Just before the Christmas break, the Employment Rights Bill finally received royal assent and is now a fully-fledged act of Parliament, the Employment Rights Act 2025 (ERA). The ERA introduces a number of significant developments in UK employment law and will require employers to take proactive steps to ensure they are prepared for the new regime.
The changes under the ERA will be relevant to your organisation as an employer, and to you in your capacity as insolvency practitioners (IPs) where there are employees that need to be dealt with as part of the insolvency process. This newsletter also contains useful updates for IPs generally on employment related issues that are relevant to managing insolvencies.
Impact of the ERA
Our Labour & Employment team have produced a raft of helpful alerts, including:
The principal provisions due to take effect in April 2026 will require updates to existing policies and procedures rather than wholesale changes to operational processes. However, there are more substantial developments on the horizon, including a reduction in the qualifying period for unfair dismissal claims from two years to six months (meaning employees will be able to bring claims after six months’ service) as well as the removal of the statutory cap on unfair dismissal compensation (currently capped at £118,223 or 52 weeks’ pay, whichever is lower).
From an insolvency perspective, these developments will also need to be factored into contingency planning and the management of employees following appointment. Last year, we produced a tailored guide addressing the impact of the ERA on insolvency practitioners and restructuring, which has now been updated to reflect the provisions that are already in force or due to come into effect.
Employment and Insolvency Law
We have also recently published a couple of blogs examining:
When and Why should an Officeholder Consent to Employee Claims?
The impact of TUPE where a provisional liquidator is appointed
As this is an employment law special, we thought it also helpful to remind IPs that HR1 forms must now be submitted digitally.
If you would like to discuss the implications of the ERA for your organisation more generally, or in your capacity as a practitioner, please do not hesitate to contact a member of the team, who will be able to discuss the position in more detail or introduce you to one of our specialist employment lawyers.
