ARTICLE
16 January 2026

UK Employment Rights Act 2025: More Secure Work And Basic Employment Rights

AO
A&O Shearman

Contributor

A&O Shearman was formed in 2024 via the merger of two historic firms, Allen & Overy and Shearman & Sterling. With nearly 4,000 lawyers globally, we are equally fluent in English law, U.S. law and the laws of the world’s most dynamic markets. This combination creates a new kind of law firm, one built to achieve unparalleled outcomes for our clients on their most complex, multijurisdictional matters – everywhere in the world. A firm that advises at the forefront of the forces changing the current of global business and that is unrivalled in its global strength. Our clients benefit from the collective experience of teams who work with many of the world’s most influential companies and institutions, and have a history of precedent-setting innovations. Together our lawyers advise more than a third of NYSE-listed businesses, a fifth of the NASDAQ and a notable proportion of the London Stock Exchange, the Euronext, Euronext Paris and the Tokyo and Hong Kong Stock Exchanges.
As we settle into 2026, many employers will be turning New Year intentions into action plans.
United Kingdom Employment and HR
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As we settle into 2026, many employers will be turning New Year intentions into action plans.
The Employment Rights Act 2025 tops the HR legal to-do list for the year ahead, with significant strategic and operational work required across the coming 12–18 months.

Ourprevious blogoutlined the key upcoming changes. As promised, we have materials to help your organisation plan ahead.

Our firstEmployment Rights Act 2025 reference tablefocuses on changes that go right to the heart of the employment relationship: strengthening unfair dismissal protection and curbing unfair contractual arrangements and variations.

Unfair dismissal reform has dominated recent media coverage. In a U-turn during parliamentary ping-pong at the end of last year, the Government has replaced its proposed "day one" protection with a six-month qualifying period. At the eleventh hour, it also removed the unfair dismissal compensation cap, prompting widespread concern across the business community.

The Government's recent impact assessments offer little detail and downplay the potential impact of the cap's removal on businesses, especially those with high-earners. Employers hoping for mitigating measures or alternative options will be disappointed, as none are proposed. However, upcoming stakeholder meetings may offer an opportunity to raise concerns and to push for concessions in guidance.

There is also an overview of the new protections for zero-hour, low-hour and agency workers.
Our next table will look at family-friendly rights and equality changes under the 2025 Act.
In the meantime, if you have any questions about the measures discussed in this table, please contact the team.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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