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National Law Review
National Law Review
7/10/2026
Employment Law & Regulatory Reform: How Financial Services Firms Can Prepare for Change

Employment Law & Regulatory Reform: How Financial Services Firms Can Prepare for Change

Short summary

The UK Employment Rights Act 2025 and FCA non-financial misconduct guidance create a dual regulatory risk landscape for financial services firms, with staggered implementation through 2027. Key changes include reducing the unfair dismissal qualifying period from two years to six months, removing the compensation cap, and raising the sexual harassment prevention standard to 'all reasonable steps.' Firms should begin coordinated preparation across HR, legal, and compliance now.

  • •ERA 2025 cuts unfair dismissal qualifying period to 6 months and removes compensation cap from Jan 2027
  • •FCA non-financial misconduct framework takes effect Sept 2026 with new anti-harassment rule
  • •Firms must update probation, performance management, whistleblowing, and harassment prevention frameworks

Generated with AI, which can make mistakes.

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