Due to the change of government in July 2024, it’s easy to be confused about legislation changes this year. We’ve looked at the details for you, so here’s a rundown of the changes.

National Minimum Wage rates

The National Minimum Wage/living rates are going up on 1 April 2025. If your pay is based on minimum wage rates per hour, you will need to implement these changes:

 

Age group	Up to 31/3/2025	From 1/4/2025
21 and over	£11.44	£12.21
18 – 20	£8.60	£10
Apprentices under 19 (or over 19 but in year 1 of apprenticeship) and under 18s	£6.40	£7.55

Statutory pay rates – From April 2025

Family friendly leave

The rates of Statutory Maternity, Adoption, Paternity, Shared Parental and Parental Bereavement pay will increase to £187.18 per week.

Statutory Sick pay

The rate of Statutory Sick Pay will increase to £118.75 per week.

Statutory redundancy payments

With effect from 6th April 2025, the statutory redundancy pay cap will increase to £719 per week. It’s important to ensure you get up to date compensation information for anyone who leaves due to redundancy on or after this date. You will need to calculate their redundancy pay on the new rate.  If the redundant employee’s normal weekly rate is under the new figure, you should calculate their redundancy compensation based on their actual weekly pay rate.

Statutory Neonatal Care Leave

This statutory leave will allow parents whose babies need hospital neonatal care to take up to 12 weeks’ paid leave, with one full week available for each full week the baby receives neonatal care. This is in addition to their statutory maternity, shared parental or paternity leave. The right will:

• be available from day one of employment
• apply to parents with babies who are admitted to hospital before they are 28 days old and
• apply to babies who need to stay in hospital for 7 days continuously or more.

Leave must be taken within 68 weeks of the baby’s birth, or placement in the case of adoption

Neonatal Care pay will only be available for employees who have 26 weeks of continuous service and who meet the minimum earnings threshold (£125 per week).

This entitlement will be effective from 6^th April 2025.

Employer National Insurance increase

National Insurance Contributions (NIC) rates for employers increase from 13.8% to 15%. In addition, the threshold at which employers start paying NICs will decrease from £9,100 to £5,000 of an employee’s annual salary / wage. This means an additional £4,100 of each employee’s earnings will be subject to Employer NICs. The net result of this will be that more lower paid employees will be subject to Employer NICs.

This change is effective from 6^th April 2025.

Upcoming changes to be confirmed

Pension Scheme Bill

In November 2024, the Government announced it will introduce a new Pension Scheme Bill in 2025. The Bill is expected to include:

• Automatic consolidation of small, deferred pension pots
• A value-for-money framework for Defined Contribution (DC) schemes
• A requirement for occupational DC schemes to offer tailored retirement income solutions
• A commercial Defined Benefit superfund to enhance financial security for its members

It’s expected that a pension dashboard will be introduced in 2025, which will allow people to view all of their pension savings (including state pensions) on one platform. The aim of this is to improve transparency and enable people to have more control of their retirement planning.

Paternity (bereavement) leave

This new right will be a day-one right. The 26-week minimum service requirement for paternity leave will not apply for fathers and partners where the mother has died in the first year after birth or adoption. This also applies to a bereaved parent of an adopted child, or intended parent of a child born through a surrogacy arrangement. In addition:

• These bereaved parents will also be able to take paternity leave
• Where the child also dies (or is returned after adoption) the employee can still take leave

There are also plans for paternity leave to be extended to 52 weeks for these bereaved partners. It is unclear whether the day one right to paternity leave in this situation will extend to paternity pay.

Trade union reforms

Some of the trade union reforms contained in the Employment Rights Bill are expected to come into force in 2025 – removing the following requirements which were introduced by the previous government:

• The minimum service level requirements for certain sectors
• The information and turnout requirements for ballots

The Employment Rights Bill – progress

In line with the plans unveiled in the government’s Employment Rights Bill, future legislation changes have been laid out in general terms and are detailed below. In most cases the date of implementation is to be confirmed, unless stated otherwise.

NB The government have confirmed they do NOT intend to introduce a right to disconnect under the Employment Rights Bill, but it may be implemented under a ‘code of practice’ at some point in the future.

The list of forthcoming legislation changes below includes legislative and non-legislative changes planned.

