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Government publishes ERA economic analysis
The UK government has published an economic analysis after granting Royal Assent to the ERA in December. The report highlights evidence-based benefits of tackling “poor working conditions, insecure work, inequalities and broken industrial relations”. It also acknowledges that delivering those benefits will impose direct costs on employers. The analysis states that the ERA will primarily transfer value from employers to workers, creating a cost for employers and a benefit for workers. The report notes that businesses and workers in sectors such as health and social care, hospitality, and retail (which rely more on variable hour/ low paid workers) will be most impacted. The analysis estimates that businesses will incur direct costs of about £1 billion per year once the ERA is fully implemented. It assesses risks to hiring and overall employment as relatively low and projects that the reforms will increase GDP by around 0.04%. Employers are already conducting their own analysis of the impact of the ERA and may find the government’s position insightful.
Tribunal user group updates on hearing wait times
HMCTS published the minutes of the October 2025 Employment Tribunal National User Group meeting, showing indicative wait times for hearings. The minutes show that most regions schedule short hearings of one to two days for late 2025 or early 2026, but London South delays them until the first half of 2027. For hearings over 10 days, the picture is mixed, with London South listing into early 2029. Anecdotally, we are seeing longer delays – we recently saw a three-day hearing fixed for January 2029. By the end of September 2025, Acas reported receiving 71,000 requests for early conciliation, a 26% increase from last year. These figures from the tribunal user group provide an interesting overview of the broader wait times across the tribunal system in England and Wales. Backlogs raise concerns about how the ERA will affect already lengthy wait times. The ERA economic analysis anticipates a 17% rise in individual enforcement cases through Acas and the tribunal system. However, it expects the Fair Work Agency’s activity to offset some of this increase.
Day one’ rights to paternity leave if a child’s mother dies
Regulations brought into force on 29 December 2025 grant new paternity leave rights in cases where a mother dies. The government originally indicated this new right would come into force in 2026, so this was unexpected. The new law provides that in the event of a mother’s death:
• there is entitlement to paternity leave for an employee from ‘day one’;
• paternity leave can be taken after a period of shared parental leave;
• an employee can take paternity leave if the child also dies; and
• enhance redundancy protection when the employee returns to work.
Equivalent provisions replicate these changes for adoptive and surrogate parents. Employers can now update policies to reflect this new entitlement.
Financial services regulator issues non financial misconduct guidance
In December, the Financial Conduct Authority published final guidance on tackling non-financial misconduct (NFM) in financial services. In July 2025, the FCA consulted on new rules to align conduct standards in banks and non-banks for serious cases of non-financial misconduct. The final rules and associated guidance will take effect on 1 September 2026. The FCA designed the new NFM guidance to help organisations apply the rules consistently and fairly. It encourages firms to make clear decisions and take decisive action when individuals breach standards. The guidance also clarifies that it complements, rather than duplicates, the Equality and Human Rights Commission’s more detailed guidance on harassment and victimisation under the Equality Act. Key changes include:
• new examples and flow charts to support the application of the rules;
• clearer explanation that managers’ accountability depends on their knowledge and authority; and
• confirmation that firms should not investigate trivial or implausible allegations or breach privacy law.
The FCA has now closed its policy work on NFM and will focus on how firms implement the new rules in practice.
Parliamentary office publishes report on AI and employment
The Parliamentary Office of Science and Technology has published a new briefing on AI and employment. POST operates as an impartial research and knowledge exchange service within Parliament. The report aims to inform readers rather than propose policy on AI and employment. It provides a helpful guide for employment specialists who want to understand AI better. The briefing outlines recent developments in AI, explains how organisations use AI, and describes its limitations. It examines the factors driving adoption and identifies the challenges that could slow progress. The report also explores which types of jobs AI may affect and analyses the implications for productivity, working conditions, and inequality. Finally, it sets out how the government is responding to these changes.
This page is updated weekly with News and Views from that week’s employment weekly briefing email. For previous articles, please contact us: Employment Law Plus.
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Employment law horizon watching | Upcoming employment law changes