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Happy Birthday to the Employment Rights Act 2025
As Royal Assent is granted today, the ERB becomes the ERA. Our guide sets out what lands when, and we look forward to working with you over the next few years as the various elements move towards implementation.
Review of the Year (Part 3)
In the final part of our review of 2025, we’re covering family friendly rights and other equality law topics as well as governance.
Family friendly rights - An official review of parental leave in the UK was announced on 1 July. The review will assess maternity, paternity and shared parental leave to see how they are working in practice and what amendments need to be made. Proposals for law reform are likely. Neonatal leave and pay came into force on 6 April. The new right to leave is a ‘day one’ entitlement, but the new right to pay needs a continuous period of at least 26 weeks’ employment ending with a ‘relevant week’ which dovetails into timeframes used for other periods of statutory leave.
Disability - The publication of the Keep Britain Working Review signalled changes to how the government will expect employers to manage health at work. It may lead to certified standards, fit note reform and financial incentives to adopt change, such as tax relief on benefits, sick pay rebates and national insurance adjustments. The Work and Pensions Committee also launched a call for evidence - “Employment support for disabled people”, on how to improve the job prospects of disabled people. Roofe-Stewart v Macintyre Care Ltd was a disabled status case which provided insights into how to assess whether a dormant chronic condition could recur if flare-ups, even if rare and of short duration, are a feature of the condition. In Stedman v Haven Leisure Ltd the EAT clarified the standalone significance of a medical diagnosis when assessing whether an employee is disabled.
Gender reassignment - The Supreme Court unanimously allowed an appeal from gender critical campaign group For Women Scotland, deciding that the definition of “woman” and “sex” in the Equality Act 2010 relates to “a biological woman and biological sex”. The process of providing updated EHRC guidance has not been straightforward. The EHRC initially issued an interim update, focussing on the issue of single sex spaces, but was clear to mark it as an update, not formal guidance. It has subsequently been withdrawn. It also consulted on amending the code of practice for services, public functions, and associations, but this did not extend to its code of practice on employment. An amended draft services code was submitted to the government for approval on 4 September 2025 which the EHRC has pressed the government to approve. In her first interview on 14 December, new EHRC Chair Dr Mary-Anne Stephenson stressed that employers must ensure everyone can access facilities, including those unwilling to use services aligned with their biological sex. She noted that single-sex spaces should not be policed and suggested practical solutions such as clear signage or converting facilities to unisex where lockable cubicles exist. The EHRC has not yet clarified its intention around providing a final position in relation to workplaces.
Employment tribunal decisions following FWS also highlight how fact-specific these cases are. In two separate but non-binding Scottish ET decisions, access to changing rooms (Peggie v Fife Health Board & Dr Upton) and toilets (Kelly v Leonardo UK Ltd) based on gender reassignment was not found to be inherently unlawful. An English ET also decided that non-binary identity is not a protected characteristic in Lockwood v Cheshire and Wirral NHS Foundation Trust. These ET decisions are likely to be appealed.
Pending further EHRC and judicial guidance, key points for employers include:
• treat complaints promptly and avoid excessive delays, especially during suspensions;
• do not conflate gender-critical beliefs with anti-trans views;.
• base decisions on facts;.
• consider both health and safety and equality obligations;
• balance competing rights and document reasoning behind decisions;
• people can have more than one protected characteristic, and one does not ‘trump’ another.
Employers must create inclusive workplaces while managing sensitive issues carefully and proportionately.
The EHRC also reviewed evidence from a ‘call for input’ on single-sex space policies in the public sector and is now taking action where it found misrepresentation of equality law. The Equality Commission for Northern Ireland published its response to the UK Supreme Court judgment, setting out the roadmap it will follow to understand the effect of this ruling in Northern Ireland.
Prevention of harassment - 26 October was the first anniversary of the new proactive duty requiring employers to take “reasonable steps” to prevent sexual harassment and employers are still working to improve harassment prevention strategies. The EHRC’s new three-year plan notes that harassment prevention remains a strategic focus.
In Campbell v Sheffield Teaching North Hospitals NHS Foundation Trust & Hammond reasonable steps taken by an employer protected it from racial harassment liability. Although this was a race discrimination case on the old style ‘all reasonable steps’ defence to a discriminatory act that has already happened, the EAT’s guidance on what steps are enough to satisfy the old defence were instructive for the new duty to prevent too.
