The year 2024 saw more employment law changes than any other in recent memory. It is not slowing down as we move into 2025. Although new changes will be announced all year long, HR professionals should prepare for the changes that are already on their way.
Here’s a list of changes that will occur in 2025.
Rolled-up holiday pay
Employers will be able, as of the 1st January 2015, to use the rolled up holiday method to calculate annual leave for part-year and irregular-hours workers whose leave year runs from January to December. Employers can also use the new holiday accrual method for part-year workers and irregular hours workers with a leave year that runs from January to December.
The first time these changes will be implemented is April 2024, for those who have a leave period that begins in April. However, employers can align the introduction of the changes with the beginning of the leave period.
Employers must be aware that ‘rolled-up holidays pay’ is technically illegal for other types of employees. Your standard employees will be paid their holiday pay when they go on holiday.
Rehire and fire
In January, the compensation amount awarded to employees subjected to illegal firing and rehiring processes will also be significantly increased.
In 2024, a new statutory Code of Practice on Fire and Rehire will come into effect. The document outlines the practical steps that employers should take when changing terms and conditions for employees. These steps encourage the employee to accept the new terms by encouraging negotiation and compromise from the employer.
Employment tribunals can now increase compensation claims for protective awards by as much as 25% starting 20 thJanuary. It will apply in cases where the consultation requirements were not met and businesses failed to comply with the statutory code introduced in July 2024. Employers must familiarise themselves before the start of the new year.
Minimum wage
After a few quiet months of February and March, the start of the new fiscal years in April 2025 will be marked by the review of the national minimum wage.
The National Living Wage will rise to PS12.21 an hour on April 1 . The rates for younger workers will also increase. The rates for 18-20 year olds and those who have completed compulsory schooling but are not yet 18 will increase.
Apprentices under the age of nineteen, or those aged nineteen and over in their first year apprenticeship will also receive PS7.55 an hour. Apprentices who do not fall into these categories will receive their normal age-related rate.
Statutory payments
While the exact date has yet to be confirmed it is expected that the government will update statutory payments by April.
The Statutory Sick Payment (SSP), which is currently PS118.75 a week, will be increased to PS118.75 a week. The statutory maternity pay (SMP), and other family leave benefits, such as statutory paternity payments, will increase to PS187.18 a week.
The lower earnings limit will also increase to PS125 a week.
Neonatal care leave
In April, parents of newborns admitted to the hospital before their 28th day of age will be entitled to a week-long leave of absence for neonatal care.
The Neonatal Care Act (Leave and Pay Act) 2023 allows parents to take up to 12 weeks of leave for each week their baby spends in the hospital. The statutory rate will apply to this, which is in addition to the maternity/paternity leaves.
This will be a right that is available from the first day of employment, so employees who are not eligible for paternity leave can still be granted neonatal leave. The employee will be unable to refuse the leave.
Paternity leave (bereavement leave)
There is still no date confirmed, but 2025 will likely see the introduction of paternity leave (bereavement leave).
The Paternity Leave (Bereavement Leave) Act 2023 gives fathers, and partners who are not the mothers of the child, the right to paternity leaves from the first day of employment.
In these circumstances, it is also intended to extend paternity leaves to the same duration as maternity leave.
Employment Rights Bill
The Employment Rights Bill is a priority for all organisations in 2025.
The proposed day-one right for unfair dismissal is one of the most significant changes, but it’s subject to a mandatory probation period. It is the biggest change in employment law for many years. This could open the floodgates to tribunal claims.
Combined with the financial implications of employer NICs we can expect to see a tightening in the job market over the next year.
Preparation is essential, as there are so many changes and potentially costly consequences if employment law updates do not take place correctly.