Unfair dismissal

The two-year unfair dismissal qualifying period will be removed, and be replaced with a new statutory probationary period, referred to as the ‘initial period of employment’ in the bill. The length of this period is yet to be confirmed but is likely to be up to nine months.

Unlikely to be effective before Autumn 2026.

Trade union rights

Consultation has concluded and it’s been confirmed that the process and transparency around trade union recognition will be improved. There will be a new duty on employers to inform workers of their right to join a trade union.

The bill will also simplify information requirements on ballots for industrial action and extend the expiry of a mandate for industrial action from 6 to 12 months.

A further amendment will repeal the 50% industrial action ballot threshold (on a date to be specified in regulations).

Sick pay

There will be a right to Statutory Sick Pay (SSP) from day one of illness absence, removing what are referred to as the three ‘waiting days’. The requirement for employees to meet or exceed the Lower Earnings Limit (£125 from 1/6/25) will be removed.

Low earners, including those currently paid under the LEL will be eligible for SSP at a rate of 80% of their normal weekly earnings, if less than the flat rate of SSP.

Fire and rehire

Employers’ ability to use fire and rehire will be restricted due to a change to the laws on unfair dismissal. Where employers fail to agree a change to a contract of employment and a ‘fire and rehire’ process is initiated, the dismissals will be treated as automatically unfair unless the employer can show evidence of financial difficulties, and demonstrate that the need to make the change in contractual terms was unavoidable.

In addition, in January 2025 tribunals were able to apply up to a 25% uplift to compensation where the ‘fire and rehire’ process lead to proven unfair dismissal, IF the employer didn’t follow the Code of practice on dismissal and re-engagement, issued by the Secretary of State.

Redundancy collective consultation

Employers will no longer be able to treat redundancies at different locations as completely separate for the purposes of the thresholds for collective consultations. Collective consultation will be required if there are 20 or more redundancies at one establishment, OR where redundancies are being made across the employer as a whole, if a different threshold (to be confirmed) is reached. This new threshold for across the employer as a whole could be a fixed number, or a percentage of the workforce. This is a change to the original proposal.

The maximum protective award will be increased where an employer has failed to comply with collective consultation requirements. Specifics to be confirmed.

Employees who bring a claim for the protective award will also be able claim interim relief via the employment tribunal, and the government is proposing to increase the cap on Protective Awards in collective redundancy situations to 180 days (increased from 90 days) to encourage employer compliance.

Agency and Zero-hours workers

Agency workers will have the right to a guaranteed hours contract to reflect the hours they regularly work. This is likely to be across a set reference period. In addition, agency workers and zero hours contract workers will be given a right to reasonable notice of changes to shifts or working hours. There will be however the possibility of excluding those rights via a collective agreement.

Workers will also have a right to compensation that is proportionate to the notice given for any shifts that are cancelled or curtailed.

The details will be set out in regulations, and subject to consultation.

Flexible working

Flexible working will be the default day-one right, apart from when it is not reasonably feasible. If the employer believes it’s not reasonably feasible, the current eight reasons for refusing the request for flexibility will remain. Employers must explain the reason for a refusal, or why the refusal is considered reasonable, in writing to the employee.

Family leave returners

Forthcoming legislation will make it unlawful to dismiss a woman, while pregnant, and / or on maternity leave, and within six months of returning to work (with some exceptions to be confirmed).

Existing powers are to be strengthened in relation to dismissal in the period a person returns to work from adoption leave, shared parental leave, neonatal care leave and bereaved partners paternity leave, details to be confirmed.

Paternity and Parental leave

Statutory parental leave (unpaid) allowing parents to take 18 weeks of unpaid leave during the first 18 years of their child’s life) will become a day-one right, removing the requirement for one year’s continuous employment.

Statutory Paternity Leave will be a day-one right, removing the requirement for 26 weeks continuous employment.

Miscarriage bereavement leave

Mothers and their partners will be entitled to two weeks’ bereavement leave if they suffer a pregnancy loss before 24 weeks. This extends the current entitlement which applies only if a child dies or is stillborn after 24 weeks of pregnancy.

