With the government working on the Employment Rights Bill, organisations must stay ahead of significant employment law changes that will impact workplaces across the UK. From updates to statutory rates to the long-anticipated Employment Rights Bill, these changes will shape how organisations manage their workforce.
Labour Employment Law Changes for April 2025
National Minimum Wage Updates
The statutory rates for the National Minimum Wage will be updated in April 2025 to the following:
| |
21 and over |
18 to 20 |
Under 18 |
Apprentice |
| New rate 2025 |
£12.21 |
£10.00 |
£7.55 |
£7.55 |
Employers must ensure compliance with the new rates to avoid penalties and ensure fair pay practices.
Employer National Insurance Adjustments
Only employer contributions will be affected, with the following key changes:
- The threshold from which employers will start paying National Insurance per employee will decrease from £9,100 (£758 per month) to £5,000 (£417 per month).
- The employer contribution rate will increase from 13.8% to 15%.
- Employment Allowance will rise from £5,000 to £10,500 per year, benefiting eligible businesses, including charities.
- The £100,000 threshold has been removed for small businesses and charities.
Neonatal Care Leave and Pay
From 6 April 2025, working parents will be entitled to up to 12 weeks of neonatal care leave. If eligible, they will receive pay at the same rate as Statutory Maternity Pay (SMP).
The leave structure includes:
- Tier 1: Starts when neonatal care begins and ends seven days after care stops and can be taken as non-continuous blocks of 1 week each
- Tier 2: Can be taken any time after Tier 1, up to 68 weeks after birth, but must be taken as one continuous block of at least 1 week.
Neonatal care leave will be in addition to the usual maternity/adoption/paternity and shared parental leave, meaning that people can have up to 64 weeks leave.
Employees will need to provide notice depending on which tier they are using, with tier 1 before the first day of each intended week (can be verbal) and for tier 2, it must be 15 days if only taking one week or 28 days if multiple weeks are taken and must be in writing.
The Employment Rights Bill: What to Expect
While much of the Employment Rights Bill is still under consultation, key changes are expected in 2026. However, updates in March 2025 have provided greater clarity on the government’s intentions.
Day 1 Rights for Unfair Dismissal
Currently, employees need two years of continuous service to claim unfair dismissal (except for automatically unfair reasons). From Autumn 2026, employees will be able to make an unfair dismissal claim from day one of employment.
This does mean that employees starting employment now will no longer need to have 2 years continuous employment to make a claim as everyone is expected to gain the right from Autumn 2026.
Statutory Probation Periods
The introduction of a statutory probation period (up to nine months) aims to balance the new day 1 unfair dismissal rights. Details on how this will work remain under discussion and we will keep you informed once we know more.
Extended Bereavement Leave
The government plans to extend bereavement leave and pay to include parents who lose a child before 24 weeks of pregnancy. Currently this is only available for parents who lose a child under 18 years old, or from 24 weeks of pregnancy in the case of a miscarriage. Parental bereavement leave will be available in addition to maternity/adoption/paternity leave.
Additionally, a new entitlement of one week of unpaid bereavement leave will be introduced for other bereavements, but it is unclear at the moment who this apply to (ie, direct family, close friends, etc).
Zero-Hour Contracts: Strengthening Worker Protections
There has been much talk about banning zero hour contracts, however, it is unclear at this point whether the government will completely ban such contracts or tighten the rules. What we know is that the proposed changes include:
- Ensuring all workers, including agency workers, receive contracts that reflect actual hours worked.
- Potential removal of “worker” as a legal employment status.
- Compensation for last-minute shift cancellations.
Flexible Working Rights
Following changes in April 2024, the government wants to further enhance the right to make a flexible working request by making it a default option and it is expected that employers must provide a valid reasonable reason if refusing a flexible working request.
Currently, employees already have the following rights:
- Employees can request leave from day 1 of their employment
- Employees can make 2 requests per 12 months
- Employees have the right to a consultation meeting if the employer may decide to refuse the request
- The whole process must be completed within 2 months
- Employers can only refuse for one of 8 business reasons
Fire and Rehire Practices
The government plans to tighten the rules on fire and rehire practices by making it an automatic unfair dismissal unless an employer can prove financial hardship necessitated the change.
Fire and rehire is usually used to ‘force’ less favourable terms and conditions on employees who refuse to agree to those changes. It already comes with unfair dismissal risk, but can be hard to win for employees, especially where the change is argued to be reasonable by the employer.
Changes to Redundancy Consultation
- The cap on protective awards in collective redundancy cases will increase from 90 to 180 days’ pay per employee.
- Collective consultation will still be required for 20 or more redundancies within a 90-day period at a single establishment. The government wanted to remove the single establishment exception, but have now decided not to continue with this.
Preparing for the Future
HR teams must stay informed and proactive as these changes take effect. Reviewing policies, updating employment contracts, and ensuring compliance with the new legal framework will be essential.
For tailored HR support, contact Roots HR at info@rootshr.org.uk or visit www.rootshr.org.uk.
