What are the key changes to employment law in 2025?

Labour’s new Employment Rights Bill will bring with it several key changes to employment law in 2025, introducing twenty-eight significant reforms. One of the most significant reforms has already begun to take effect from as early as April this year, with the National Living Wage (NLW) and National Minium Wage (NMW) increasing. For example, for those aged 21 and over, the NLW has increased from £11.44 to £12.21 per hour. However, there are also other key changes that will likely not begin to take effect until at least 2026, though it is still important to be aware of these early on.

Changes to Statutory Sick Pay (SSP)

Currently, an employee must have been ill for more than three days in a row and earn an average of £123 per week, as per the lower earnings limit. Under the Government’s new proposals, the current waiting period will be removed so SSP will be paid from the first day of absence instead. The lower earnings limit will also be removed to allow all employees eligibility to recover for their sickness, regardless of their income.

Ending Zero-Hour Contracts

Currently, there is no obligation for an employer to provide an employee with any guaranteed or reasonable hours, nor provide any compensation should a shift be cancelled. Under the Government’s new proposals, the following changes could be introduced:

• Guaranteed Hours – Employees who routinely work regular hours will be able to request a contract reflecting those hours, based on their work patterns over a reference period.
• Compensation – When an employer cancels or rearranges a shift on short notice, these employees will gain a new right to compensation, being able to turn to the employment tribunal for assistance and possibly be awarded further compensation.  

Unfair Dismissal & Fire and Rehire

The Government’s new proposals will make it illegal to fire and rehire employees who refuse contractual changes unless their business is on the brink of collapse. The law will examine how well an employer consulted with their employees and whether they offered their employees any compensation for accepting contractual changes, to decide whether a dismissal is fair.

Day-One Rights

Some entitlements granted to employees are now set to be converted into day-one rights, including:

• Unfair dismissal
• Statutory probationary periods
• Paternity and parental leave
• Extended scope of bereavement leave

Overall, Labour’s new Employment Rights Bill will introduce several reforms to employment law starting from this year, aiming to improve employees’ rights and reshape employer’s obligations.

Summerfield Browne Solicitors can help you with your employment matters. Please do not hesitate to reach out to us for assistance or advice.