2025 is shaping up to be another busy year for developments in UK employment law. The most notable being the Labour government’s Employment Rights Bill 2025 (ERB) - a “once-in-a-generation” overhaul of workers’ rights.
While the exact composition of the Act is still to be determined, read on for a round-up of the most significant changes likely to impact your organisation and its employees.
Employment Rights Bill 2025
The ERB was published on 10 October 2024 and contains 28 specific reforms.
The key changes where consultations are expected this year are:
- Collective redundancies. Currently, employers are under a duty to consult collectively where they are proposing 20 or more redundancies “at one establishment” within a period of 90 days or less. The ERB’s removal of “at one establishment” will mean a significant change for employers with multiple sites across the UK.
- Zero hours contracts. The ERB proposes that those on zero hours or low hours contracts who regularly work more than these hours will have the right to a guaranteed hours contract, reflecting the hours they regularly work over a 12-week reference period. This will give workers a chance to update their contracts to mirror their actual working hours.
- Unfair dismissal. The ERB proposes that protection from unfair dismissal will kick in from day one opposed to after a two-year qualification period. There will be an initial period of employment (nine months) during which a “lighter touch process” will apply.
- Restrictions on “fire and rehire”. Under the ERB, it will be automatically deemed unfair to dismiss an employee for the following reasons: (1) if an employer sought to vary the contract without the employee’s consent, or (2) if an employer re-engages an employee or hires someone else under a new contract to perform substantially the same duties.
- Harassment. As well as the new duty on employers to take all reasonable steps to prevent sexual harassment (in effect from October 2024), the ERB will introduce third party liability on employers.
The ERB also introduces a variety of other “day one” rights, including an extended right to statutory sick pay, unpaid parental leave and paternity leave, a new statutory right to paid bereavement leave, and enhanced maternity protection. In addition, a new flexible policy has been proposed whereby employers can only refuse requests for flexible working is they have a “reasonable” basis to do so.
National Living Wage
On 1 April, the National Living Wage will rise 6.7%, from £11.44 to £12.21 per hour for all workers aged 21 and over.
The Government also intends to close the gap between the 18–20-year-old rate and the main National Living Wage rate, to create a single rate applying to all adults other than apprentices. This is reflected in a 16.3% increase from £8.60 to £10.00.
Neonatal Care (Leave and Pay) Act 2023
From 6 April 2025, parents will have a right to 12 weeks’ leave and pay when heir baby requires neonatal care, in addition to existing parental leave entitlements.
Summary
Please note that this is merely an overview of a rapidly evolving space, which is prone to change.
For a more comprehensive exploration of the changing landscape of UK employment law and to mitigate risk to your company we are now taking bookings for our Employment Law UK Update – a half-day, in-person course running on 1 May 2025. To find out more or book onto this course please call +44 (0)20 7549 2549 or email info@bondsolon.com.