At a Glance

The Employment Rights Bill has undergone a dramatic journey through Parliament, but on 16 December 2025 it successfully completed its final stages, to finally become the Employment Rights Act 2025 (‘ERA 2025’) on 18 December 2025.

But this is just the beginning for employers, with a phased approach to implementation and further reforms potentially coming down the line. In this article, we take stock of where we are, what employers need to know and how employers can prepare for implementation now.

Background

The ERA 2025’s journey to law has been long and eventful since the bill’s first introduction to Parliament on 10 October 2024. It has expanded significantly from its original version (almost doubling in size and is now over 300 pages) with new reforms being added until the very end. In fact, in a surprise last-minute change, the Government dropped its plan to introduce day one unfair dismissal rights, instead agreeing to reduce the current qualifying period from 2 years to 6 months and removing the compensation cap for unfair dismissal – a major change to the law that could fundamentally change how employers approach recruitment and dismissal.  

Timings for Implementation

Measures under the ERA 2025 are expected to take effect in phases.

Some early changes to trade union laws came into force immediately upon Royal Assent (repealing laws on minimum service levels) or are due to come in 2 months later (such as repealing many of the trade union laws relating to industrial action brought in by the Conservative government under the Trade Union Act 2016) (see our article here).

Otherwise, changes are expected to be implemented by regulations in stages during 2026 and 2027. The Government’s published roadmap sets out the Government’s implementation timeline (to which it currently intends to stick). It also includes an ambitious programme of consultations – some further 26 consultations are rumoured – to determine the practical details to be set out in secondary legislation, codes of practice and guidance.

Some complex reforms, such as restrictions on the use of zero-hour contracts, are not expected to come into force until 2027 and the Government has indicated that changes to unfair dismissal are currently anticipated to come into force on 1 January 2027 but this is set to be clarified.

However, timelines could be subject to change, particularly if consultations and resulting regulations are delayed.

For a detailed overview of the expected timings for each reform see our Reform Hub, which will be updated for ongoing developments.

The ERA 2025 Explained

The ERA 2025 is a complex piece of law, which adds to and amends lots of existing employment legislation and introduces significant changes to employment law.

You can read about each set of changes in more detail on our Reform Hub. Key changes are linked below:

For the most part, the ERA 2025 applies to Great Britain (so England, Wales and Scotland).

Impacts for Employers

Reforms in the ERA 2025 will impact all parts of the employment relationship leading to:

  • Fundamental changes in key HR processes at every stage of the employment lifecycle (from recruitment to dismissal and confidentiality agreements)
  • Changes to employee relations and union rights (including measures aimed at making it easier for unions to build up support and gain bargaining rights)
  • An increased focus on employment law compliance and enforcement (including the establishment of a new single enforcement body)

However, although the individual changes are significant the real impact will likely be seen in the complex interplay between the reforms.

To give a couple of examples, we may see a change in how dismissals and disputes about dismissals are handled. The reduction in the qualifying period to 6 months coupled with the removal of the compensation cap for unfair dismissal claims will likely increase the risk and management time involved in dismissing an employee. There will be a greater emphasis on following and fully documenting the reason to dismiss and steps taken to do so. Add to this the increase in time periods to bring an employment tribunal claim and the recent extension to the ACAS conciliation period (which will be reviewed in October 2026), even if an employer thinks it has followed the dismissal process properly, it may become more difficult for the employer to have peace of mind that an employee will not bring a claim. Given this, employers may also become more cautious on hiring or on continuing to employ someone who hasn’t performed well in the first couple of months.

In addition, we may see an impact on employee relations and engagement strategies. The changes to trade unions and collective bargaining, such as the new right of digital and physical access to workplaces for unions, and a new obligation for employees to be informed of the right to join a union may see increases in union activity and see employers who currently do not have to engage with unions having to do so.

How Can Employers Prepare?

The ERA 2025 brings significant changes for employers. Employers should consider allocating resource and time to track developments, update stakeholders and proactively prepare for how these changes will affect their business. Although it may feel as though responding to these changes can wait, acting now can mitigate against future operational and legal risk. Early preparation will create stronger foundations and reduce the likelihood of issues arising when the new laws take effect.

To help prepare for changes, in addition to tracking developments, employers may want to take the following preparatory steps:

  • Assess impacts on recruitment, resourcing and organisational change – Even if all details of changes are not yet known, early high-level assessments can help highlight potential risks, which can then be refined later
  • Audit and update HR policies, procedures and contracts and train staff to ensure readiness for implementation:
    • Ensure template contracts, policies, procedures and practices are up to date and consider any early changes to mitigate risks. These should then be kept under review and amended when appropriate for future compliance
    • Maintain a regular training programme for HR, line managers and other staff, on the changes and update any regular training for ongoing compliance
  • Consider employee relations strategies in light of trade union related changes: If already unionised review industrial relations strategies, and if not consider likelihood of requests for access or recognition. Consider if employee relations can be improved and enhanced in less formal ways

Of course, these are only some of the steps that employers may need to take, organisations should consider what is appropriate for their business.

Next Steps

The ERA 2025 changes are significant but are currently only ‘phase one’ of the Government’s plan to reform the world of work. Other reforms are also anticipated, for example, extending pay gap reporting and equal pay to ethnicity and disability among other equality law reforms anticipated via an Equality (Race and Disability) Bill.

Reviews into areas such as parental leave (which is underway but in the early stages) and TUPE are also anticipated. As is a full a consultation to review the employment and worker status framework, which is anticipated by the end of 2025 (but still awaited). Reforms to non-competes have also been added to the reform agenda recently.

While these additional reforms are not in the ERA 2025, they are nonetheless potentially significant. If implemented as currently outlined, they will drive further change to employment law and HR processes. In particular, the impact of the ERA 2025’s reforms could be amplified should the scope of individuals eligible for the full suite of employment rights (currently reserved for employees) be broadened in the future after a review of worker status.

How We Can Help

Download our ‘At a Glance’ guide for an overview of the changes, with some additional practical guidance on how to prepare.

For ongoing updates and details of our events visit our Reform Hub and subscribe via our website to our newsletter.

Please reach out to Natasha Adom, Partner – Head of Client Training, for any training enquiries.

If you would like any support with preparing for these changes and how they impact your business, please do not hesitate to contact us for tailored advice.