to take reasonable steps to prevent sexual harassment of their workers in the course of their employment that came into force on 26 October 2024.

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.

In its “Make Work Pay” manifesto, the Labour government pledged to bring in the “right to switch off” for workers. The government is reportedly considering a Code of Practice on such right, which may operate in a similar way to the Codes of Practice on disciplinary and grievance matters, and fire and rehire, with the potential for uplifts in compensation for specified types of claims where there has been non-compliance. Full details of the proposals are awaited but employers may wish to examine their hybrid and remote working arrangements now in order to ensure that they can react swiftly to future developments.

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 Parker Review Committee has published its latest report on ethnic minority representation at board level and within senior management at FTSE350 companies, and the 50 largest private companies in the UK. Ethnic minority directors currently represent 19% of FTSE 100 directors, 13.5% of FTSE 250 directors and 11% of relevant private company directors.

The government has announced the annual increases to tribunal compensation awards and statutory redundancy payments from 6 April 2024.

Following calls by the European Parliament for potentially far-reaching changes, the European Commission has now kicked off the EU legislative process to revise the European Works Council Directive. This alert provides an update on the Commission’s proposals, and we will issue further alerts as the legislative process continues.