Happy Christmas. It’s clear what legislators and regulators wanted to get over the line before the break. This week brought a newly minted Employment Rights Act, a reshaped EU ESG regime, and early signs that AI product design is now fair game for competition enforcement. Consider this edition a calm scan of what changed just before the lights went off, and what will still matter when everyone’s back in January.
— Philip
BRIEFING ROOM
Employment law just got tougher in the UK
ChatGPT
In the background of tomorrow’s King’s Speech, look out for a freshly inked copy of the long-awaited Employment Rights Act 2025. The Bill, one of the government’s flagship reforms, took more than fourteen months to pass through Parliament; an unusually long journey reflecting sustained political pressure, heavy Lords scrutiny, and detailed technical negotiation.
Receiving Royal Assent on Thursday, the Act:
upgrades employee protection from unfair dismissal to apply from six months, rather than the current two years. Earlier drafts had warned of cover from day one.
Removes the cap on compensation for unfair dismissal (previously one year’s salary, capped at £118k), materially boosting leverage for employees, especially those in higher-paid roles.
Doubles the maximum “protective award” for failing to collectively consult on redundancies, from 90 to 180 days’ gross pay per affected employee.
Extends the time limit for bringing Employment Tribunal claims to six months, up from three.
🔴 Hardening T&Cs. The Act restricts employers’ ability to update employment terms through “fire and rehire” and “fire and replace” strategies (the latter referring to replacing employees with independent contractors). While changes will continue to be assessed under unfair dismissal principles, changes to pay, working hours, pensions, shift patterns, and time off are now deemed automatically unfair.
🟠 There’s more. The Act provides a new right to bereavement leave following pregnancy loss and voids certain NDAs that seek to prevent disclosure of harassment or discrimination allegations.
Our take
🎉 Alongside being an unwelcome addition to your HR team’s post-festive party backlog, this is a genuine moment to brief your CPO with real commercial consequences.
Build flexibility in terms while you still can. Some employers are considering shortening probation periods to allow for dismissal within the initial six months.
The risk profile of restructurings just stepped up. Recap with HR the basics of what is and isn’t a valid consultation.
With extended windows both to file a tribunal claim and to engage ACAS Early Conciliation, employers may not see claims land until nine months after the relevant events.
Commentary is unsurprisingly rich. Some question the impact on an already overstretched Employment Tribunal system (Collyer Bristow), while others suggest that the new NDA restrictions may not ultimately bite on settlement agreements where employees have received independent legal advice (DLA Piper).
What’s next
📆 Most provisions require implementing regulations, so expect the detail to unfold well into 2026, and in some cases up to 1 January 2027. Alongside the government’s consultation on reforming non-compete clauses (launched last month), employment law is firmly back on the GC risk register for the year ahead.
RISK RADAR
Simplification, not salvation. On Tuesday, the EU Parliament approved its first “Omnibus” simplification package, signing off on substantial amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Applicable thresholds for who is in-scope are up; exemptions are widened; focus of required reports is narrowed; penalties are reduced; implementation is delayed. The European Coalition for Corporate Justice decried the “deeply troubling message” of a “deregulation agenda”.
Why it matters: For in-house teams, the takeaway is more nuanced than relief or outrage. The compliance burden is shifting, not disappearing. National transposition, investor expectations, and value-chain pressure will now matter more than the black-letter EU text alone. Now, if only they could simplify the acronyms too (More detail - Latham)
🤖 Gemini, meet DG-COMP. The European Commission has opened separate abuse of dominance investigations into Google and Meta over how they are integrating generative AI assistants into existing platforms. Brussels is concerned that Google is incorporating publisher and creator content into AI summaries without compensation or a meaningful ability to opt out. It is also sounding the alarm that Meta may be foreclosing competition by restricting third-party AI access to its WhatsApp Business Solution, while keeping its own assistant embedded. Both cases centre on Article 102 theories of unfair trading conditions and self-preferencing.
Why it matters: This is the clearest sign yet that AI product design choices are becoming competition-law decisions. If regulators succeed, default settings, data sourcing, opt-outs, and distribution channels for AI features will all attract scrutiny. The cases also suggest that classic antitrust tools, not just the DMA, will shape how AI assistants are commercialised in Europe. That has knock-on effects for anyone building, buying, or relying on AI tools embedded in dominant platforms.
🧑🎄 UK makes the good list. The European Commission renewed the UK’s data adequacy decisions, confirming that personal data can continue to flow freely from the EU/EEA to the UK until December 2031 following its review of the UK’s Data (Use and Access) Act 2025.
Why it matters: “Adequate” rarely sounds exciting, but here it means no new transfer mechanics, no scramble, and one less regulatory headache heading into 2026.
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ABOUT THE EDITOR
I work with start-ups and scale-ups as a fractional GC, covering commercial, regulatory and AI governance. Fixed days per month, fixed fee. Typical work includes contract strategy, regulatory triage, and board-level risk decisions.
- Philip
Too much legal content is dull and jargon-filled. Profiles in Legal is for lawyers who want to think clearly, sound credible in the room and get promoted.
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