Last year, the continued cost-of-living crisis, global conflicts and UK change of government dominated the headlines and added to the challenges faced by UK businesses. So, what does 2025 have in store for employers, in the employment law arena at least?

2025 predictions: what’s on the horizon for employment law 

Last year, the continued cost-of-living crisis, global conflicts and UK change of government dominated the headlines and added to the challenges faced by UK businesses. So, what does 2025 have in store for employers, in the employment law arena at least?

Changes under the Employment Rights Bill

Following the Labour Party’s success in the general election last year, it has proposed wide-ranging reform to employment law under the Employment Rights Bill.
The Bill is currently passing through parliament and several amendments have already been proposed to the original draft of the Bill. Although changes need to be made to the Bill, it is likely to receive Royal Assent by Summer 2025. However, the majority of the provisions under the Bill will require implementing regulations or codes of practice to bring them into force, and these will require a consultation process before being finalised. As a result, it is likely that the more significant provisions of the Bill will not take effect until 2026.
However, what we will see in 2025 are consultations on those key provisions, including:

• making unfair dismissal a day one right and the introduction of a statutory probation period
• removal of the one establishment requirement for collective consultation
• increased protection against dismissal for pregnant women and those returning from maternity leave
• restriction on an employer’s ability to dismiss and re-engage except where there is genuinely no alternative. This will be accompanied by a replacement or strengthening of the statutory Code of Practice on Dismissal and Re-engagement
• the new right for zero hours and low hours workers to be offered guaranteed hours and reasonable notice of changes to shifts along with compensation for shifts that are cancelled or ended early
• extension of the preventative duty so that employers are required to take all reasonable steps to prevent sexual harassment of employees
• changes to statutory sick pay including making it available from day one and removing the lower earnings limit
• introduction of a new statutory right to bereavement leave
• increasing the time limit for bringing claims in the employment tribunal
• changes to the flexible working regime
• changes in relation to trade unions including repeal of the minimum service levels legislation, introducing a requirement on employers to give workers a written statement (alongside the section 1 statement) advising of their right to join a trade union, providing for access agreements to allow unions the right of access to workplaces, amendments to make the statutory recognition process easier and amendments to the statutory ballot process
• creation of a new single enforcement body.

The government has also pledged to review the parental leave system by July 2025.

Neonatal care leave and pay

Under the previous government, the Neonatal Care (Leave and Pay) Act 2023 received Royal Assent, creating a right to statutory neonatal care leave (expected to be capped at 12 weeks) and pay for employees. It was expected to come into force from April 2025. However, for the provisions of the Act to come into force, implementing regulations need to be made and, as yet, the current government has not published any draft regulations. It remains to be seen whether these can be published in time or whether the date for these provisions to come into force will be delayed. 

National Minimum Wage (NMW) and National Living Wage (NLW)

From 1 April 2025, the NLW for workers aged 21 and over will rise from £11.44 to £12.21 an hour.
NMW rates will also rise as follows:

•    apprentice rate: £7.55 an hour
•    16–17-year-olds: £7.55 an hour
•    18–20-year-olds: £10.00 an hour
•    accommodation offset:  £10.66 per week.

Other developments

Statutory rates of pay, such as for statutory sick pay and statutory maternity, paternity, adoption, shared parental pay and statutory parental bereavement pay, normally increase in April each year. The Department for Work and Pensions has announced that this year the weekly rate of statutory sick pay will increase to £118.75, and the weekly rate of statutory maternity pay, maternity allowance, statutory paternity pay, statutory shared parental pay, statutory adoption pay and statutory parental bereavement pay will increase to £187.18. The lower earnings limit will increase to £125 but the maternity allowance threshold will remain at £30 a week.

A Skills England Bill was included within the King’s Speech last Summer, announcing the government’s plans to set up a new skills body and reform the apprenticeship levy. Subsequent announcements propose replacing the apprenticeship levy with a growth and skills levy. The Skills England Bill is awaited in the current parliamentary session.
Also included within the King’s Speech last year was the announcement of a draft Equality (Race and Disability) Bill which will introduce mandatory disability and ethnicity pay reporting for employers with 250 or more employees. The draft Bill is expected in the current parliamentary session. 

Another reform the government is keen to introduce is the statutory right to switch off. It has confirmed that this will be brought in via a statutory code of practice, a draft of which may well be published in 2025.

More information

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