This month we look at progress with the Employment Rights Act, a discrimination case relating to disability and the confirmation of National Minimum Wage rates.

Employment Rights Act 2025 becomes law

The long-anticipated Employment Rights Act 2025 has now received Royal Assent, marking a major overhaul of employment law in the UK. The Act brings in a suite of reforms that will be phased in over the next couple of years.

After a battle with the House of Lords, the government has U‑turned on plans to give all workers the right to claim unfair dismissal from day one. Instead, the qualifying period will be reduced from two years to six months, expected to take effect from 1 January 2027. Recruitment, probation and performance management processes may all need tightening in order to reduce reliance on being able to easily dismiss early in employment.

Separately, the cap on compensatory awards for unfair dismissal, currently the lower of a year’s salary or £118,223, can be removed, making awards unlimited. An impact statement on the implications of unlimited awards will be published before regulations are introduced.

The House of Lords dropped its push for a right to request guaranteed hours for zero‑hours workers, meaning qualifying workers and agency staff, including those on zero‑hours or low‑hours contracts, must be offered guaranteed hours at the end of each reference period, likely every 12 weeks, without having to request it.

The law will also introduce other new worker protections, including strengthened parental leave and statutory sick pay rights and the mainstreaming of guaranteed minimum hours and notice requirements for shift workers previously engaged on casual or zero-hours contracts.

Now the Act is law, it’s time to start reviewing and planning. Businesses with highly capable managers who can recruit effectively, and who manage probation and performance well, with find the changes impact them significantly less, so reviewing these processes and ensuring managers are equipped should be priorities.

Last month our articles focused on  end of year reviews.

This month, look out for tips on using HR technology to help with people management.

UK Immigration Skills Charge rises

Small employers who sponsor overseas workers under the UK’s Skilled Worker and Global Business Mobility visa routes now face higher immigration costs following changes that took effect last month. The Immigration Skills Charge (ISC), the fee employers must pay when assigning a Certificate of Sponsorship, has risen by around 32%.

This is the first increase in the ISC since it was introduced in 2017 and will add cost pressure at a time when many small businesses are already managing tight budgets and skills shortages. The charge must be paid upfront when a Certificate of Sponsorship is assigned.

Nurse wins harassment claim over changing room arrangements

In this claim a senior NHS nurse who brought claims against her employer after becoming distressed by working arrangements involving shared access to single‑sex facilities. The health board employed a doctor who was born male but identifies as a woman, and allowed the doctor to use the female changing room. The nurse argued that being expected to use the changing room in those circumstances caused her significant anxiety and that the employer’s handling of her complaints amounted to harassment.

The tribunal found that the health board had indeed harassed the nurse by not sufficiently addressing her concerns about accessing shared facilities. While broader discrimination claims and allegations against the individual doctor were dismissed, the panel agreed that the employer’s “continuing failure to put practical arrangements in place” before her concerns were resolved amounted to harassment.

When it comes to policies on toilets, locker rooms or other sex‑segregated spaces, it’s vital to consider dignity and safety issues for all staff. Formal complaints about shared facilities or safety should trigger documented risk assessments and, where possible, interim practical measures. Even if you don’t agree with an employee’s view, failing to respond in a timely, documented way can itself be unlawful.

“Disorganised” employee wins disability discrimination claim

A recent Employment Tribunal ruling highlights how easily informal managerial behaviour can tip into unlawful disability discrimination, and why small employers need to be careful with everyday interactions and performance discussions.

The claimant, a public relations employee with a medically recognised ADHD diagnosis brought claims against her employer for disability discrimination and unfair constructive dismissal. The tribunal found in her favour, concluding that a manager’s repeated characterisation of her as “disorganised”, linked to her ADHD, “undermined her dignity” and created an unfavourable environment connected to her disability.

Rather than being trivial workplace banter, the judge agreed that such comments, especially when reinforced over time and tied to performance criticism, could amount to unlawful discrimination. The tribunal also upheld the employee’s claim for unfair constructive dismissal, finding that the cumulative treatment forced her to resign.

Informal comments about performance that tap into traits of a diagnosed condition can risk discrimination claims, even where you think you’re just providing feedback. Employers need to be mindful of everyday interactions, not just formal adjustments.

National Minimum Wage rates for April 2026 have now been confirmed, with the National Living Wage for 21‑plus workers rising to £12.71 per hr, 18‑20 rates to £10.85 per hr and 16‑17 apprentice rates to £8.00 per hr, employers should start budgeting now.

New CIPD research shows a sharp decline in hiring confidence and an increase in redundancy plans among UK employers this winter, with many citing looming National Insurance and National Minimum Wage cost pressures as key concerns.

UK unemployment hit 5.1% in the quarter to October 2025, with labour market experts describing the trend as a “weakening labour market” and concerns rising about youth employment opportunities.

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