Employment Law Changes in 2025: What You Need to Know

2025 is set to bring significant updates to employment law in the UK, with changes affecting everything from tribunal processes and workplace safety to statutory pay increases and fraud prevention. These reforms will impact employers and employees across all industries, making it crucial for businesses to stay ahead of compliance requirements and workforce planning.

Here’s a comprehensive guide to what’s changing and how to prepare.

 

New Tribunal and Fire-and-Rehire Rules (January 2025)

Tribunal Procedure Reforms – Effective 6 January

The new Tribunal Procedure Rules aim to streamline case progression, reducing backlogs and delegating judicial functions to legal officers. This means employment cases could be resolved faster, improving efficiency in the system.

Fire-and-Rehire Compliance – Effective 20 January

Tribunals will now have the power to increase awards by up to 25 percent if an employer fails to follow the Code of Practice on Dismissal and Re-Engagement.

What this means for businesses:

• Employers must follow proper consultation and redundancy processes.
• Non-compliance in restructuring or redundancy situations could result in financial penalties.

 

Health and Safety Reforms – Pending Legislation

The Health and Safety at Work etc. Act 1974 (Amendment) Bill had its second reading in March 2025 and proposes new employer obligations, including:

• Increased responsibility to prevent workplace violence and harassment.

• Greater protections for women and girls, reinforcing duties around sexual harassment.

Note: These proposals are not yet law but may progress later in 2025 or beyond.

What businesses should do now:

• Review anti-harassment policies and workplace safety procedures.
• Introduce mandatory training on workplace conduct and employee rights.
• Strengthen reporting mechanisms for incidents.

 

Statutory Pay and National Minimum Wage Increases (April 2025)

Employers should prepare for higher payroll costs, as statutory rates are increasing across the board:

• National Minimum Wage: £12.21 per hour for workers aged 21 and over
• Statutory Sick Pay: £118.75 per week
• Parental Leave Benefits: £187.18 per week
• Employer NIC Contributions: Rising to 15 percent for earnings over £5,000

What this means for businesses:

• Employers must update payroll systems to reflect new rates.
• Increased labour costs could impact hiring budgets, making workforce planning essential.

 

Neonatal Care Leave Introduced (April 2025)

From 6 April 2025, parents of newborns requiring extended hospital care will have access to up to 12 weeks of paid neonatal leave.

Eligibility criteria:

• Employees must have 26 weeks of service.
• Must earn at least £123 per week.
• Leave must be taken within 68 weeks of birth.

What businesses should do:

• Update HR policies to include this entitlement.
• Train managers and HR teams to manage requests efficiently.
• Ensure payroll systems can accommodate this new leave type.

 

Fraud Prevention Legislation (September 2025)

The Failure to Prevent Fraud Offence will introduce criminal liability for large businesses that do not implement reasonable fraud prevention measures.

Businesses could be held accountable for fraud committed within their organisation, including:

• Dishonest sales practices
• Financial misrepresentation
• Fraudulent activities in supply chains

How to prepare:

• Conduct a risk assessment and implement fraud prevention measures.
• Ensure compliance training covers anti-fraud policies.
• Establish whistleblower protection programs.

 

Additional Legal Changes You Should Know. (Updated April 22nd 2025)

 

Holiday Pay for Irregular Hours Workers (In Force since January 2024)

• Employers can now use a 12.07% accrual method for holiday pay for irregular or part-year workers. This method has been formalised and remains valid in 2025.
• Action: Ensure correct application of holiday pay calculations for non-standard contracts.

 

Day-One Right to Request Flexible Working (In Force since April 2024)

• Employees no longer need 26 weeks of service to request flexible working arrangements.
• Action: Update flexible working policies and ensure managers understand how to assess requests fairly and consistently.

 

Carer’s Leave (In Force since April 2024)

• Eligible employees are now entitled to one week of unpaid leave annually to care for dependants with long-term needs.
• Action: Integrate this into leave policies and ensure it is reflected in HR systems.

 

Predictable Working Pattern Rights (Coming September 2025)

• From September, workers—including agency staff and those on zero-hours contracts—will have the right to request a more predictable working pattern after 26 weeks of service.
• Action: Prepare for an increase in formal work pattern requests, and review rostering and contract models now.

 

Right to Disconnect – Still Under Consultation

• The government is expected to consult on a "Right to Switch Off" policy, similar to Ireland and Belgium, limiting work-related communication outside contracted hours.
• This remains under review, but is one to watch for 2026 and beyond.

 

Preparing for 2025 and Beyond

With multiple employment law changes taking effect, businesses must act now to stay compliant.

Checklist:

• Review and update dismissal, redundancy, and consultation policies.

• Ensure payroll systems reflect statutory rate changes.

• Enhance workplace safety and anti-harassment policies.

• Implement fraud prevention measures to avoid potential liability.

Staying ahead of these changes will not only ensure compliance but also create a more engaged, secure, and forward-thinking workplace.

Need Expert Advice on Navigating These Changes?

Contact us today for tailored advice on staying compliant and thriving in 2025.