With the Employment Rights Bill (ERB) now going through the legislative process, we will keep you informed of key stages as the Bill evolves. It is clear that many of the provisions of the ERB will not come into force in 2025, regardless of when the Bill becomes law. With several consultations having closed before Christmas, we can expect to see the Government's Responses, further debates and modifications to the ERB as it makes its way onto the statute book.
The measures in relation to dismissal and re-engagement have received particular attention as problematic so we can expect some developments there. The proposed right to a regular contract for casual workers has also come in for a lot of criticism, with commentators highlighting the difficulty of determining the correct reference period, as well as highlighting the difficulty for employers if they do not have a constant supply of work.
Aside from the ERB, what other developments are in the pipeline? Here are a few other things on the horizon for 2025.
Compensation uplift for breaches of Code on dismissal and re-engagement
From 20 January, where a claim is brought by any affected employees or their representatives for a failure to comply with collective consultation requirements employment tribunals will have a new power to increase or reduce any protective award for non-compliance with collective consultation requirements by up to 25%. This includes any unreasonable failure to comply with a relevant Code of Practice, including the Code of Practice on Dismissal and Re-Engagement which was introduced last July and previously discussed by us here. Given that awards for non-compliance with collective consultation obligations can be for up to 90 days pay per affected employee then any uplift could significantly increase the potential costs. Employers will need to ensure that they comply with the Code if it applies when carry out a dismissal and reengagement process with their workforce. Any employment tribunal awards made under the Code prior to this date, won't be subject to the new potential uplift.
Neonatal care leave and pay from 6 April 2025
This 2023 Act, passed by the previous Government, will come into effect on 6 April this year. Neonatal care leave will provide parents with up to 12 weeks of paid leave if their baby is admitted to hospital up to 28 days old and who have a continuous hospital stay of seven days or more. The right to take neonatal leave will be in addition to other maternity, paternity, and shared parental leave entitlements. Much of the detail of this right will be set out in regulations, which subject to Parliamentary approval, will also take effect from 6 April. To qualify an employee must be employed for a minimum of 26 weeks prior to the leave being requested and be earning an average of at least £123 a week. This mirrors the entitlement to maternity pay. The leave must also be taken in the first 68 weeks of the baby’s birth. Parents taking neonatal care leave will have the same employment protections as those associated with other forms of family-related leave which will include protection from dismissal or detriment as a result of having taken or applied for the leave. When neonatal care leave comes into force, employers should introduce a policy reflecting the new statutory rights, to make their staff aware of them.
Consultation on draft Code of Practice on right to switch off in 2025
The Government's 'Plan to Make Work Pay' stated that a new 'right to switch off' would be introduced, mirroring similar initiatives in Ireland and Belgium. This measure would aim to provide employees with the right to disconnect from work outside of working hours. However, this right was not outlined in the Employment Rights Bill. Rather, the Government's 'Next Steps to Make Work Pay' document outlined that it would introduce this policy through a statutory code of practice. However, it doesn’t specify a date for its introduction but it is expected that a consultation on the new code of practice will be issued in 2025.
Statutory rate change increases in April 2025
The statutory rates of statutory maternity pay, maternity allowance, statutory adoption pay, statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay will increase from £184.03 to £187.18 per week. The lower earnings limit will increase to £125 from £123.
From 1 April 2025 the hourly rates of the national minimum wage will be £12.21 for individuals aged 21 and over (an increase from £11.44), £10.00 for 18–20-year-olds (an increase from £8.60), £7.55 for 16–17-year-olds and apprentices (an increase from £6.40).
Statutory sick pay will increase from £116.75 to £118.75 per week.
Any increase in the statutory cap on a week’s pay used for calculating the basic award for unfair dismissal and statutory redundancy pay is due to be announced in early 2025.
A reminder about holiday pay for irregular hours and part-year workers
A reminder that rolled up holiday pay is now lawful for irregular hours or part-year workers. The new rules apply to holiday years commencing on or after 1 April 2024, which for those with holiday years which run from Jan to December, will be effective from January 2025. Where rolled up holiday pay is used, the employer must show wages and holiday pay accounted for separately on a wage slip.
