Employment Law: Spring 2025 update

In this article, Claire Taylor-Evans, Partner and Jessica Clough, Chartered Legal Executive, in the Employment team take a look at recent and upcoming changes to employment law for employers to be aware of for in early 2025.

Legal changes

Sexual harassment

The latest changes to sexual harassment law came into force on 26th October 2024. This introduced a requirement on employers to take reasonable steps to prevent sexual harassment occurring in their workplaces and to their staff.  As part of this duty, employers are now required to take positive proactive reasonable steps to prevent sexual harassment occurring. Simply providing some sexual harassment training to staff will not be sufficient to avoid liability, instead the employer will need to show that they have conducted a comprehensive risk assessment to anticipate risks of sexual harassment in the workplace and taken steps to mitigate these risks, which is likely to include updating policies, providing bespoke training for managers, staff and leaders and taking steps to ensure that staff feel they can “speak up” and report complaints and that those complaints will be taken seriously.  We can assist with risk assessments and training. 

Fire and rehire

Since July 2024 an employment tribunal has had the power to uplift compensatory awards by 25% where an employer unreasonably fails to follow the ACAS Code on Dismissal and Re-engagement. The Code, which came into force in July 2024, places a requirement on employers to consult with employees before introducing changes to employees’ terms and conditions and seeks to prevent employers from using “fire and rehire” as a tactic except as a last resort. However, from the 20th January 2025, tribunals have had the power to award up to 25% uplifts on protective awards where there has been a failure to comply with collective redundancy obligations when seeking to change terms and conditions of employment. Compensation for protective awards are up to 90 days gross pay per employee, so an additional 25% will place a considerable additional financial burden on employers.

Neo-natal care leave

After being on the statue books since 2023, it was finally announced in January, that the statutory right to Neo-Natal Care Leave will be coming into force on 6th April 2025.  This will provide parents whose child requires neo-natal care of 7 continuous days or more (commencing within 28 days of the birth) to take up to 12 weeks’ neo-natal care leave and pay. This right will be in addition to existing leave and pay entitlements, such as maternity or paternity leave. The right to take leave will apply from day 1 of employment, but the right to statutory pay is expected to require the employee to have 26 weeks’ continuous service (as with other statutory family friendly rights).

Changes to pay, statutory rates and tax from April 2025

National minimum wage changes

From 1st April 2025, national minimum wage will be increasing as follows:

• Increase from £11.44/hour to £12.21/hour for those 21 and over.
• Increase from £8.60/hour to £10/hour for those 18 – 20.
• Increase from £6.40/hour to £7.55/hour for apprentices and those under 18.

If the employer sponsors any migrant workers, their rates of pay will also need to increase in line with these rates.

Statutory rates changes

From 1st April 2025, statutory rates will be increasing as follows:

• Statutory sick pay will be increasing from £116.75/week to £118.75/week.
• A weeks’ pay at statutory rate for the purposes of maternity, paternity, adoption and shared parental leave will be increasing from £184.03/week to £187.18/week.

Awards changes

We are also expecting to see the usual annual increase in tribunal awards limits and redundancy pay in April 2025, although the figures for these have not yet been published, but we expect them to be announced later this month or in March.

Tax changes

From 6th April 2025 there will be an increase in employer’s National Insurance Contributions NICS from 13.8% to 15% of employee’s earnings. The threshold at which an employer has to start paying employer NICS will also be decreasing from £9,100 to £5,000/year. These changes have been unpopular with many employers, as the resulting increase in staffing costs occurs at a time when their resources are also being squeezed by other costs such as the increase in NMW and in business rates, as well as the anticipated changes to unfair dismissal rights which have been proposed. However, this is something the current government has stated it is committed to as a means to improve public finances and grow the UK economy.

Gender pay gap reminder

Don’t forget the next deadline for submitting gender pay gap reports is 4th April 2025. The requirement to submit a gender pay pap report applies to employers who had 250 employees on the snapshot date of 5th April 2024; so do check that you have not crept over the threshold.

Steps for employers to take

Employers should look to:

• Update their handbooks and policies to reflect the upcoming changes. 
• Ensure they have undertaken a risk assessment and put in place steps to discharge their liability under the new duty to prevent sexual harassment legislation.
• Ensure HR teams and managers are trained on the latest changes to avoid potential legal issues.

How we can help

If your business needs help and advice on any of the topics above, or you wish to discuss how we can assist with updating handbooks, conducting lawyer led sexual harassment risk assessments, providing training for managers /HR teams, or your Gender Pay Gap reporting, email us. Please also see our webinar which discusses all of these changes.