The new Employment Rights Act 2025 includes updates to dismissal rights after six months and uncapped compensation from 2027.
-- Hatton James Legal, an employment law firm based in England, has recently published a guide that explains everything an employer should know about the upcoming changes to employment law. The Employment Rights Act 2025 is due to come into force on January 1st 2027, bringing with it a range of changes for businesses across the UK.
The law firm reports that one of the biggest changes involves the right to claim unfair dismissal. Current laws state that an employee must have worked for a company for at least 2 years (103 weeks) before they can claim this, while the new law changes this to 6 months (25 weeks). This means that employees can make unfair dismissal claims a lot sooner than they can right now.
Hatton James Legal goes on to explain that the Employment Rights Act 2025 removes the existing cap on unfair dismissal compensation - which is currently set at 52 weeks' pay or £118,000 (whichever is lower). The new law removes this completely, bringing it in line with whistleblowing and discrimination claims.
Alongside changes to unfair dismissal, the law will ban fire and rehire unless the employer can prove it was a financial necessity, which will be very hard to show. This ban will prevent instances when an employer fires an employee and re-hires them immediately as a way to impose worse terms within their contracts.
Hatton James Legal’s report on the changes to employment law goes on to cover paid carers' leave, bereavement leave for parents, a duty to consult workers on tipping policies, a duty to prevent third-party harassment, and compensation for last-minute shift changes or cancellations.
The firm believes that these changes will lead to more tribunal claims, tougher settlement negotiations, and added pressure on already strained tribunals. The full report is available to view here: https://www.hattonjameslegal.co.uk/employment-rights-act-2025/.
About Hatton James Legal
Hatton James Legal is an employment law firm with offices in Birmingham, London, Solihull and Walsall. The company represents businesses and individuals across cases involving employment, corporate and commercial law.
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Name: Jaspal Singh
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Organization: Hatton James Legal
Address: Eleven Brindley Place, Birmingham, B1 2LP
Phone: 0121 631 3000
Website: https://www.hattonjameslegal.co.uk/
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