Law at Work: hot topics

Quick read

Rates and limits increase

Statutory rates and limits, for the purposes of calculating a statutory redundancy payment, basic award and compensatory award for unfair dismissal purposes, will increase as follows form 6 April 2025:

the cap on a week’s pay for statutory redundancy pay calculations will increase from £700 to £719
the limit on compensatory awards for unfair dismissal will rise from £115,115 to £118,223.

This will be relevant for dismissals on or after 6 April 2025.

Financial services update

The Financial Conduct Authority (FCA) has indicated a change of intention regarding future policy, in a letter to the Government on 11 March 2025. A previous proposal to move towards greater transparency, when investigating firms regulated by the FCA or PRA, has been dropped.

Following feedback from stakeholders about the sensitivity of investigations, the FCA has decided to stick with its current approach of only publicising investigations in exceptional circumstances, when it is in the public interest. However, it will confirm the existence of an investigation where a third party makes the matter public. In the letter, the FCA notes the progress it has made in speeding up turnaround time for investigations, with a recent average being 16 months rather than 42 months.

On its plans for Diversity, Equity and Inclusion, having carried out a consultation into stepping up measures to improve diversity and inclusion, including on data gathering and monitoring obligations, the FCA has now confirmed it has no plans to take the work further. This has been done "in light of the broad range of feedback received, expected legislative developments and to avoid additional burdens on firms at this time".

Finally, the FCA has indicated that the long-awaited amendments to rules on non-financial misconduct, will be published in June.

EU Forced Labour Regulation and UK's Modern Slavery Act: developments

The EU Forced Labour Regulation (FLR) was adopted late last year and applies from 14 December 2027. It contains obligations for Member States defining the tasks of the authorities and how they must ensure compliance. When in force it will prohibit organisations from placing and making available on the market and exporting products manufactured using forced labour. Our international colleagues have provided a summary on who will be impacted, possible sanctions and how to prepare for compliance.

The UK's equivalent to the FLR is the Modern Slavery Act 2015 (MSA). The MSA requires all businesses with UK operations and revenues of over £36 million to publish an annual statement disclosing their approach to forced labour on their website and the steps they have taken to ensure slavery and human trafficking are not taking place in any part of their business or supply chains.

In December last year the UK government published its response to a House of Lords Committee which had reviewed the effectiveness of the Modern Slavery Act 2015 and which made certain recommendations for improvement to the statutory framework. We summarised these in January's Law at Work.

Separately, in their report published earlier this month, the Business and Trade Committee recommend, by way of tightening up the Employment Rights Bill, the need for the Government to review and update the MSA to make modern slavery statements mandatory, to introduce penalties and to 'name and shame' for companies not disclosing action plans. The Committee also mentions seeking to align the UK with similar global legislation on modern slavery and human rights.

To check whether your organisation needs to comply with the UK's MSA and produce a modern slavery statement, our free assessment tool can be accessed here.

Call for evidence on hybrid working

The House of Lords Committee on Home-based Working has published a call for written evidence for its inquiry into the effects and future development of remote and hybrid working in the UK. The Committee will then report by 30 November this year. It is seeking submissions on topics including:

on how the challenges and opportunities of remote and hybrid working for workers might vary depending on a worker’s characteristics, and the impact of remote and hybrid working on individual physical and mental health
the challenges and opportunities of remote and hybrid working for employers and balancing employer and worker needs
why some employers have implemented back-to-office mandates, while others continue to support hybrid or remote working
how productivity can be more accurately measured and defined so that meaningful comparisons can be made between different organisations, and the data available on the prevalence and effects of remote and hybrid working. And how such data might differ from that of other countries
key policy and/or legislative changes the UK Government should make in with regard to remote and hybrid working.

The deadline for making submissions is 10:00 on 25 April 2025.

Consultation on mandatory ethnicity and disability pay gap reporting

The Government has launched a consultation on proposals to introduce mandatory ethnicity and disability pay gap reporting for large organisations (those with 250 or more employees). The Government has made a commitment to introduce the Equality (Race and Disability) Bill before the end of this Parliament, following an announcement in the King's Speech in July 2024.

The consultation asks 33 questions about how the legislation should be framed and seeks responses from employers, trade unions, ethnic minority groups and disabled people. The consultation document indicates that the Government would like, as far as possible, to mirror the approach taken with regard to gender pay gap reporting obligations, so as to minimise the burden on business. Notably, the proposals under consideration would require employers to set out in an Action Plan how to remedy any gap.

However, there are some aspects that will be unique to disability and ethnicity reporting, for example for the data to be meaningful, it may be desirable to require data on who has not responded so as to get a meaningful picture of the data. Also, given the need to preserve the confidentiality of individuals with regard to their disability or ethnicity status, it may be appropriate to require a minimum threshold group of 10 employees in respect of whom there should be reporting as a group. Because not every workplace will have large numbers of different groups of people with a particular ethnicity or a particular disability, it may be that a binary comparison (for example, comparing White British employees with ethnic minority employees) will be more effective than a granular approach.

The deadline for responding is 10 June 2025.