
Employment Law – What to expect in 2025
To assist our clients in preparing for 2025, the Taylor Walton Employment team have set out below what can be expected from the world of employment law this year.
The Employment Rights Bill
Labour’s Employment Rights Bill is set to receive royal assent in 2025. However, the Government confirmed in their “Next Steps” document that most of the reforms “will take effect no earlier than 2026”, with the most significant reforms to unfair dismissal due to have effect “no sooner than Autumn 2026”. This is because most of the reforms will have to be implemented through Government regulations (secondary legislation) and so the Government can essentially choose when they will come in to force.
The delay until 2026 is to allow the Government time to consult and they have made clear that 2025 will be the year of consultations. This process is subject to obtaining input from the “relevant stakeholders” (trade unions, business organisations etc), so the Government can decide how the reforms should be practically implemented through the supporting regulations. The details and timeframes of such consultations are yet to be provided, but some of the key areas the Government are expected to consult on are:
- With the abolition of the two-year qualification period for unfair dismissal, how long the statutory probationary period should be during which employers can follow a “lighter touch” dismissal process.
- Whether the minimum time period for beginning the collective consultation process should be increased from 45 to 90 days before the first dismissal in cases where an employer is proposing to make 100 or more employees redundant.
- How long the reference periods should be for calculating the number of hours zero (or low) hour contract workers are guaranteed. This relates to the reform that gives zero (or low) hour contract workers the statutory entitlement to guaranteed hours. The number of guaranteed hours will initially be calculated by reference to a 12-week period, but how long subsequent review periods should be is still unclear.
Some minor trade union reforms will come into force immediately when the Bill becomes law. The most notable of these is the repealing of the legislation that requires minimum levels of service to take industrial action. In general, however, 2025 looks to be a year confined to tracking the progress of the Bill through Parliament to note any significant amendments to what is anticipated.
The ”Right to Switch Off”
Labour’s “Right to Switch Off” appeared to be a key feature of their “Plan to Make Work Pay” prior to the election. The right would allow for employees not to be contacted by their employers outside office hours if they so wish. The right’s omission from the Employment Rights Bill was notable, however, the “Next Steps” document did confirm the right would be enacted through a Statutory Code of Practice instead. Consultation on a Code of Practice is expected in 2025.
National Minimum Wage Increases
From 1 April 2025, the National Minimum Wage rates are set to increase accordingly:
21 and over | 18 – 20 | Under 18 | Apprentice | |
April 2024 (current rate) | £11.44 | £8.60 | £6.40 | £6.40 |
April 2025 | £12.21 | £10.00 | £7.55 | £7.55 |
The increase from £8.60 to £10.00 for those aged between 18 to 20 is the largest ever and lays the foundation for the Government’s plan to introduce a single adult rate (save for apprentices).
Neonatal Leave and Pay
The Neonatal Care (Leave and Pay) Act 2023 enables the Government to make regulations to introduce statutory neonatal leave and pay for parents of sick new-borns. The previous Government said it would use the powers granted under this Act in 2025 but it had been unclear whether Labour’s intentions matched those of their predecessors. It has recently been announced, however, that as of 6 April 2025, statutory neonatal leave and pay will become available to eligible employees.
Employees shall be eligible if they are the parents of babies up to 28 days old, who have spent 7 or more continuous days in hospital. The entitlement to leave is a “day-one right” but employees entitled to neonatal pay must have at least 26 weeks of continuous service and must earn on average of at least £123 a week. The length of the entitlement will depend on how long the baby remains in hospital, with parents entitled to a week’s (paid) leave for each uninterrupted week their baby is in hospital (up to a maximum of 12 weeks). Neonatal leave may be tagged on to other forms of statutory family leave, provided it is taken within the first 68 weeks of the child’s birth.
To prepare for this change, businesses should ensure they have in place an appropriate Neonatal Leave and Pay policy and make provision for the additional strain on resources this new employee right may have.
Paternity leave for bereaved partners
The Paternity Leave (Bereavement) Act 2024 was passed in May last year, but regulations are needed to bring the Act into force. In general terms, the Act will provide bereaved partners with paternity leave when the mother dies. The bereaved partner would not require the usual 26-weeks’ minimum service to benefit from the leave and it is expected that a longer period of paternity leave will be available.
It is not currently clear when the new entitlements will come into force.
Draft Equality (Race and Disability) Bill
The Government is proposing to introduce the Equality (Race and Disability) Bill in the current Parliamentary session. The Bill would enshrine in law the right to equal pay for ethnic minorities and disabled persons. At present, such persons must rely on discrimination legislation to bring claims for unequal pay. There are, however, several legal thresholds that must be met to bring successful discrimination claims and this can operate as a barrier to claimants seeking equal pay. The Government hopes that this Bill will provide these demographics with an alternative, easier avenue for bringing such claims.
The Bill would also introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees.
As this Bill has not yet been introduced to Parliament, and with extensive consultation expected, it is highly unlikely the Bill will become law in 2025.
Upcoming judgments and hearings
- Thandi and others v Next Retail Ltd and another – a number of female shop-floor staff brought a claim against Next for paying them less than the predominantly male warehouse staff. In 2023, an ET ruled that the work of the shop-floor staff was of equal value to that of the warehouse staff. At a further hearing in 2024, the ET did not accept Next’s justification for paying the floor staff less based on “market forces”. The ET said that Next were essentially trying to cut costs in the interests of profitability which was not a legitimate reason for breaching equal pay legislation. Next has appealed this decision to the EAT and the judgment is expected in 2025. The decision should provide useful guidance for employers when reviewing the pay of separate divisions of their workforce.
- Higgs v Farmor’s School – a secondary school employee was dismissed for expressing views on Facebook that a parent perceived as transphobic. Mrs Higgs’ brought a claim for discrimination, contending that her “gender-critical” beliefs were protected under the Equality Act 2010 as “philosophical beliefs”. The ET agreed that Mrs Higgs’ beliefs were protected but nonetheless dismissed her claim. This was because they considered her dismissal was not because of her beliefs, but because of the school’s concerns regarding their reputation. On appeal, the EAT ruled that the ET had not applied the correct test. Given that Mrs Higgs’ beliefs were protected, the ET should have analysed whether the school’s actions were proportionate. This analysis is particularly complicated given that in expressing her protected belief, Mrs Higgs was speaking in a discriminatory manner about a different protected characteristic (gender re-assignment). The answer to this conundrum shall be provided by the Court of Appeal in their judgment later this year. The judgment should provide useful guidance on how employers should respond when different protected beliefs/identities clash.
- Dr David Miller v University of Bristol – a professor was dismissed for gross misconduct for expressing anti-Zionist beliefs. The professor’s claim for “religion or belief“ based discrimination against the University was upheld by an ET. The University has appealed the decision to the EAT who will decide later this year whether anti-Zionist beliefs are protected under the Equality Act 2010. This will be of particular significance given the prominence of the Israel/Gaza conflict in public discourse currently.
If you would like to discuss anything mentioned in the article above, please reach out to our Employment team by filling out an enquiry form on our contact page.
Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.
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