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Navigating UK employment law: Upcoming changes employers need to know 2025

Staying updated with changes in UK employment law is essential for employers to avoid significant risk. With new regulations on the horizon, it’s critical to understand their implications for your organisation. What do these changes mean for you, and how can you prepare? 

Following the significant changes in employment legislation we have recently seen, more reforms are expected to further enhance worker protection and reshape employer responsibilities. While many of these changes are not anticipated until 2026, taking proactive steps now to assess and prepare your HR function can help your organisation evaluate potential impacts, ensure compliance and remain competitive in the labour market.  

Before we explore the changes expected in 2026 and beyond, note that April 2025 will mark the implementation of key updates, including increased national minimum wage rates, adjusted national insurance contributions, and the introduction of neonatal care leave and pay. Here’s what you need to know. 

About the author

Luisa Steidele

+44 (0)20 7710 3312
steidelel@buzzacott.co.uk

Following the significant changes in employment legislation we have recently seen, more reforms are expected to further enhance worker protection and reshape employer responsibilities. While many of these changes are not anticipated until 2026, taking proactive steps now to assess and prepare your HR function can help your organisation evaluate potential impacts, ensure compliance and remain competitive in the labour market.  

Before we explore the changes expected in 2026 and beyond, note that April 2025 will mark the implementation of key updates, including increased national minimum wage rates, adjusted national insurance contributions, and the introduction of neonatal care leave and pay. Here’s what you need to know. 

National Minimum Wage

The national minimum wage rates will increase to: 

  • £12.21 per hour for workers aged 21 and over 
  • £10.00 per hour for workers aged 18 to 20 
  • £7.55 per hour for workers aged 16 to 17 and apprentices 

Implications for employers

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. 

National Insurance

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. 

Implications for employers 

Employers will need to assess the financial impact of this change on their workforce and plan for increased costs per employee. 

Neonatal Care Leave & Pay

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.  

Implications for employers 

Employers must review their current family-friendly policies to incorporate this new leave provision and update policy documentation and procedures accordingly. 

Changes on the Horizon for 2026 

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.

Further changes to harassment prevention

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.  

Implications for employers 

Employers must revisit current measures to ensure they meet the enhanced requirements, mitigating the risk of non-compliance.  

Removal of qualifying period for unfair dismissal claims

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. 

Implications for employers 

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. 

Reform of the right to request flexible working

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.  

Implications for employers 

Flexible working processes and documentation must be reviewed to ensure that refusals are well-documented, justified, and align with the new requirements. 

Reform of rules on dismissal and re-engagement

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.  

Implications for employers 

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.  

Removal of qualifying periods for statutory paternity leave and ordinary parental leave

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. 

Implications for employers 

Employers will need to review their HR and payroll processes ahead of these changes and amend any policy documentation accordingly.  

Strengthening Statutory Sick Pay (SSP)

Proposed changes include making SSP available to all workers and removing the three-day waiting period to be entitled to SSP. 

Implications for employers 

HR and payroll processes should be reviewed to accommodate these changes. Employers must assess the financial impact and adjust sickness absence policies accordingly.  

Statutory bereavement leave

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.  

Implications for employers

Employers will need to consider their overall approach towards compassionate and bereavement leave in addition to ensuring policy documentation is updated.  

Redundancy process

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.  

Implications for employers 

Employers will need to carefully consider the implications of this shift for their redundancy processes and policy in place.

Let us help you stay ahead  

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. 

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