The publication of the U.K. Employment Rights Bill (“ER Bill”) and the expectation that it will become law, most likely in the second half of 2025, mean that significant change is on the way. This year, though, is likely to be dominated by multiple consultations rather than substantive change.
Consultations
The U.K. government has confirmed that there will be extensive consultation over the proposed employment law changes set out in the ER Bill. It has also confirmed that most of the proposed changes will not be implemented until 2026 at the earliest.
There have already been several consultations in the final quarter of 2024 relating to the ER Bill, but throughout 2025, there will likely be consultations on issues such as: 1) removing the qualifying service requirement for unfair dismissal, including consultation on the length of the initial period of employment where a “lighter touch” dismissal procedure will be required and how that procedure will work; and 2) doubling the minimum collective consultation period from 45 to 90 days where an employer is proposing to dismiss 100 or more employees within a 90-day period.
Other consultations expected in 2025 include those seeking views on developing the details of the approach to be taken on flexible working and those discussing the introduction of the right to reasonable notice of shifts as well as payment for canceled, curtailed, or moved shifts.
There may also be consultations relating to matters such as: 1) a more general right to bereavement leave, and 2) equality action plans and menopause support.
The government also stated in its “Make Work Pay” document that it would conduct a review of the current parental leave system during its first year of government.
Legislation
In addition to the repeal of the Strikes (Minimum Service Levels) Act 2023 on the day the ER Bill receives Royal Assent (i.e., anytime from this summer onward), a number of other trade union-related provisions will take effect two months later. These are largely facilitated by the repeal of the majority of the Trade Union Act 2016 and include changes to rules on the supervision of picketing, blacklisting, and turnout and support thresholds for industrial action ballots.
Besides the ER Bill, there are other pieces of legislation expected to take effect this year. Later this month, on Jan. 20, an amendment to the Trade Union and Labor Relations (Consolidation) Act 1992 will enable employment tribunals to increase or decrease compensation by 25% in claims for a protective award where it appears a party has not complied with the Code of Practice on Dismissal and Re-engagement.
Although it has yet to be confirmed, April is also expected to see the right to neonatal leave and pay take effect. This will introduce statutory neonatal leave and, where qualification requirements are met, pay for up to 12 weeks for parents of babies that require neonatal care.
Changes to Statutory Rates and Employment Tribunal Limits
April will also see the annual increase to national living and national minimum wage. For workers aged 21 and over, the National Living Wage rate will increase from £11.44 per hour to £12.21 per hour.
Also in April, there will be changes to statutory sick pay, statutory benefits, and employment tribunal compensation, including the annual increases to basic and compensatory awards.
April will also see the changes to employer national insurance rates announced in the autumn budget.
Gender Pay Gap Reporting
Around the time that these changes are taking effect, the usual gender pay gap reporting deadlines need to be met by those organizations with a headcount of 250 or more employees. Accordingly, the deadline for public-sector employers to report their data will be March 30, with a snapshot date of March 31, 2024. For private-sector employers and voluntary organizations, the deadline will be April 4, with a snapshot date of April 5, 2024.
Other Changes
New employment tribunal rules take effect on Jan. 6. The changes to the rules are largely an exercise in tidying up. This is due to be followed later in January by a Practice Direction that will result in employers no longer being able to lodge their response to a claim (ET3 forms) by email, although a grace period will be given for around five weeks after the Practice Direction takes effect. Thereafter, any response to a tribunal claim will only be able to be lodged using the tribunal service online system, by post, or by hand.
Further employment law changes may yet be announced. For example, there may be progress in relation to the Draft Equality (Race and Disability) Bill, which was announced in the King’s Speech, most likely by way of some form of consultation. This is intended to enshrine the full right to equal pay in law. It will also introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees.
Innes Clark is an attorney with Morton Fraser MacRoberts LLP in Edinburgh, Scotland, U.K. © 2025 Morton Fraser MacRoberts LLP. All rights reserved. Reposted with permission of Lexology.
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