Anonymity for victims and those accused of harassment has been a hot topic. AYZ v BZA was a reminder of the protections available through anonymity orders for victims of sexual crimes.
An EAT ruling in AG v Grafters Group Ltd about ‘out of hours’ sexual harassment gave further clarity on when employers can be vicariously liable for sexual harassment of workers which happens outside of the workplace and out of hours.
Gender equality – The government released a guide to help employers develop effective action plans that promote gender equality, with a particular focus on supporting women in the workplace. In Marston (Holdings) Ltd v Perkins a travel requirement did not obviously give rise to a discriminatory sex-based childcare disparity.
Neurodiversity – Acas published new guidance on neurodiversity in the workplace accompanied by visual guidance. The Better Hiring Institute launched a report to help employers tackle barriers that neurodiverse individuals face in the workplace. Increased litigation around neurodiversity is also reaching the EAT. In Kaler v Insights Esc a dismissal for abusive behaviour was not discriminatory, whether or not it could not be attributed to an autism diagnosis and in F v J the EAT granted anonymity to protect a claimant with Aspergers from future employer stigma. Alongside other factors, a study by Pinsent Masons linked a rise in ET claims with increasing numbers of claims relating to neurodivergence.
Mental health - The Health and Safety Executive launched a free online learning module to help employers get to grips with risk assessment of work-related stress. This is part of the HSE’s Working Minds Campaign, designed to help employers understand and fulfil their responsibilities in improving workplace mental health. The British Standards Institute published the UK’s first standard dedicated to addressing the risk of suicide and its impact in the workplace.
Religion/ belief – The EHRC’s three-year plan identified freedom of expression as a strategic priority. The Court of Appeal in Higgs v Farmor’s School gave important and clear guidance for employers dealing with expressions of belief at work.
Equality policy - The Office for Equality and Opportunity issued a call for evidence on a number of topics, including areas of existing equality law frameworks and areas for possible reform. Evidence and views were sought on topics including: the prevalence of pay discrimination on the basis of race and disability; measures to ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay; improving the enforcement of equal pay rights; improving pay transparency; strengthening protections against combined discrimination; implementation of the Public Sector Equality Duty; harassment prevention; and commencing the socio-economic duty. We await the outcome of the review.
2025
• Consultation on bereavement leave and rights for pregnant workers
2026
• Consultation on flexible working reform
• UK government to publish equality policy proposals
• Government will continue review the implementation of carer’s leave
• Paternity leave will be granted when a child’s mother dies
April 2026:
• Harassment whistleblowing protection strengthened
• Paternity leave and unpaid parental leave made 'day one' rights
• Northern Ireland to introduce miscarriage leave and pay
October 2026
• Strengthened harassment protection
2027
• Large employers to publish Equality Action Plans (voluntary from April 2026)
• Flexible working request framework strengthened
• Further specification of the requirement to take ‘all reasonable steps’ to prevent harassment
• Strengthened protections against dismissal for pregnant workers and other family leavers/ returners
• New right to unpaid bereavement leave
• New right to pregnancy loss leave
• Government to respond to review of parental leave
Governance
On 1 September the new corporate criminal offence of failure to prevent fraud came into force. This is the most significant reform of corporate criminal law since the Bribery Act 2010, and it greatly increases the risk of corporate criminal liability for frauds which benefit an organisation or an organisation’s clients. From 18 November 2025 ECCTA also required all directors and persons of significant control to verify their identity with Companies House.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) published important updates on their proposals around diversity and inclusion and non-financial misconduct. Both regulatory bodies no longer intend to implement proposed rules on diversity and inclusion. An increased level of scrutiny of managers under the FCA’s new conduct rules came into force from 1 September 2026. Serious bullying and harassment in financial firms will amount to a breach of the regulatory code of conduct.
The FTSE Women Leaders Review found continued progress, reporting that women now represent 43.4% of boards in the FTSE 350, up from 42.1% in 2023. The report noted the huge shift in gender balance since the work of the review started in 2011 when only 9.5% of FTSE 350 board members were women
The UK’s Parker review, which encourages senior ethnic diversity, issued its latest report on its tenth anniversary. In the FTSE 100, the Parker review found that 95% of boards included ethnic minority directors by end 2024. Down just 1% from 2023, but a significant increase from 2016 when only 47 FTSE 100 companies had a director from a minority ethnic group.
2026
• FTSE Women Leaders Review and Parker Review will report for 2026
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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