Alex Hodson, Senior Associate at Redmans Solicitors, elaborates on new laws businesses need to know about, and shares how they can ensure compliance in this ever-changing employment law landscape.

2024 has been transformative when it comes to UK employment law. With Labour coming into power, new laws are being drafted, approved and implemented with a keen focus on enhancing workers’ rights and overall workplace standard. Now, new legislations are being implemented this year and next, that could have a significant impact on businesses.

Rise of family-friendly employment laws in 2025

Marking a strong shift towards family-friendly employment laws is the introduction of the Neonatal Care (Leave and Pay) Act 2023. This will come into effect on 6 April 2025 and will provide eligible parents up to 12 weeks of paid leave.

Businesses should be mindful that although the leave is a “day one” right, Neonatal Care Pay mirrors maternity pay entitlement. This means, the employee will have to be employed continuously for at least 26 weeks and meet certain income thresholds to be eligible for pay.

As legislations take a year to be implemented, it is also expected that the Paternity Leave (Bereavement) Act 2024 will take effect this year. Upon implementation, leave will be allowed, from the first day of employment, if the birth or adoptive mother passes away shortly after the child’s birth.

This new Act will require businesses to review paternity leave policies as it will remove the 26week service requirement for paternity leave. However, despite having received Royal Assent in May 2024, no set enforcement date has been provided.

Improving workplace standards with new laws

Employers, by now, are aware of their duty to take ‘reasonable’ steps to prevent sexual harassment in the workplace. However, with the law only coming into force towards the end of 2024 in October, caselaw is yet to develop. It is advisable for businesses to proactively review policies and workplace standards from now on to ensure compliance.

Labour also intends to amend the duty to ensure employers take all reasonable steps to prevent sexual harassment, including sexual harassment by third parties. This could impose greater obligations on employers to prevent sexual harassment, making it incredibly difficult to defend such claims if they fail to comply.

Additionally, the draft Equality (Race and Disability) Bill is anticipated to come in this year as well. When implemented, this bill will extend equal pay rights to disabled individuals and ethnic minorities which is a positive shift for employees, as current laws only provide equal pay based on sex.

For organisations over 250 employees, this bill will require businesses to mandatorily report ethnicity and disability pay gaps.

Employment law changes in 2026

The year 2026 will provide the biggest shake up in employment law in our recent history in the form of the Employment Rights Bill. It is imperative that businesses, especially ones that have a large workforce, make themselves familiar with the proposed changes that is currently making its way through Parliament.

These changes may need businesses to transform their organisation, pushing them to be ready so as to avoid any risk of liability in the future.

Employment Rights Bill

One of the most talked about Bill’s in the recent years, it is frequently reported on due to it’s all encompassing nature. This highly anticipated Bill will not just enhance workers’ rights but will bring significant change to organisations.

Day one unfair dismissal rights

Since 2012, employees have required two years’ service to bring a claim for unfair dismissal. However, the Employment Rights Bill will change this to provide employees the right to bring an unfair dismissal claim from day one of their employment commencing.

Expected to apply from August 2026, it is possible that some wording may be incorporated into the Bill concerning probationary periods and dismissals. Employers are encouraged to keep a close eye on this because it will impact all businesses, no matter the size of the organisation.

Statutory sick pay

The current position requires an employee to be absent for a minimum of four days before they are entitled to statutory sick pay (“SSP”). The proposed change in the Employment Rights Bill is to provide all workers with SSP from their first day of sickness absence. It is also intended to remove the minimum threshold of earnings to be entitled to SSP.

Flexible working request  

Since 6 April 2024, making a flexible working request has been a day-one right. However, as many know, an employer can reject the request if it is for one of the prescribed reasons under the legislation.

The reasonableness of the employer’s decision is generally not called into question; however, the Employment Rights Bill intends to change this by ensuring that the decision to reject a flexible working request is reasonable and aptly communicated. Employment tribunals are likely to carefully scrutinise the reason of the rejection going forward.

‘Fire and rehire’ practices

Whilst Labour had previously promised that fire and rehire practices would be entirely scrapped, businesses should know this is not the case. The possibility of continuing with firing and rehiring will be allowed, but in severely limited circumstances.

One of those circumstances is if a business is financially struggling, and firing and rehiring is required to mitigate the effect of the business’s ability to continue operating. However, irrespective of the circumstance, businesses should first reasonably engage with employees to discuss contractual changes before resorting to fire and rehire.

Failure to be able to demonstrate this could result in a claim being brought by the employee for being automatically unfairly dismissed.

Collective redundancies

Currently, the law says that in a large scale redundancy of 20 or more employees in one establishment, the employer must conduct consultations with representatives of the affected employees and notify the Secretary of State.

This becomes a loophole for employers who want to conduct mass redundancies as they can spread the dismissal across multiple locations, without needing to inform the Secretary of State. However, with the Employment Rights Bill, the ‘one establishment’ wording is likely going to be removed. Instead, the number of employees across the entire business will be looked at to determine if collective consultations are required.

With businesses being unable to spread the redundancies across locations, all large scale redundancy processes will likely trigger collective consultation to encourage formal and structured redundancies.

Future of gig economy workers

Labour pledged to entirely scrap the use of zero-hour contracts, but after much resistance, this is not going to be the case. The bill will, however, have the effect of reducing the use of zero hour contracts.

In its current draft, the Bill is going to implement some complex provisions regarding offering guaranteed hours contracts, the duty to provide reasonable notice of shifts, compensation for cancelled or moving shifts, and the right to not be automatically unfairly dismissed or suffer a detriment.

Reviewing policies throughout 2025

Staying on top of policies through the year will ensure your business is not just ready for these imminent changes but can avoid future litigation that may arise as well. Since these changes may cause a strain on employers, it is advisable to start preparing well in advance.

As a starting point, businesses should review their current policies on family leave to ensure compliance with the Neonatal Care (Leave and Pay) Act 2023 and the proposed new Paternity Leave (Bereavement) Act 2024. It would also be sensible to:

• Review employment contracts and policies to ensure that any reference to probationary periods is clear, and staff are fully trained on managing employees on probation
• Review recruitment practices to ensure that the best candidates are appointed to avoid any risk or difficulties during the probationary period.
• Draft and amend policies in readiness for the new changes to flexible working requests and statutory sick pay.
• Review training and policies related to sexual harassment, especially in the context of third parties.
• Conduct a pay audit across the business to ensure that all employees are paid equally, irrelevant of sex, disability or race.
• Seek legal advice if considering mass redundancies of 20 or more employees

Alex Hodson is a Senior Associate at Redmans Solicitors.

Photo by Caio on Pexels.