Employment Law Changes in 2025 Businesses Must Prepare For

2024 brought significant reforms to employment law, introducing key changes that reshaped workplace rights and protections.

In April, for example, new regulations took effect granting employees greater flexibility in their working arrangements, expanding leave entitlements for carers, strengthening redundancy protections for pregnant workers, and providing more adaptable options for paternity leave.

Building on these developments, businesses should prepare for further important changes set to take effect in 2025 and beyond. Some proposed updates are still under review, and new developments are likely to emerge in the near future.

In this article, we will reflect on the anticipated changes to employment law in 2025, to include those introduced by the new UK government under the Employment Rights Bill, which is expected to become law in 2026.

What is the Employment Rights Bill?

The Employment Rights Bill, which was presented to the House of Commons on 10 October 2024, is poised to enact the most substantial transformation of UK labour laws in a generation. Most of these changes are scheduled to take effect in 2026, whilst other key employment law updates are expected as early as April this year.

The Bill is set to introduce extensive employment law reforms covering unfair dismissal, firing and rehiring, collective redundancies, zero-hour contracts, trade unions, industrial action, workplace sexual harassment, statutory sick pay, flexible working, and family leave.

The reforms will affect England, Scotland and Wales, but not Northern Ireland as employment law here is devolved.

Employment Law Changes April 2025

Upcoming Wage Increases

Starting 1 April 2025, the National Living/Minimum Wage will rise, with rates increasing from £11.44 to £12.21 per hour for workers aged 21 and over, and from £8.60 to £10 per hour for those aged 18-20.

Wages for 16–17-year-olds and apprentices will also rise from £6.40 to £7.55 per hour, marking a significant 18% increase.

Statutory Leave Payment Changes

In addition, statutory payments for sick leave (access to which will be strengthened by the removal of the Lower Earnings Limit and the elimination of the waiting period), maternity leave, and other family-related absences will see an increase from 1 April.

Introduction of Neonatal Care Leave

From 6 April 2025, the right to ‘Neonatal Care Leave’ will take effect from an employee’s first day of work. This entitlement applies to parents whose newborns are admitted to neonatal care within their first 28 days of life and require a hospital stay of at least seven consecutive days.

Those who qualify will have the right to take up to 12 weeks of additional leave—alongside existing maternity or paternity leave—with the possibility of statutory pay if they qualify.

2025 Key UK Employment Law Changes Factsheet

This factsheet outlines key developments in 2025 affecting workforce management. In particular, the proposed Employment Rights Bill (2024) will drive significant changes, anticipated to start late 2025.

Download Now

Upcoming Employment Law Changes in 2026

Expanded Unfair Dismissal Protections

Under current law, employees must complete two years of continuous service before they can file an unfair dismissal claim, except in certain limited circumstances.

The Bill seeks to eliminate this qualifying period, granting all employees the right to bring a claim for unfair dismissal from their first day of employment, subject to statutory probationary period.

Restrictions on Fire and Rehire Practices

The Bill aims to restrict the circumstances under which businesses can dismiss employees and rehire them on less favourable terms or replace them with new hires.

It will also introduce measures making it automatically unfair to dismiss an employee for refusing changes to their employment contract, except in specific situations, such as when an employer can demonstrate financial difficulties.

New Rules for Zero-Hours and Casual Workers Contracts

The Bill also seeks to introduce new requirements for employers regarding zero-hours contracts.

Employers must offer a guaranteed hours contract to qualifying zero-hours workers, ensuring more job security.

Additionally, businesses will be obligated to provide reasonable advance notice for shifts and compensate employees for shifts that are cancelled or rescheduled at short notice.

Action Priorities for Employers

To help employers navigate the upcoming employment law changes, we have outlined below some key recommendations to ensure your organisation remains compliant and well-prepared:

• Review Employee Pay: Ensure your staff’s wages align with the National Living/Minimum Wage rates increases effective from 1 April 2025.
• Update Employment Contracts: Revise your employment agreements to reflect the legislative changes introduced in 2024 and those anticipated in 2025.
• Revise Workplace Policies: Evaluate and amend your employee policies to reflect the current entitlements and legal standards.
• Enhance Health and Safety Measures: Confirm that your health and safety protocols are current and comply with the latest regulations.
• Monitor Legislative Developments: Stay informed about the progression of the Employment Rights Bill to anticipate and prepare for upcoming regulatory changes.

Protecting Worker’s Rights in 2025 and Onwards

The anticipated employment law changes to expect in the coming months and years provide further protection for employees. Employers should be sure to act now to prepare for these upcoming developments.

If you need assistance navigating employment matters, LegalVision is here to help. You can reach our team by calling 0808 196 8584 or filling out the form on this page.