CONSULTATIONS
Although exact timescales are unclear, we can expect the UK Government to publish a number of consultations arising from the provisions of the Employment Rights Bill ("ER Bill") throughout 2025. These include proposed consultations on: -
- For unfair dismissal purposes, the length of the probationary period/initial period of employment during which a modified dismissal procedure will be used; how a modified procedure will work, how it interacts with the Acas Code of Practice on disciplinary and grievance procedures and the compensation regime for dismissals during the initial period of employment.
- For the right to guaranteed hours, consulting on the right to reasonable notice of shifts including which workers are in scope and how review periods should work.
- For the right to payment for shifts cancelled, curtailed or moved at short notice, consulting on what constitutes "low hours workers", what constitutes short notice, how much a payment will be and any exemptions.
- For collective redundancies, additional consultation is intended to gather views on further strengthening the collective redundancy framework, including on doubling the minimum consultation period required when proposing to dismiss 100 or more employees from 45 to 90 days.
- The approach to be taken to flexible working.
- The details of bereavement leave.
- The specifics of the enforcement framework for trade union access to workplaces including penalty amounts.
- How the Fair Pay Agreement (initially for the adult care sector in England) should work.
This is not intended to be an exhaustive list, but it gives an idea of what to expect.
Although not included in the ER Bill, the UK government has also committed to consult on a simpler framework for differentiating workers from the genuinely self-employed.
EARLY 2025
New employment tribunal rules
New employment tribunal rules come into force on 6 January. The changes to the rules are largely a tidying up exercise. 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 (ET3 forms) by email, although a period of grace will be given for around 5 weeks after the Practice Direction comes into force. 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.
Compensation for claims for protective awards
As of 20 January, an amendment to the Trade Union and Labour Relations (Consolidation) Act 1992 will enable tribunals to increase or decrease compensation by 25% in claims for a protective award where it appears a party has not complied with the statutory Code of Practice on Dismissal and Re-engagement.
SPRING 2025
National living and national minimum wage
1 April will see the annual changes to the national living and national minimum wage take effect. As of that date: -
- NLW (for those aged 21 and over) will increase from £11.44 to £12.21 per hour
- NMW (for those aged 18 to 20) will increase from £8.60 to £10.00 per hour
- NMW (for those aged 16 and 17 and apprentices aged under 19 or in the first year of their apprenticeship) will increase from £6.40 to £7.55 per hour
Statutory benefits
Statutory sick pay will increase from £116.75 to £118.75 per week. Statutory maternity, paternity, shared parental, adoption and parental bereavement pay will increase from £184.03 to £187.18 per week. The changes are expected to take effect from 6 April 2025.
Tribunal compensation
It is likely that the new rates for the 2025/26 year will be announced in February or March 2025 and will apply to dismissals occurring on or after 6 April 2025. In 2024, the limit on the compensatory award for unfair dismissal increased from £105,707 to £115,115. Also in 2024, the limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) increased from £643 to £700 meaning that the maximum basic award and maximum statutory redundancy payment increased to £21,000.
Guidelines for injury to feelings awards
An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. This award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered. To assist Employment Tribunals, the Court of Appeal previously set out guidance for quantifying awards for injury to feelings, known as the Vento bands. For claims presented on or after 6 April 2024 the bands are as follows: -
- Lower band (less serious cases) - £1,200 to £11,700
- Middle band (for cases that do not merit an award in the upper band) - £11,700 to £35,200
- Upper band (for most serious cases) - £35,200 to £58,700
Awards of more than £58,700 will only be made in the most exceptional cases.
The bands are reviewed annually and any increases for 2025/26 are likely to be announced in March 2025 and will apply to claims presented on or after 6 April 2025.
Gender pay gap reporting
30 March will see the gender pay gap reporting deadline for public sector employers (using 31 March 2024 as a snapshot date).
4 April will see the gender pay gap reporting deadline for private companies and voluntary organisations with 250 or more staff, using a snapshot date of 5 April 2024. Year on year data shows slow progress in addressing gender pay gaps, with only a 1.6% drop since mandatory monitoring was introduced, so there is still much work to be done.
Neonatal leave and pay
The Neonatal Care (Leave and Pay) Act 2023 introduces a right to up to twelve weeks of leave for parents of children receiving neonatal care. The leave will be paid if parents meet qualifying criteria. Introduced by the previous government, the current signs are that the Labour government still intend to bring this into force in April 2025. However, much of the detail has still to be set out in regulations and there is no confirmed commencement date yet.
