Key employment law changes in 2025
2025 has certainly been an interesting year for employment law. The Employment Rights Bill has pulled much of the focus since it was introduced in October 2024, but other important developments this year include:
- Significant increases to National Minimum Wage, National Living Wage and Employer NICs, which saw a significant impact for businesses.
- The Neonatal Care (Leave and Pay) Act 2023 came into effect from 6 April 2025, introducing the right for eligible parents to receive up to 12 weeks paid leave for newborns requiring neonatal care.
- Practical changes to the collective redundancy consultation process involving a move to digital HR1 forms.
- An increase to the length of the ACAS early conciliation period from 6 weeks to 12 for new claims to allow parties more time to explore settlement before being able to submit a claim to the employment tribunal.
- Restrictions on non-disclosure agreements so that victims of crime are not prevented from making permitted disclosures relating to criminal conduct, including disclosures to police, legal professionals, victim support services, regulators and the victim’s close family, for the purposes of obtaining support.
However, there has been no escaping the significant changes being proposed by the Employment Rights Bill, which has now passed! Royal assent is expected imminently.
All attention has been on the changes and the Bill’s passage through Parliament, which has seen significant amendments being made to the government’s original proposals. This has included a major U-turn by the government on its manifesto pledge to make unfair dismissal protection a day-one right, in favour of a 6-month qualification period, and, very recently, the removal of the compensation cap for unfair dismissal claims, which came out of nowhere.
The government has committed to launching consultations connected with the changes under the Employment Rights Bill and 2025 has seen the first batch of these being commenced with consultations on matters including bereavement leave, enhanced dismissal protections for pregnant women and new mothers, the duty to inform workers of their right to join a trade union and trade union access (with the latter two consultations closing on 18 December 2025).
What to expect in 2026
2026 is unsurprisingly going to be all about the (soon to be) Employment Rights Act 2025! The level of change is unprecedented, and organisations will be dealing with implementing changes coming into effect in 2026 and preparing for changes coming in 2027.
The government published a roadmap of when changes are likely to occur earlier in the year. We have set out some of the key ones affecting businesses below.
Changes expected to take effect on Royal Assent (or closely afterwards)
- The repeal of the Strikes (Minimum Service Levels) Act 2023 and the great majority of the Trade Union Act 2016 (some provisions will be repealed at a later date). This will remove many restrictions placed on industrial action and picketing, including minimum service levels in particular sectors such as health, transport and education.
- Simplifying industrial action notices and industrial action ballot notices, including reducing the notice of industrial action required to 10 days (from 14), removing the requirement to disclose the number of employees in each category that are expected to take part in industrial action and extending the industrial action mandate to 12 months (from 6).
- Widening of protections for employees taking part in industrial action to include protection against detrimental treatment, not just dismissal.
Changes expected to take effect from April 2026
-
An increase to the collective redundancy protective award, doubling this from 90 days to 180 days.
-
Removing service requirements to provide a ‘day 1’ entitlement to paternity leave and unpaid parental leave. Employees will also no longer forfeit paternity leave if they take a period of shared parental leave first.
-
Enhancing whistleblowing protections, making disclosures about sexual harassment a protected disclosure for whistleblowing purposes.
-
Changes to statutory sick pay to remove the lower earnings limit and waiting period so that statutory sick pay will be payable from day 1 of sickness.
-
Simplifying the trade union recognition process and introducing the option of electronic balloting. The 10% threshold for the CAC to accept a recognition application will be reduced to somewhere between 2-10% (to be confirmed), a trade union will no longer have to demonstrate that it has the support of the majority of the bargaining unit to succeed in an application and the 40% threshold for support currently required in the recognition ballot will be removed. The government is currently consulting on electronic balloting (the consultation closes on 28 January 2026).
-
The establishment of the Fair Work Agency to help regulate employment law, including areas such as breaches of national minimum wage, statutory sick pay and holiday pay requirements. Whilst it is expected to be established in April, it is not known when its enforcement powers will come into force.