Harassment

There will be a new provision requiring employers not to permit harassment of employees by a third party.  In addition, employers must take ALL reasonable steps to prevent sexual harassment. This enhances the recent changes in October 2024.

Bereavement

There will be a day-one right to at least one week’s bereavement leave for employees. The circumstances under which this right can be exercised will be confirmed.

Fair Work Agency

A new enforcement body, the Fair Work Agency (FWA) will combine multiple existing agencies, in a single body to enforce employment rights. This will offer a single place where workers can seek help. This body will also be able to bring a claim to an employment tribunal in place of a worker if the worker decides not to pursue a claim. Details of how this would work are to be confirmed.

Tribunals

The time limit for bringing a tribunal claim will increase from three to six months.

Paid carer’s leave

The government confirmed it will review the current statutory Carer’s Leave entitlement, including the benefits of introducing paid carers leave. This review is one of the government’s longer-term delivery reforms.

National Living Wage

The government plan to update the National Living Wage to account for the cost of living, and remove the lower 18-20-year-old age bracket. This is part of a plan to move towards a ‘single adult rate’.

If you’re concerned about what these employment legislation changes from April 2025 mean for your business, please get in touch.

Labour’s Employment Rights Bill was published on 10^th October, the first stage of their Plan to Make Work Pay, in what’s been hailed by CEO of the CIPD as ”the greatest shift in employment legislation in decades”.

The Bill is the headline plan, there is still lots of detail missing, and some changes that were predicted, have not been included in this stage. The government plans to consult on the reforms next year, and any new legislation will not be implemented until 2026, at the earliest.

Here are the key things you need to be aware of:

Right to claim unfair dismissal will be a day one right, but with a caveat

Currently those dismissed with less than 2 years continuous service can’t claim unfair dismissal at an employment tribunal.  This requirement for 2 years service will disappear, and any employee would in theory have the right to make a claim.

However, there will be consultation on the use of a statutory probation period to allow for an initial judgement about a new joiner’s suitability for the role. Indications are this will either be a 6 or 9 month statutory probation period. The suggestion is that there will be a simplified process for dismissal during the statutory probation period, but there is still much detail to be provided prior to 2026 about how it will work in practice.

Employers will be thinking about how they can make their recruitment processes more stringent, so the right hiring decisions are made at the start, with some employers saying that they are less likely to take risks at the appointment stage, for example offering a role to a candidate who lacks experience but shows enthusiasm.

Flexible working will be the default, but with a caveat

Flexibility will be the default, unless the employer can prove it’s unreasonable, for a potentially valid reason, including the burden of additional costs, a detrimental effect on ability to meet customer demand, an inability to re-organise work among existing staff or recruit additional staff, and a detrimental effect on quality or performance; all of which are currently justifiable reasons for rejecting a flexible working request.

Currently employees with any length of service can request to work flexibly, and this request can only be refused on specific grounds – which are similar if not the same as those included as a valid reason for disallowing default flexibility. There is a change of emphasis and there will be a greater requirement for the employer to demonstrate why the role can’t be done flexibly as requested.

Employers will be thinking about how they manage the selection and onboarding processes so there is transparency about the employee’s requirement or desire for flexibility and what is reasonable, from the start.

Zero-hours contracts will stop, but with a caveat

Workers will have the right to be offered a contract with guaranteed hours, based on their regular hours worked over a defined period, expected to be the previous 12 weeks.  However, workers can opt to remain on a zero hours contract if they prefer.

This replaces previous legislation due to be implemented where workers could request a predictable working pattern if they had 26 weeks’ service.

Employers will be considering how they currently use zero hours contracts, if there’s an alternative contract (for example a fixed term contract), and review the hours their zero hours workers currently work to see how they may be impacted.

Parental rights will be strengthened with expanded leave entitlements

Employees will have a day one right to paternity, parental, and bereavement leave. Currently employees need 26 weeks of continuous service to qualify for statutory paternity and ordinary parental leave.

Bereavement leave will extend beyond the existing entitlement for parents who lose a child. Broader compassionate leave rights are expected but the details of how long and whether it will be paid remain uncertain.

Employers will be considering what the financial and practical impact of this change might be, looking at the demographics of their workforce, allowing for planning and mitigating risk.

