Spring 2025 employment law update

Employment law is back in the news with the Government’s Employment Rights Bill working its way through Parliament. Since most of those proposals are not expected to come into force until 2026, employers should not be distracted from more immediate changes.

Linda Wilson, Head of Employment at MacDonald Oates, provides a reminder about recent changes in law and outlines important changes to the Employment Rights Bill.

Increases in statutory pay rates

Employers should be aware for the annual increases in the following rates:

• National minimum wage from 1 April 2025:
  • apprentices from £6.40 to £7.55 per hour;
  • workers aged 16 to 17 from £6.40 to £7.55 per hour;
  • workers aged 18 to 20 from £8.60 to £10.00 per hour; and
  • national living wage – aged 21 and over, from £11.44 to £12.21 per hour.

• Sick pay from 6 April 2025 increases from £116.75 to £118.75 per week.

• Family-related statutory pay from 7 April 2025, the rates of statutory maternity pay, statutory paternity pay, statutory adoption pay, statutory shared parental pay and statutory parental bereavement pay increase from £184.03 to £187.18 per week. The earnings threshold to be eligible increases from £123 to £125 per week.

• Maternity allowance from 11 April 2025 will increase from £184.03 to £187.18. The earnings threshold to be eligible remains at £30 per week.

Neonatal care leave and pay

A new right will allow parents (including adopting parents and intending parents in the case of surrogacy) time off work if their baby receives neonatal care, in addition to their other family leave entitlement. This will apply from the first day of employment to the parents of babies who:

• are born on or after 6 April 2025; and
• receive neonatal care for at least seven days during their first 28 days of life, including palliative care.

Parents may take up to 12 weeks’ neonatal care leave within 68 weeks of the baby’s birth. If the employee has worked for the employer for 26 weeks and they are paid more than the lower earnings limit (£125 per week for 2025/26) they must receive statutory neonatal care pay (£187.18 or 90% of pay, whichever is lower).

If the baby dies once the parents have become entitled to neonatal care leave, the parents are able to continue to take their leave.

Reminder on recent changes

Remember to ensure that you have taken appropriate steps in regard to the changes introduced in recent months:

Tipping – since 1 October 2024 employers are required to give all tips, service charges and gratuities to staff without deduction and to ensure that these are fairly shared between staff in accordance with the Statutory Code of Practice.

Sexual harassment – since 26 October 2024, employers are under a duty to take reasonable steps to prevent sexual harassment of their employees. Tribunals may increase awards for harassment by up to 25% if it is found that the employer failed in its duty. Until the Employment Rights Bill takes effect, this duty does not include harassment by customers or other third parties.

Fire and rehire compensation – since July 2024, new regulations increased the compensation an employee can be awarded if their employer fails to follow the Statutory Code of Practice when dismissing and re-engaging them to bring about a change to their contract of employment. A tribunal can increase or reduce the award by 25% for any unreasonable failure to follow the code, which sets out steps employers should follow like information sharing and meaningful consultation before moving to dismissal as a last resort.

From 20 January 2025, if an employer fails to collectively consult when changing terms and conditions through the dismissal and re-engagement process, (this duty can arise where 20 or more employees are affected) and the employer unreasonably failed to comply with the code, the tribunal can increase the award for failing to consult by up to 25%. The award can be up to 90 days’ pay per employee.

Update on Employment Rights Bill

A few changes relating to trade union ballots, protection against blacklisting and provisions for unions in the public sector are expected in 2025. Otherwise, the more dramatic changes in the Employment Rights Bill are not expected to come into force until 2026, at the earliest. Recent amendments to the bill include the following significant changes:

• Zero-hours contracts – the new rights to protect workers on zero-hour contracts, such as the right to guaranteed hours and reasonable notice of shifts, will be extended to agency workers;
• Time limits to bring employment tribunal claims – currently individuals have only three months to bring the vast majority of claims. This will be increased to six months; and
• Tribunal claims brought by Government – the Secretary of State will be able to bring an employment tribunal claim on behalf of a worker where the individual has a right to do so but is not bringing a claim themselves.

How we can help

The increase in rules and enhanced compensation bring increased risks for employers. We can help you with policies to ensure consistent good practice and give you practical advice to minimise risk and employment liabilities across your business.

For further information, please contact Linda at or 01730 268 211.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.