Employment Alert – The Employment Rights Bill has passed!
What’s happening?
After a protracted period of parliamentary ping-pong, the Employment Rights Bill was finally passed on 16 December 2025 (and so will, very shortly, become the Employment Rights Act).
Further to our previous update, it has been confirmed that the statutory cap on compensation for unfair dismissal claims will be removed. This does not impact on the basic award and statutory redundancy pay which are still calculated on a formula based on age, length of service and gross weekly pay.
An impact assessment has been promised, but it’s currently unclear whether any further consultation will take place.
Why is this important?
The passing of this Bill marks a significant shift in employment law. It introduces new and enhanced rights for workers that employers will have to understand and prepare for.
Employers should act now to plan for these changes and implement robust strategies to ensure full compliance with the incoming Act.
What should you do?
Employers should take proactive steps, including:
- Review probation and performance processes – ensure contractual probation periods and review mechanisms are consistent and robust. Early intervention on performance issues and maintaining clear documentation will be critical in defending claims.
- Enhance HR governance and training – engage with affected teams across the business to address each reform area. Update managers on new duties and processes.
- Communicate clearly with your workforce – provide employee briefings and updates, revise handbooks and update all internal materials to reflect the changes that will be introduced by the Act.
Take Advice: If you require advice on how these changes may affect your business or would like support preparing for implementation, please contact Britney.wildig@trethowans.com who can put you in touch with one of our specialist employment lawyers.
All comments and information were accurate at the time of publication and may not reflect current developments. They should not be relied upon without seeking appropriate professional advice.