LATER IN 2025 AND BEYOND
Employment Rights Bill
The ER Bill is expected to receive Royal Assent at some point in the second half of 2025. On that date the provision repealing the Strikes (Minimum Service Levels) Act 2023 will come into force. Two months later provisions repealing much of the Trade Union Act 2016 will come into force. This includes provisions relating to blacklisting, turnout and support thresholds and the provision of information to members in respect of industrial action ballots, supervision of picketing and changes to the powers of the Certification Officer amongst other things.
The other provisions of the ER Bill will come into force at various times in accordance with regulations made by the Secretary of State. The UK Government has confirmed that most of the proposed changes will not be implemented until 2026, and for the unfair dismissal day 1 right, not before Autumn 2026. There will be extensive consultation and it is possible that these proposed timescales will not be met.
The ER Bill Next Steps policy paper published alongside the ER Bill and Labour's Plan to Make Work Pay document which was published prior to the election make clear that the government intends to make further changes via existing powers and non-legislative routes. This includes a Code of Practice on the right to switch off and reviews and calls for evidence on issues including the effectiveness of the parental leave system and worker status.
For more information on what is (and is not) included in the Employment Rights Bill see:-
- Once in a generation overhaul of employment rights
- Unfair dismissal as a day 1 right - what employers need to know
- The Employment Rights Bill, day 1 rights and flexible working
- How does the Employment Rights Bill impact equality law?
- Employment Rights Bill, security of employment and a 1 stop shop for labour market enforcement
- Employment Rights Bill and Trade Unions
- Important amendments to Employment Rights Bill
- What is not in the Employment Rights Bill
Equality (Race and Disability) Bill
A draft Equality (Race and Disability) Bill will be published during this parliamentary session for pre-legislative scrutiny. This is intended to enshrine the full right to equal pay in law for ethnic minorities and disabled people. It will also introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. The UK Government has said it will begin to consult on this legislation "in due course".
The Paternity Leave (Bereavement) Act 2024
This Act, which was made under the Conservative government will, amongst other things, remove the 26-week qualifying service for fathers and partners to take paternity leave where the mother (or adoptive parent or intended parent for surrogacy purposes) dies shortly after childbirth. It will also remove the condition preventing bereaved partners who have already taken shared parental leave from then taking paternity leave. Regulations are required to bring this Act into force, and the Labour MP who sponsored the Bill indicated it was also intended to increase paternity leave from two to 52 weeks via those regulations. This legislation was introduced by the Conservative government, but it is clear the policy intentions behind it are aligned with those of the current Labour government.
The Pensions (Extension of Automatic Enrolment) Act 2023
There is no timescale for implementation of this Act which will reduce the minimum age for eligibility for pensions automatic enrolment. It will also reduce or remove the lower end of the qualifying earnings band.
KEY CASES FOR 2025
There are a number of high-profile cases due to be heard in 2025, most notably: -
Augustine v Data Cars Ltd - in this case the EAT had held that although a part-time driver had been less favourably treated than a full-time comparator, that was not a breach of the Part-Time Workers Prevention of Less Favourable Treatment) Regulations 2000. The matter will come before the Court of Appeal in July 2025.
Sullivan v Isle of Wight Council - the issue in this case is whether the Employment Rights Act 1996 should be interpreted to allow an external job applicant to bring a whistleblowing claim. The EAT held it should not, but an appeal is due be heard in the Court of Appeal in February 2025.
SPI Spirits (UK) Ltd v Zabelin - sticking with whistleblowing, in this case the EAT held an agreed contractual compensation payment due on termination of employment did not make it just and equitable for an employment tribunal to cap its award for whistleblowing detriment and dismissal. The case goes to the Court of Appeal on 10 April 2025.
During the course of 2025 we should also see judgments handed down in relation to a number of cases of interest that were heard in 2024. These include: -
For Women Scotland Ltd v The Scottish Ministers was heard by the Supreme Court in November 2024. The issue the Court is to decide upon is whether a person with a full gender recognition certificate which recognises their gender as female, is a woman for the purposes of the Equality Act 2010.
Higgs v Farmor's School was heard by the Court of Appeal in October 2024. An employment tribunal found that a Christian employee's gender critical beliefs were protected under the Equality Act, but that the employee's disciplining and dismissal were not because of those beliefs. The EAT upheld an appeal and remitted the question of whether the reason for the employer's actions had been because of or related to the manifestation of her protected beliefs rather than a justified objection of that manifestation. It is the decision to send the case back to the employment tribunal that the claimant is appealing, arguing that the EAT should have substituted their own determination on the matter.
