The 2025 Employment Agenda

Let’s start with the Employment Rights Bill:

As we reported in our earlier updates on 16 October 2024 and 6 December 2024, the Government is proposing to make significant changes to employment rights including:

• making unfair dismissal a day one right;
• extending rights for working parents and pregnant workers;
• tackling zero hours contracts;
• changes to flexible working;
• reducing circumstances where an employer can “fire and re-hire”;
• changing how trade unions work and the requirements for industrial action;
• changing the rules on collective redundancy consultation;
• introducing a new single enforcement body;
• introducing mandatory pay gap reporting;
• simplifying worker status; and
• increasing time limits to bring claims in an employment tribunal.

As further consultation and legislation is required to enact the proposals, the Government has proposed that most of the changes won’t take effect until 2026 so for now employers should keep up to date and start the very significant planning that will be required in order to comply with those changes when they come into force.

Key changes in 2025:

Here’s our round up of the key issues that we know will affect employment law in 2025:

6 January 2025 – New Employment Tribunal Procedure Rules 2024 and new Practice Directions

The old (2013) Tribunal Procedure Rules have been replaced – most of the rules are the same but there are two new rules giving the tribunal greater flexibility to delegate to legal officers and giving the Presidents of the Tribunals (instead of the Secretary of State) the power to prescribe claim and response forms by Practice Directions.  New Practice Directions from the two Tribunal Presidents are expected in February/March 2025 and, amongst other things, these will preclude respondents from submitting ET3 responses by email, except in limited circumstances.

20 January 2025 – Increased awards for dismissal and re-engagement (fire and re-hire) where the employer fails to comply with the Statutory Code of Practice on Dismissal and Re-engagement

Employment Tribunals now have the power to increase or reduce any protective award (for failure to inform/consult employee representatives when proposing to make 20 or more redundancies) by up to 25% for any unreasonable failure to comply with the Statutory Code of Practice on Dismissal and Re-engagement (‘the Code of Practice’).  The Code of Practice was introduced on 18 June 2024 and the main purpose of it is to ensure that employers engage in meaningful consultation and take all reasonable steps to explore alternatives to dismissal. If you are planning to make 20 or more redundancies, please familiarise yourself with the Code of Practice.  Note that it is currently proposed that this area of law will be heavily revised, with the scope for fire and rehire severely limited, by new provisions in the Employment Rights Bill.

1 February 2025 – Employment Appeal Tribunal (Amendment) Rules 2024 and new EAT Practice Direction

Legally represented parties will need to use the CE-file (online portal) for the management of EAT claims from 1 February 2025.

1 April 2025 – National Minimum Wage and National Living Wage

Following the recommendations of the Low Pay Commission, the Government has confirmed the following significant rate increases this year:

This means that an employee aged 21 or over who works full time (37.5 hours per week) would earn just short of £24,000 per year. Please make sure you are paying all staff the above rates, as a minimum, from 1 April 2025.

6 April 2025 – Neonatal Leave and Pay

The new right to 12 weeks’ leave and pay (in addition to existing leave entitlements for parents) will be introduced on 6 April 2025.  This right will be available to employees with parental or other personal relationship to a baby born on or after 6 April 2025 who (a) requires neonatal care up to 28 days old and (b) who has a continuous stay in hospital of seven full days or more.  As with other types of statutory pay, there is a continuity of service requirement and minimum earnings threshold in order to be eligible for Statutory Neonatal Pay.  This new right will be accompanied by two additional new rights: (1) the right not to suffer a detriment and (2) the right not to be dismissed for taking or seeking to take neonatal leave.   Further regulations are expected to set out the new right in more detail.  We recommend that you review and update your family-related policies and procedures to take account of these changes.

April 2025 – Increase to statutory payments and Vento bands

As in previous years, it is expected that the rate of statutory payments (such as statutory sick pay and statutory maternity pay) will increase and the new statutory rates can be found here.  It’s also likely that the Presidents of the Employment Tribunals will increase in the Vento bands for compensation for injury to feelings in discrimination cases although we are currently waiting for the new bands to be announced. Please make sure you are paying the correct rates of statutory pay from April 2025.

1 September 2025 – failure to prevent fraud offence

Where an employee, agent, subsidiary or other associated person commits a fraud intending to benefit a large organisation/employer, the organisation may be held criminally liable for that fraud from 1 September 2025.  Large organisations should consider what fraud prevention measures are in place within their organisations, usually by carrying out a risk assessment, and whether those measures can be strengthened.

We’re also expecting:

1. The Draft Equality (Race and Disability) Bill to be published this year. The Bill is intended to simplify the process for equal pay claims and will likely mandate that organisations with over 250 employees will need to report on ethnicity and disability pay gap reporting.
2. A new Statutory Code of Practice for the right to switch off which will encourage good practice and improve workers’ work-life balance.

Please get in touch if you need to speak to us about any of these issues or if you would like us review your family-related policies to take account of the new right to Neonatal Leave and Pay.

Employment Law Now: Live

As well as covering recent changes, we will also be discussing the Employment Rights Bill in detail at our next Employment Law Now Live events in:

• London – Thursday 27 March 2025
• Peterborough – Tuesday 1 April 2025
• Cambridge – Thursday 3 April 2025

To secure your free place at Employment Law Now Live click here and complete our registration form.