On December 18, 2025, the UK Government passed the Employment Rights Bill, which will now be referred to as the Employment Rights Act 2025 (the “Act“). This represents the “biggest upgrade in employment rights for a generation” and introduces a wide-ranging suite of reforms to be implemented over the course of the next two years. See our earlier client alert for additional background.

The Act is the product of intense recent negotiations between Parliament, the Government, business representatives and trade unions, resulting in some last-minute amendments being introduced as the bill made its way through the parliamentary process. The most notable changes relate to unfair dismissal rights. In the final text, unfair dismissal rights will now apply six months after an employee starts employment (rather than on the first day of employment, as promised in the Labour Party manifesto), and the statutory cap on unfair dismissal damages will be removed entirely. These measures are expected to take effect from January 1, 2027. See the second client alert in our series for a deep dive into the political context surrounding the Act and these amendments.

Looking forward, many of the Act’s provisions will require secondary legislation and/or public consultation before coming into force. The Government has already begun consulting on several measures – see the third client alert in our series for a high-level overview of the first of these consultations.

If you have questions about the Act, or any other employment matters, we are happy to assist.