
The national minimum wage rates will increase to:
Employers will need to review their current wage structure and adjust wages for any employees earning below the new minimum thresholds to ensure compliance. For more details on the statutory rates applicable from April 2025, download our Statutory Leave and Pay guide here.
The rate of employer national insurance contributions (NICs) will rise to 15% while the threshold for employer liability will reduce to £5,000. For more information on changes introduced as part of the Autumn 2024 Budget, please refer to our article linked here.
Employers will need to assess the financial impact of this change on their workforce and plan for increased costs per employee.
The Neonatal Care (Leave and Pay) grants parents with children in neonatal care with a day-one right to take 12 weeks of paid leave in addition to statutory family-related leave.
Employers must review their current family-friendly policies to incorporate this new leave provision and update policy documentation and procedures accordingly.
The Employment Rights Bill introduced by the Labour Government, proposes significant changes to the employment legislation landscape. Throughout 2025 and into 2026, consultations will occur, with the changes set to take effect progressively from 2026 onwards. Below, we’ve outlined some of the most impactful reforms to help you stay ahead of the curve.
Significant legislative updates on harassment came into effect on 26 October 2024, however, the Employment Rights Bill proposes enhanced protections against third-party harassment. Employers will be required to take all reasonable steps to prevent sexual harassment of employees. Taking steps now to ensure all reasonable measures are already in place will lessen the burden of further changes down the line.
Employers must revisit current measures to ensure they meet the enhanced requirements, mitigating the risk of non-compliance.
Currently, the qualifying period for an employee to bring an unfair dismissal claim is two years. The Employment Rights Bill proposes removing this qualifying period, allowing claims from day one. However, an “initial period of employment” may act as a probationary period, during which employers can dismiss unsuitable employees through a simplified process.
Employers should review their current onboarding, probationary and dismissal processes to ensure readiness for these changes. Depending on the organisation, additional training for managers on e performance management may also be appropriate to consider, alongside formalising processes in policy documentation.
Recent changes made flexible working a day one right. The Employment Rights Bill builds on this by ensuring employers can only refuse flexible working requests on reasonable grounds. In case of a refusal, employers will be required to state the reasons as to why they consider these reasonable.
Flexible working processes and documentation must be reviewed to ensure that refusals are well-documented, justified, and align with the new requirements.
The Employment Rights Bill proposes changes to unfair dismissal criteria. If the main reason for dismissal is an employee’s refusal to agree to a variation, or to enable the employer to re-engage the employee/another person under varied terms and conditions for the same duties, the dismissal will be deemed automatically unfair.
If employers can provide evidence that the variation was essential and unavoidable due to financial difficulties, this would be seen as a mitigating factor.
Strategic workforce planning will be essential to reduce reliance on fire-and-rehire practices which were previously considered a solution by organisations. Additionally, should dismissal and re-engagement be the only option, employers must follow a robust consultation process formalised in policy documentation.
The Government is proposing making paternity and unpaid ordinary parental leave available from day one of employment. Additionally, restrictions on taking paternity leave after shared parental leave will be removed.
Employers will need to review their HR and payroll processes ahead of these changes and amend any policy documentation accordingly.
Proposed changes include making SSP available to all workers and removing the three-day waiting period to be entitled to SSP.
HR and payroll processes should be reviewed to accommodate these changes. Employers must assess the financial impact and adjust sickness absence policies accordingly.
The Employment Rights Bill introduces a statutory right to bereavement leave, likely as unpaid leave, allowing employees time off to grieve the loss of loved ones.
Employers will need to consider their overall approach towards compassionate and bereavement leave in addition to ensuring policy documentation is updated.
The Employment Rights Bill proposes to amend the point at which collective consultation will be required by revising the consultations which are taken into consideration. Collective consultation will be triggered where 20 or more redundancies are proposed across the whole organisation, which includes instances in which redundancies take place at different sites or in unrelated branches of an organisation. At present, the threshold is only applicable to one site/branch of an organisation.
Employers will need to carefully consider the implications of this shift for their redundancy processes and policy in place.
Our outsourced HR Consultancy team is here to help you navigate the evolving employment legislation landscape. We’ll ensure your organisation is compliant and positioned to benefit from these updates, giving you peace of mind.
Get in touch with our HR Consultancy team today to learn more about how these changes may affect your organisation.