2025 UK Employment Law: What Employers Needs to Know

Following the King Speech and the Labour Government installation there are plans to introduce several ambitious changes in employment law possibly by effective from 2025, focusing on improving worker protections and ensuring fairness across industries. These updates would bring new responsibilities for HR departments and employers, emphasizing the importance of staying compliant with the law. Here’s an overview of the changes that could impact employment in the UK in the near future. We have listed down the key items employers need to know.

Dismissals

One of the most notable novelties is the right not to be unfairly dismissed from day one of employment, a shift from the previous two-year qualifying period. This change provides immediate job security for new employees, safeguarding them from unfair terminations.

Key points:

• Immediate protection from unfair dismissal for new employees.
• Restrictions on ‘fire and rehire’ practices, which prevent employers from dismissing staff only to rehire them under less favorable terms.

Redundancy Consultation

. Now, redundancy thresholds are based on the entire company rather than just individual locations. This change ensures that all employees affected by layoffs are included in the consultation process.

Key points:

• More inclusive redundancy consultations.
• Thresholds now apply across the entire business, offering broader protection for employees.

Zero-hours Contracts

The plan is to ban exploitative zero-hours contracts  and replace them with ‘average-hours’ contracts. This gives workers more stability, ensuring they receive a minimum number of hours based on their previous work history.

Key points:

• Ban on exploitative zero-hours contracts.
• Introduction of average-hours contracts to provide predictable work schedules.

Flexible Working

The right to request flexible working would be expanded, making it easier for employees to ask for flexibility in their schedules. A new ‘right to disconnect’ would also be introduced, allowing workers to switch off from work outside of regular hours, to support their mental health and work-life balance.

Key points:

• Enhanced right to request flexible working hours.
• Introduction of the ‘right to disconnect’ to prevent overworking.

Worker Status

The government aim is to simplify employment categories by moving towards a single worker status. This will make it easier to understand employment rights and provide gig workers and the self-employed with stronger protections.

Key points:

• Shift towards a single worker status, simplifying employment categories.
• Gig workers and the self-employed benefit from enhanced rights.

Pay & Tax

The National Living Wage will likely see a further increase, which will benefit low-income workers. The government is planning on putting an end tounpaid internships to prevent companies from exploiting young workers and career switchers.

Key points:

• Increases in the National Living Wage.
• Ban on unpaid internships to protect workers from exploitation.

Diversity & Discrimination Reporting

Companies could be required to report on pay gaps based on ethnicity and disability, in addition to the gender pay gap. These reports help ensure fair treatment of all employees. Gender pay gap reports will also include outsourced workers.

Key points:

• Mandatory ethnicity and disability pay gap reporting.
• Gender pay gap action plans now cover outsourced workers.

Employee Representation

The plan provides to simplify the process for trade unions to be recognized, making it easier for employees to organize and push for better working conditions. Trade unions will also have easier access to workplaces to support employees.

Key points:

• Simplified trade union recognition process.
• Easier access for unions to workplaces to support employees.

Family Rights

Labour intends to strengthen the protections for employees returning from maternity , helping to prevent unfair treatment. Bereavement leave has also been introduced, giving employees time to grieve without worrying about their job.

Key points:

• Maternity returner protection to prevent discrimination.
• Introduction of bereavement leave to support grieving employees.

Sickness & Wellbeing

The plan intends to reform thestatutory sick pay and make it easier for workers to access support when ill. Best practice guidelines will be introduced for managing terminal illnesses, encouraging compassionate treatment of affected employees.

Key points:

• Statutory sick pay reforms for better access.
• Best practices for handling terminal illness in the workplace.

Enforcement

To ensure these new laws are followed, the government wants to extend the time limits for making tribunal claims and set up a new enforcement body to oversee employment law.

Key points:

• Extended time limits for tribunal claims.
• Creation of a new state enforcement body for employment law.

Artificial Intelligence

The government is reviewing how AI and surveillance technologies are used in the workplace. The aim is to balance improving work efficiency with protecting worker privacy.

Key points:

• Consultation on AI use in workplace surveillance.
• Balance between AI efficiency and worker privacy.

Let Parakar Guide You!

The recent changes in UK employment law are designed to create a more equitable and inclusive workplace. With stronger protections for employees, HR professionals and employers must stay up-to-date on these laws to ensure compliance

If you have any questions, feel free to reach out to our local experts. We are happy to help you!