Employees will get sick pay from their first day of illness

There will no longer be any ‘waiting days’ before an employee who is off work due to sickness will be eligible for SSP.  This pay will now be available from the first day of their absence, provided the employee meets the eligibility criteria. The criteria are also likely to be changed to make it more accessible for all employees, regardless of their earnings level.

Employers will be looking at their current sickness absence figures, and planning for the increase in costs of the additional 3 days SSP applicable.

There will be a ban on ‘fire and rehire’ practices, but with a caveat

The government will shut down the ‘loopholes’ that allow ‘fire and rehire’ and ‘fire and replace’ to continue. The practice of terminating an employee’s contract and rehiring them on different terms will be restricted, and these dismissals will be treated as ‘automatically unfair’, unless employers can evidence financial hardship as the reason for the change to terms and it was unavoidable. Employers will need to show such a change was a ‘last resort’ after thorough consultation and consideration of alternatives.

Employers will be considering what other changes they could make should there be a need to reduce costs across the business, before looking at forcing through changes to worker terms and conditions, so they can demonstrate it is a last resort.

Collective redundancy consultation and notification requirements will change

When an employer proposes making 20 or more redundancies at one establishment, there is a requirement to notify the DBIS and collectively consult.  The changes proposed mean there will be a requirement to collectively consult if the Company intends to make more than 20 redundancies, regardless of which establishment in the UK the losses will apply.

Employers will need to review their policies and internal procedures for establishing the need for collective consultation processes and plan accordingly should redundancies be necessary.

Requirement to prevent sexual harassment of workers will be extended

On 26 October, the Worker Protection Act 2023 came into force, introducing a new duty for employers to take ‘reasonable steps’ to prevent sexual harassment of their employees.  The Labour government has set out its intention to require employers to take ‘all reasonable steps’ to prevent sexual harassment, rather than just ‘reasonable steps’. It will also make employers vicariously responsible for protecting workers against harassment by third parties, a measure which was removed from the Worker Protection Act during the parliamentary process.

Employers will need to go ‘belt and braces’ with the preventative steps they can take in their business to prevent sexual harassment and tighten up how they can reasonably prevent harassment by a third party, as well as how they should respond to a complaint in light of this new liability.

Firms will be required to publish their intentions around improving equality

Large organisations (250+ employees) will have to develop and publish an equality action plan to show the steps they are taking in relation to gender equality.

 A new Fair Work Agency will crack down on unscrupulous employers

The government has announced it will establish the Fair Work Agency, combining existing enforcement functions around minimum wage, statutory sick pay, the employment tribunal penalty scheme, labour exploitation and modern slavery, to create a “strong, recognisable single brand” that will make it easier for individuals to know where to go for help. The Fair Work Agency will also cover a new area of enforcement – the holiday pay policy.

The Strikes Act and Trade Union Act 2016 will be repealed

The Bill will repeal the minimum service levels legislation introduced in 2023, and will repeal all but two parts of the Trade Union Act 2016.

The new government has set out plans to introduce new rights of workplace access for trade union officials and employer obligation to inform employees of their right to join a union.  The bill also brought forward measures to modernise trade union laws, including a reduction in the threshold for a recognition application from 10 per cent of the workforce.

Employers may want to introduce a ‘staff forum’ as a preventative measure to minimise the likelihood of union presence or recognition, or how they could engage proactively with unions in a positive way to build good employee relations. Contracts will need to be revised to include employee’s rights to join a union, and a communications plan to ensure the need to remind them will need to be devised.

Other plans outside of the Employment Rights Bill

The government has stated some of its commitments will be delivered outside of legislation, and they believe they can deliver more reform and therefore do not need all the commitments to be included in the bill.

This includes:

• Introducing the ‘right to switch off’, to prevent employers from contacting staff outside of their working hours.
• expanding the Equality (Race and Disability) Bill making it mandatory for large employers to report their ethnicity and disability pay gap.
• consulting on single worker status, aiming to transition towards a simpler two-part framework for employment status
• reviewing parental leave and carers’ leave systems

As a reminder, Labour’s Employment Rights Bill is subject to consultation as well as the usual passage through the House of Commons and the House of Lords, before it will become law in 2026, so there is plenty of time to prepare. More information is available here.

If you need help preparing, please get in touch.

