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Summary of Employment Law Changes to Expect in 2025

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It’s that time of the year again, when we look at a summary of the employment law changes to expect in 2025. 2024 greatly shook the employment law sector with the introduction of the Employment Rights Bill 2024, which although is not officially in force yet, proposed some major changes to employment law and took most of the spotlight. Nonetheless, 2025 will also bring changes to the employment law sector.

This article will briefly summarise some of the main employment law changes we can expect in 2025, with links to previous articles that our Peace of Mind Team have written on new legislation and any upcoming employment law changes or proposals.

NATIONAL MINIMUM WAGE

Since 1st of April 2024 the National Minimum Wage rates are as following:

  • National Living Wage – £11.44
  • 18 to 20 years old – £8.60
  • Under 18 years old – £6.40
  • Apprentice – £6.40

On the 1st of April 2025 there will be an increase in the National Minimum Wage with the new rates of:

  • National Living Wage – £12.21
  • 18 to 20 years old – £10.00
  • Under 18 years old – £7.55
  • Apprentice – £7.55

The new rates will see an increase of 6.7% for National Living Wage, whereas 18 to 20 years old rates will increase by 16.3% and under 18 years old alongside apprentice rates will see an increase by 18%.

NATIONAL INSURANCE

Alongside announcement of increased National Minimum Wage, the Autumn 2024 Budget also announced changes to National Insurance. Subsequently, from April 2025 employer National Insurance contributions will increase from 13.8% to 15%. Additionally, employers should be aware of the secondary threshold being lowered to £5,000 from the current £9,100.

STATUTORY SICK PAY

The Employment Rights Bill 2024 (the Bill) proposes to change the entitlement to Statutory Sick Pay (SSP) to a ‘day one right’, enabling employees to claim SSP in their first day of illness rather than third as it is now. Additionally, the Bill also proposes to remove the earnings limit enabling those who earn less than £123 per week to also be eligible for SSP.

Although we are not 100% certain when this change will come into force, it is very likely that it will be introduced at some point in 2025.

NEONATAL CARE (LEAVE AND PAY) ACT 2023

The Neonatal Care (Leave and Pay) Act 2023 will introduce statutory paid leave for eligible employed parents whose newborn baby is admitted to neonatal care. Eligible employed parents will be entitled to receive 12 weeks paid leave, in addition to maternity leave and paternity, for instance.

Although the Legislation received Royal Assent on the 24th May 2023, it will come into force in April 2025.

THE EMPLOYMENT RIGHTS BILL 2024 – CONSULTATIONS

Although the Bill reforms will not come into force until 2026, we already know that consultations will take place in 2025. Currently the Bill proposes to change:

  • TRADE UNION – The Bill proposes to impose on employers a duty to provide employees with a written statement that they have the right to join a trade union. For new employees such notice will have to be provided alongside section 1 statement of conditions of employment. Furthermore, the Bill proposes to repeal the majority of the Trade Union Act 2016 and provide new right of access for trade unions to workplaces.
  • UNFAIR DISMISSAL – The Bill proposes to introduce the right for an employee to bring an unfair dismissal claim from the first day of their employment. In contrast, currently employees must be employed for at least two years’ before they can bring an unfair dismissal claim.
  • ZERO-HOURS CONTRACTS – The Bill proposes to amend zero-hour contracts, introducing a right to guaranteed hours which would reflect the hours regularly worked by an employee. An employer would be legally required to make an offer of guaranteed hours to their employee; however, an employee may choose to remain on zero-hour contract if they wish.

Currently workers do not have that guarantee.

  • FLEXIBLE WORKING – Although flexible working is already a day one right as per the Employment Relations (Flexible Working) Act 2023, the Bill proposes greater flexible working arrangements rights by requiring employers to agree to flexible working requests unless they can show that it is ‘unreasonable’. Additionally, an employer must state the ground for refusal and explain why it is reasonable to refuse the request on those grounds.
  • ENTITLEMENTS TO LEAVE – The Bill proposes removal of the requirement of the qualifying period of employment for paternity leave and ordinary parental leave. Currently, employees are required to have been employed by a Company for more than a year in order to be entitled to such leave. Therefore, under the Bill, employees will have a right to paternity leave and ordinary parental leave from day one of employment.

The Bill also focuses on bereavement leave, proposing for the leave to be a day one right. Additionally, the Bill also proposes to expand the bereavement leave to other employees, not only those who have lost a dependant under the age of 18 or experience stillbirth after 24 weeks of pregnancy, but to also cover different situations. This would result in two weeks’ bereavement leave to remain with regards to dependants, but one additional week for other situations, which are yet to be announced.

  • DISMISSAL DURING PREGNANCY AND FOLLOWING STATUTORY FAMILY LEAVE – Under the Bill, greater protection will be granted to pregnant employees extending their protection from dismissal. The same protection will apply to those returning from family leave and maternity leave. Currently, that protection only applies to redundancy situations and also has its limitations, as such employees cannot be dismissed but may be moved to an alternative vacancy if one is available. Under the new proposed changes, it will be unlawful to dismiss a pregnant employee or employee within six months of their return following statutory family leave and maternity leave.
  • FIRE AND REHIRE – The Bill proposes removal of Fire and Rehire practices. Currently, an employer can dismiss an employee and rehire them essentially for the same role under new terms of employment which could potentially be disadvantaged if an employee does not agree to new terms of employment for instance.

Under the new rules if an employer was going to fire an employee on the grounds of refusing to accept new term of employment, that would be automatically unfair dismissal. However, the Bill also foresees an exception to this rule of financial inability of the organisation.

Nonetheless, consultations which will take place in 2025 will verify whether the proposed changes in the Bill will remain intact.

As always, we will keep you informed of any significant updates in employment law throughout 2025. Once any changes come into force, our Peace of Mind Team can provide specific advice on the new protections and procedures in place. Additionally, our Document Audit Team can help you by drafting any relevant policies or amend existing employment documents. If you have questions about any of these upcoming changes, or have any other employment related questions, please contact our employment law team by emailing employment@warnergoodman.co.uk or by calling 023 8071 7717.