Since they came to power last July, the Government has been implementing a wide range of changes to employment law, particularly in upgrading employee rights. New employment law bills are expected in 2025 and into 2026. Some of the biggest updates are detailed here, and what employers will need to put in place for their workforce.
The Employment Rights Bill
The Employment Rights Bill, introduced in October 2024, proposed a wide range of changes to workplace rights. These rights included protection from unfair dismissal from day one, restrictions on firing and re-hiring employees, mandatory guaranteed hours, and third-party harassment liability for employers. Most of these changes will not come into effect until 2026, but some may arrive sooner. It is recommended that employers conduct comprehensive reviews of their employment contracts and policies, especially those relating to flexible working, family leave, and unfair dismissal. This will help employers to be prepared ahead of the bill coming into effect. Additional training for personnel staff will be necessary to ensure the new legislation is implemented effectively.
Neonatal Leave
The 2023 Neonatal Care (Leave and Pay) Act granted up to 12 weeks’ paid leave for parents whose babies require neonatal care. This leave is in addition to existing maternity or paternity entitlements. Although this bill has been passed, the right is dependent on further regulations expected later in the year. Employers are advised to create a policy to reflect these rights and details of how staff can request this form of leave.
Holiday pay
The new rules will affect workers with irregular hours, including those on zero-hour contracts. These employees will now accrue holiday at 12.07% of hours worked, rather than receiving the standard 5.6 weeks’ leave. Employers are also permitted to “roll up” holiday pay, adding 12.07% on top of wages, as long as it is itemized on pay slips. This will especially impact businesses with a holiday year that starts in January. This should bring clarity for employers who manage flexible workforces, but they should have a comprehensive policy in place, so employees and employers know what they are entitled to.
E Visas – Digital-Only Proof of Right to Work
From January 2025, physical visa documents were replaced by EVisas. With these new rules, employees must register for a UKVI account, and employers must use the “View and Prove” online service for right-to-work checks. This digital transition includes replacing biometric residence cards and vignette stickers. This should streamline immigration checks if employers update their internal processes and monitor updates from UKVI throughout the year.
Statutory Sick Pay Reforms
Under the new rules, the lower earnings limit for Statutory Sick Pay (SSP) will be removed, allowing employees earning under £123 per week to qualify. SSP will also be payable from the first day of sickness. Employers should ensure payroll systems are updated accordingly. As more employees will be eligible for this, it is important that employers are aware of the additional costs they may face.
Equality Bill: Race and Disability Pay Gap
As an extension of the current gender pay rules, the Draft Equality (Race and Disability) Bill is being developed to review the pay gap for employees of different races or who have disabilities. It aims to relieve workplace inequality. The bill is expected to enter consultation soon.
The new employment law changes will have a major impact on employers and employees alike. If you need help with an employment matter, please contact us for more information on 01492 874774.