THE BOTTOM LINE
- Audit Your AI: Your use of algorithms in hiring and firing now carries significant legal risk. The Act mandates human oversight for any AI-driven dismissal, requiring a review of your HR technology and processes.
- Rethink Casual Contracts: A new right to predictable work means you will face legal pressure to offer stable contracts to zero-hours or agency staff after 26 weeks, potentially increasing headcount and payroll costs.
- Flexible Working is the New Default: The grounds for refusing a flexible working request have been significantly narrowed. Your business will need more compelling, evidence-based reasons to deny requests or risk facing employment tribunals.
THE DETAILS
The Employment Rights Act 2025, which has now received Royal Assent, introduces some of the most significant changes to UK workplace law in a decade. The central theme is a rebalancing of power to address modern working practices, from the gig economy to the use of artificial intelligence in management. For business leaders and their legal counsel, the key takeaway is that old contracts and legacy HR policies are no longer sufficient.
The most impactful provision is arguably the new right to human review for any significant employment decision made by an automated system, including termination. This is a direct response to the proliferation of AI-driven performance management tools and aims to provide a safeguard against “computer says no” dismissals.
Secondly, the Act tackles precarious work head-on by creating a new statutory right for workers with variable hours to request a predictable working pattern. After 26 weeks of service, a worker can request a contract that reflects their regular hours worked over the preceding period. While it remains a right to request, the Act places a much higher burden on employers to refuse, similar to the flexible working regime. This change is designed to provide greater stability for gig economy workers and those on zero-hours contracts, forcing businesses to more formally assess and justify their reliance on a flexible workforce.
Finally, the government has strengthened the existing framework for flexible working. Building on the recent move to a “day one” right to request, the 2025 Act reduces the number of statutory business reasons an employer can use to lawfully refuse a request. For example, vague justifications citing a “detrimental impact on quality” will now require substantial, data-led evidence. This change effectively moves the needle from flexible working being an employee request to being a near-standard operational model that employers must proactively accommodate unless there is a truly prohibitive reason not to.
SOURCE
Source: legislation.gov.uk
