At the time of writing, and as 2025 comes to a close, the 'once in a generation' change to the world of work we were expecting to be in place, the Employment Rights Bill, still has not quite crossed the finishing line. While the Employment Rights Bill has stolen most of the headlines this year, it is by no means the only point of significance in employment law in 2025.
January
When we look at Employment Tribunal ("ET") trends throughout 2025, we see more and more claims relating to neurodiversity in the workplace. That trend was foreshadowed in January when we reported on a tale of two tribunals highlighting the importance of recognising and addressing neurodiversity in the workplace.
February
In February, the UK government resurrected plans to ban non-disclosure agreements in further education providers in England. Since then, the focus on the inappropriate use of NDAs has increased. It eventually culminated later in the year with measures included in the Employment Rights Bill which, once in force, are likely to significantly impact the use of settlement agreements are used in cases of harassment and discrimination.
February also saw the Court of Appeal hand down the much-anticipated judgment in Higgs v Farmor's School. Finding the school's dismissal of a staff member for sending 'unwise emails' relating to her beliefs around gender fluidity and same-sex marriage to be discriminatory, the Court made clear that the bar for speech relating to beliefs that is offensive enough to justify dismissal is a high one.
March
In March we were told the 'right to switch off' was being switched off. Intended to have been introduced via a statutory code of practice, the aim had been to ensure employees would not be routinely expected to work outside normal hours. The reason for the government no longer proceeding with this was reported to be to alleviate the burden on businesses.
14 March was also when the Employment Rights Bill had its first reading in the House of Lords. We, and many others, optimistically predicted Royal Assent by July. In the end, it did not return to the House of Commons until mid-September, when the game of 'ping pong' between the Houses started.
April
April saw the Supreme Court hand down its judgment in For Women Scotland Ltd v Scottish Ministers. The Court held that references to 'man', 'woman' and 'sex' referred to biological sex only and did not include certified sex. While this brought consistency and clarity to what those words mean in the context of the Equality Act 2010, the unintended consequences have been a lack of clarity around the provision of single-sex spaces in the workplace and wider society. A challenge in the European Court of Human Rights, some very polarised opinions and a lack of available guidance for employers and service providers mean this is a difficult issue that will continue into 2026 and potentially beyond.
May
May saw the Court of Appeal hand the decision-making baton on part-time worker discrimination to the Supreme Court. Reluctantly following a judgment of the Scottish Court of Session, the Court of Appeal upheld an EAT judgment that there was no part-time worker discrimination unless the unfavourable treatment suffered by the worker was solely on the ground of the worker's part-time status. This leaves part-time worker discrimination out of step with other protected characteristics, for which a claim can succeed if the characteristic was an effective cause, not necessarily the sole cause, of the less favourable treatment.
June
A UK government commitment that may have slipped under the radar was to bring dual or combined discrimination into force. If brought into force, this would allow individuals to bring discrimination claims based on a combination of two protected characteristics, for example race and gender. There is already a provision in the Equality Act 2010 that allows this, but it has never been brought into force. A call for evidence on how to achieve this closed in June. We may see it legislated via the expected Equality (Race and Disability) Bill. If brought into force, this would fill a long-recognised gap in the current law, which only allows claims based on single protected characteristics, making it difficult to address combined or overlapping discrimination.
July
Workplace relationships were thrust into the headlines when a video of a tech CEO and the company's CPO embracing at a Coldplay concert went viral in July. Reports of an affair were denied but reportedly following the incident, the CEO was placed on leave and the CPO eventually resigned.
July also saw the launch of a wholesale review of parental leave and pay. A report with recommendations is not expected until late 2026 at the earliest. The current regime has long been criticised for pay being out of kilter with the cost of living, entrenching gender roles and exacerbating the 'motherhood penalty'. It is hoped the review will facilitate a more joined-up regime in the future. A balance will need to be found between implementing change and not overburdening employers.
August
In August we reported on the absence mismanagement that became a million-pound mistake. Likely to be one of the highest tribunal awards of the year, it was a lesson in the importance of clear and accurate communication with employees, particularly when they are off sick. With the publication of the 2025 CIPD and Simplyhealth Health and Wellbeing Survey a few weeks later, highlighting absence levels sharply increasing over the past three years, this is a risk that all organisations need to be aware of.
September
When the parliamentary summer recess came to an end, we were all prepared for the Employment Rights Bill to get Royal Assent, but what we got was a lengthy game of parliamentary 'ping pong' which is still ongoing.
Meanwhile, research from Microsoft revealed that 71 per cent of UK employees used unapproved AI tools at work. In a warning to employers, the same research found a worryingly low number of respondents recognised the risks of using unapproved external AI assistants. From the potential for leaks of sensitive company or customer data to recognising AI hallucinations, this is an area that employers need to understand and take control of.
October
While the Employment Rights Bill itself continued to bounce between the Houses of Parliament, we did see some progress with four consultations being published on some of the measures due to be implemented in October 2026 and beyond. Noticeable by its absence, however, was any form of consultation on the day 1 right to unfair dismissal protection. That consultation, according to the Employment Rights Bill Implementation Roadmap, was due to be published in the summer or autumn. Its absence may have been a sign of things to come.
October also saw reports that fees for bringing an ET claim were to be reintroduced. Media coverage caused a short-lived furore, but the rumours were swiftly quashed, with Justice Minister David Lammy confirming it will remain free to bring a case before the ET.
November
A few weeks before the Scottish men's football team qualified for the World Cup in exceptional style, we highlighted the risk of rejecting a job applicant for being a rival football fan. While the World Cup will bring Scottish football supporters together, domestic team rivalry, particularly where religion may be a factor, is a risk hotspot for employers.
But bigger news (at least for non football fans) was the announcement that the day one right to unfair dismissal was being abandoned. The current two year service requirement will instead be replaced with a six month service requirement. In an unexpected turn, the UK government also committed to removing the compensation cap on unfair dismissal. Currently this is the lessor of 12 months gross pay or £118,223. Recent reports suggest that both the removal of the cap and the reduction in the qualifying service requirement will take effect from 1 January 2027.
A further Employment Rights Bill consultation was also published in November. This one seeks views on the introduction of a draft code of practice on electronic and workplace balloting for statutory union ballots.
December
As the end of the year approaches, we are still waiting to see if the Employment Rights Bill comes into force before 2026 begins. Just as it looked like things might be reaching their conclusion, the House of Lords rejected the UK Government amendment to remove the cap on unfair dismissal compensation. The ping pong continues. In any event, the next couple of years are set to bring an unprecedented level of activity in employment law. For more on what to expect and how to prepare for it, watch out for our preview of 2026 coming next month. You can also sign up for our What to expect in employment law in 2026 webinar, which takes place on 15 January.
