2025 is set to be a busy year on the employment law front. The Employment Rights Bill is currently making its way through Parliament and is expected to receive Royal Assent later this year.
Below is an overview of what’s coming up:
January
New power for Tribunals to adjust compensation in protective award claims
The statutory Code of Practice on Dismissal and Re-engagement came into force on 18 July 2024.
Whilst there is no stand-alone claim for breach of its provisions, it must be taken into account by employment tribunals in relevant cases including unfair dismissal. If an employer unreasonably fails to follow the Code, a tribunal can uplift compensation by up to 25%. To date there hasn’t been a way to apply this to protective award claims - until now. From 20 January 2025, a new order will amend the Trade Union and Labour Relations (Consolidation) Act 1992, giving tribunals the power to adjust compensation in these cases.
April
New minimum wage rates
From 1 April 2025, the National Living Wage (NLW) will go up from £11.44 to £12.21. Meanwhile, the rate for 18 to 20-year-olds will see a significant boost, jumping by 16.3% from £8.60 to £10. The rates for under-18s and apprentices will also rise, from £6.40 to £7.55.
The government’s long-term goal is to have a single adult rate, so we can expect to see further changes on this.
Neonatal care leave and pay
The Neonatal Care (Leave and Pay) Act 2023 is expected to come into force in April 2025 and this will enable parents with babies needing specialist care after birth will soon be entitled to up to 12 weeks of paid leave, in addition to existing maternity and paternity leave.
Parents will qualify for neonatal care leave from day one of their employment if their baby is admitted to hospital within the first 28 days of birth and stays for at least seven full days. The leave can be taken for up to 12 weeks. Those with at least 26 weeks' continuous service will also qualify for statutory pay during this leave period, and they’ll have the same employment protections as those associated with other forms of family related leave, including protection from dismissal or detriment as a result of having taken leave.
Paternity bereavement leave
The Paternity Leave (Bereavement) Act 2024 will allow bereaved fathers and partners to take leave following the death of a child’s mother or adoptive parent, regardless of how long they’ve been employed. This also covers a bereaved parent of an adopted child or a child born through a surrogacy arrangement, adopted children or those born through surrogacy arrangements.
Although it hasn’t been confirmed yet, the amount of paternity leave available could increase to 52 weeks.
The previous government aimed to bring this in by April 2025, but it’s unclear whether the new government will stick to that timeline.
Other changes on the horizon
Trade union reforms
The Employment Rights Bill includes several significant changes to trade union laws. One of the first things on the agenda is repealing the Strikes (Minimum Service Levels) Act 2023. Once the Bill receives Royal Assent, this will happen automatically. As a reminder, this legislation was introduced by the previous Conservative government to enable employers to require a minimum level of service to be provided during a strike in certain public services.
Two months after the Bill becomes an Act, more reforms will follow, including changes to turnout and support thresholds for ballots and the provision of information in relation to these ballots. Going forward, a simple majority of those voting will be enough to approve strike action, with no minimum turnout required.
The publication of the Equality (Race and Disability) Bill
The government has committed to publishing this Bill in draft form for pre-legislative scrutiny sometime during this Parliamentary session. This Bill is expected to include several measures aimed at tackling pay gaps and discrimination, such as:
- Extending equal pay gap reporting to cover ethnicity and disability for employers with more than 250 staff and measures on equal pay.
- Extending equal pay rights to protect workers suffering discrimination based on race or disability.
- Ensuring that outsourcing of services can no longer be used by employers to avoid paying equal pay.
- Implementing a regulatory and enforcement unit for equal pay with involvement from trade unions.
Looking ahead to 2026
While 2025 will see some change, some of the biggest changes won’t come into effect until 2026. Many of the key provisions in the Employment Rights Bill will require extensive consultation (expected this year) before they’re implemented. Here’s a quick reminder of what’s coming up:
- A day one right not to be unfairly dismissed;
- A right for zero hours workers to be offered guaranteed hours and given reasonable notice of shifts and their cancellation or curtailment;
- A day one right to request flexible working;
- Restrictions on the practice of "fire and rehire";
- Reforms to collective consultation rights;
- Employer liability for third party harassment and stronger obligations on employers to prevent sexual harassment; and
- Trade union reforms, including a right of access to workplaces and a statement of trade union rights.
We have written about the more significant changes in detail and these articles can be found on our HR law Hub.
We're clearly heading into a period of significant change in employment law. Keeping up with these developments will be essential if employers want to keep on top of changes, avoid any pitfalls and stay compliant.
