UK Finance Firms Brace for FCA Rules by Sept. 1 as ERA 2025 Expands Dismissal Risk
Updated
Updated · Law and the Workplace · Jul 10
UK Finance Firms Brace for FCA Rules by Sept. 1 as ERA 2025 Expands Dismissal Risk
3 articles · Updated · Law and the Workplace · Jul 10
Summary
Less than two months before the FCA’s non-financial misconduct framework starts on Sept. 1, UK financial services firms are being urged to run gap analyses across policies, training, governance and escalation procedures.
The immediate pressure comes from overlapping reforms: FCA guidance will govern how firms handle serious workplace misconduct, while the Employment Rights Act 2025 phases in broader employment-law changes through 2026 and 2027.
From Jan. 1, 2027, unfair-dismissal protection will start after six months instead of two years, and the current compensation cap of £123,543 will be removed, raising exposure for disputes involving senior and high-earning staff.
October 2026 will also lift the sexual-harassment duty to an “all reasonable steps” standard, including third-party conduct, while whistleblowing rules already cover sexual-harassment allegations as protected disclosures.
The combined changes force HR, legal and compliance teams to coordinate decisions on misconduct, references, fitness assessments and contract terms, especially as new limits on confidentiality clauses and fire-and-rehire practices arrive in 2027.