As we navigate through 2025, the UK's employment law landscape is undergoing significant transformations. Driven by the Labour government's agenda to enhance workers' rights, these changes aim to reshape workplace protections and promote fairness. This overview provides HR professionals with the latest updates and insights into what to expect in the coming months.
Recent changes in employment law
Employment Rights Bill
The Employment Rights Bill is a cornerstone of the Labour government's efforts to reform employment law. It introduces several key changes that are set to impact employers and employees alike:
Day One Unfair Dismissal Protection: Employees will gain the right to challenge unfair dismissal from the first day of employment, replacing the current two-year qualifying period. This change is anticipated to take effect in autumn 2026, allowing employers time to adjust their policies and procedures.
Restrictions on 'Fire and Rehire' Practices: The Bill seeks to make it automatically unfair to dismiss an employee for refusing changes to their terms unless the employer can demonstrate financial necessity or that the change could not be reasonably avoided.
Statutory pay increases (effective 6 April 2025)
From 6 April 2025, the following statutory pay rates apply:
Statutory Sick Pay (SSP): £118.75 per week.
Statutory Maternity, Paternity, Adoption, Shared Parental, and Parental Bereavement Pay: £187.18 per week.
Lower Earnings Limit: Increased to £125 per week to qualify for these payments.
National Minimum Wage and National Living Wage (effective 1 April 2025)
Significant changes to the National Minimum Wage (NMW) and National Living Wage (NLW) have been implemented:
National Living Wage (21 and over): £12.21 per hour.
Ages 18–20: £10.00 per hour.
Under 18s and Apprentices: £7.55 per hour.
Neonatal Care Leave and Pay (effective 6 April 2025)
The Neonatal Care (Leave and Pay) Act 2023 has come into force, granting eligible employees up to 12 weeks of paid leave if their child is admitted to neonatal care. This entitlement is in addition to existing parental leave rights and applies to parents of babies born on or after 6 April 2025.
Upcoming changes and consultations
Equality (Race and Disability) Bill
The government has initiated a consultation to introduce mandatory ethnicity and disability pay gap reporting for large employers (those with 250 or more employees). This consultation is open until 10 June 2025 and aims to inform the forthcoming Equality (Race and Disability) Bill.
Flexible Working Reforms
Proposed changes under the Employment Rights Bill will require employers to provide specific, reasonable grounds when refusing flexible working requests. These reforms aim to make flexible working more accessible and equitable for all employees.
Corporate Crime and Fraud Prevention (effective 1 September 2025)
Under the Economic Crime and Corporate Transparency Act 2023, a new corporate offence of failing to prevent fraud will come into force on 1 September 2025. Large employers will be held liable if they fail to take reasonable steps to prevent fraud by their employees or associates.
Practical steps for HR teams
1. Review and update policies
Ensure all employment policies and contracts reflect the latest statutory rates, benefits, and leave entitlements. Prepare for upcoming changes by staying informed about legislative developments.
2. Training and awareness
Educate management and staff on new legal requirements, including flexible working rights and parental leave entitlements, to ensure compliance and foster a supportive workplace culture.
3. Engage with consultations
Participate in government consultations, such as those for the Equality (Race and Disability) Bill, to contribute to the shaping of future employment laws.
4. Seek legal advice
Given the complexity of the evolving legal landscape, consult with legal experts to navigate changes effectively and ensure full compliance.
The year 2025 marks a pivotal moment in the evolution of UK employment law. With significant changes already in effect and more on the horizon, HR professionals must stay informed and proactive to navigate the complexities of the new legal environment. By understanding the latest updates and preparing for future developments, employers can ensure compliance and foster a supportive workplace for their employees.
This article was created with insights from Lex HR - your always-on HR legal assistant. Lex HR helps HR professionals navigate complex employment law with confidence, providing real-time, reliable advice tailored to your needs. Try it free today and see how much easier compliance can be.
