Employment Rights Act 2025 is passed as Bill receives royal assent: Legal comment

The Employment Rights Bill has received royal assent, passing into law as the Employment Rights Act 2025.

Fourteen months after the Labour government’s legislation to modernise workers’ rights was first tabled on 10 October 2024, it cleared the final hurdle in Parliament this week before its formal passage today (18 December). 

Lee Ashwood, Partner in employment at UK and Ireland law firm Browne Jacobson, said: “While the Employment Rights Act represents the most comprehensive overhaul of UK employment law in decades, its challenging passage through Parliament has somewhat watered down the original Bill’s promise to fundamentally reform workers’ rights.

“In particular, the government has been forced to make compromises on key proposals such as ‘fire and hire’ and unfair dismissal protections, while there is still some uncertainty on how other key reforms will look given there are more legislative steps to take.

“Most of the changes in the law require commencement regulations to bring them into force and many require further substantive regulations, together with associated consultation before they can be brought into effect.

“Therefore, some of the biggest changes – including to collective redundancy consultation, guaranteed hours contracts and unfair dismissal – won’t come into force until 2027. Equally, the final detail of the secondary legislation may be impacted by the responses to the various consultations.

“That said, the Employment Rights Act still delivers significant impacts on employees and their employers across all sizes and sectors. Its 28 major reforms will reshape worker protections across England, Scotland and Wales by strengthening employee security, tackling exploitative practices and modernising workplace rights.

“For employers and HR professionals, this legislation requires a reassessment of employment practices across all sectors. Organisations should be reviewing and updating their policies and procedures covering a wide range of areas, including recruitment, probationary periods, disciplinaries, collective redundancies, trade union relations, non-disclosure agreements and protection from workplace harassment.”