When you hire a new team member, there will usually be a probationary period. This is a time during which both parties can establish if hiring them was the right decision. It’s a fixed amount of time, so proactively managing probationary periods is important. If it applies, details of a probationary period must be included in employment contracts. Wording should include the duration, the right to extend, and areas of their performance and conduct which will be considered.

Many companies have rebranded the probationary period, using terms like ‘Introductory Period’ or ’90-day journey’. They mean the same thing; Was hiring the new joiner the right decision?

Probationary periods ensure that an employee’s expectations are managed. They understand that what they do during that time matters and can affect their ongoing employment.  If the end of a probationary period goes left unchecked, the default position is that they have successfully passed.  This may result in changes to their entitlements and notice period, and it’s more difficult to address those issues after that.

Areas to consider

When it comes to assessing whether the hiring decision, it shouldn’t just be about technical ability in their field of expertise. It’s about the behaviour they demonstrate, their understanding of the business or their desire and enthusiasm to learn and make a positive contribution. In an SME one person can make a big difference to the team dynamic and the success of the business. Therefore, it’s important that you use the probationary period to determine if you made the right decision. The probation period is also about the employee deciding if this is the right place for them. It’s important that you engage in two-way dialogue about how they’re getting on.  The probationary period provides an opportunity to ‘course correct’ if things doing seem to be going to plan, either for you, the team or the new hire.

Tips for managing a successful probation

Managers need to spend time proactively managing probationary periods. It should be expected that more management time will be spent on this person during that time. The time you spend is an investment which will hopefully lead to a direct return.

So what should managers be doing during their new hire’s probation?  Here are our top 10 tips:

1. Clear job information: Make sure all the relevant information is clearly communicated during the recruitment process. That way there is no ambiguity about the role and what it involves
2. Effective induction: Ensure you have an effective induction programme. This should include information about their job, the team, the business and the way it’s structured. It should also include where they fit in, the values of the company and how you expect employees to behave at work
3. Introductions to key people: Ensure the new hire is introduced to key people on day one or at least during their first week. That way they know where to go for support if they have questions. No-one can know everything from day one
4. Meet regularly: Meet with the new hire 1-1 regularly and frequently, and make sure it’s diarised and a written note is taken and shared with them in a timely way. In these meetings you can ensure they know what they should be doing. You can provide regular feedback about how it’s going, both from the perspective of their work, as well as their behaviour. For example if their work has been accurate, or you have noticed they have been late multiple times during their first week / month. Flag what you have noticed, ask how they feel it’s going and if there is anything they’re not sure about
5. Set SMART objectives: Set some agreed objectives for the first month, and / or overall for their first 3 or 6 months. Progression towards meeting the objectives should also become an area of feedback in your weekly meetings, and follow up on email with the key points
6. Be accessible and approachable: Have ad hoc informal catch-ups with the new hire on the ‘shop floor’. Ensure your new hire has the opportunity to ask any questions they may have
7. Flag issues and concerns: If there are issues, flag them sensitively, but honestly. Explain why it’s a problem, and what you expected instead, or better still, ask them how they could have avoided the issue
8. Timely feedback: Ensure your feedback is given in a timely way. If something serious is wrong, don’t wait for the next 1-1 meeting
9. Preparation for meetings: Provide feedback in a confidential setting away from colleagues to protect their dignity. Prepare feedback properly to ensure it’s objective and delivered thoughtfully
10. Act prior to the end of probation: Make sure you meet with the new joiner before the end of the official probationary period to confirm formally if they have passed their probation. Alternatively, probation can be extended if there are ongoing issues which need to be addressed. Equally if there are too many issues you may have to deliver the news that the probation has not been successful. (i.e. you give notice to terminate their employment)

As people managers it’s in your interests to do all you can to set this person up to succeed. This avoids unnecessary additional time and resource in sourcing a new hire twice in a short period of time. That said, sometimes things don’t work out. If that’s the case, dealing with it promptly and decisively will save time and money.

Recruitment can be expensive and time-consuming, so making sure your initial recruitment process was appropriate will help.  Read our previous blog here about recruitment if you want more tips for successful recruitment.

If you would like support managing probationary periods, or you have an issue with a new hire, get in touch.