The Employment Rights Bill passed the House of Lords on 16 December 2025.
It is expected to receive Royal Assent before Christmas, as the Employment Rights Act 2025.
Much of the detail is still missing from the stages when it was going through the House of Commons, and important elements will continue to be inserted by regulations in the months to come, for example there is still no definition of “low” working hours, and it is as yet unknown what the government means to do in respect of what appears to be the
removal of a cap on the amount of compensation an ex-employee can be awarded by an Employment Tribunal for unfair dismissal.
The latter has to be set out before parts of the Act relating to unfair dismissal can be implemented. Some employment lawyers however believe that any delay in resolving the issue won’t make any practical difference to the implementation of the Act and the making of such claims.
The changes to employment law made by the Act will start coming into force from April 2026.
Now that this monster piece of draft legislation is finally about to become law, it will be possible for both Employers and Employees to review the implications of the new law.
For Employers it will be a time to review the impact on employment terms and conditions, employment contracts, policies, disciplinary and other procedures, and company handbooks.
As a very important side issue, which promises to move centre stage, Employers who use AI tools for tasks such as recruitment purposes, or for employee performance
assessments, will also need to ensure they fully appreciate the legal implications and the legal and regulatory requirements of using such AI tools.
There is a body of legislation which already applies to the use of such tools, but it may not be apparent that these new and emerging technologies are subject to our laws on data protection, equalities and anti discrimination laws, as well as needing to comply with relevant regulatory requirements.
We will be commenting from time to time on the new Act’s provisions, and also providing what we hope will be useful information and advice on the use of AI in business, and in the context of legal processes such as in Tribunals and Courts.
There is also a requirement for Employers to have the appropriate AI policies and procedures in place, and of course the tools to check the accuracy and compliance of AI outputs.