A revised version of the government’s economic analysis for the Employment Rights Act 2025 has been produced after various concessions from ministers, including the hard-fought change to the original plan to introduce day one unfair dismissal rights.

Now the government has slashed the annual costs for business to £1bn a year from the original 2024 analysis which said the new rules would add £5bn annually in compliance costs.  

The overall cost to business has plummeted as the measures are being phased in over three years, instead of in one fell swoop, but business leaders warn that the real costs will be much higher once the full 28 measures are in place.