Posted Date: 14th January 2025

Consultations on the employment rights bill continue

The employment rights bill was published in October 2024, and included 28 reforms as part of the Labour government’s Plan to Make Work Pay, the main changes being:

• Changing the qualifying period for claiming unfair dismissal, from two years to day one. Although it is likely that employees could be subject to a probationary period, of up to 9 months, and during this time they could be dismissed more easily
• The lower earnings limit for statutory sick pay (SSP)  will be removed and a waiting period will no longer be applied, so it can be claimed from day one of a sickness absence
• Fire and rehire (and fire and replace) practices will end, unless the employer can meet certain requirements, such as preventing financial difficulties, there were no other alternative solutions, and a full consultation process took place
• Flexible working will be a default right for all employees from day one, unless the employer can show the change would be ‘unreasonable’
• Day one rights to parental leave, paternity leave and bereavement leave
• Giving zero/casual hours workers more stability, with the right to receive a contract with guaranteed working hours over a defined period, which is likely to be 12 weeks

The bill is still going through the parliamentary process and is expected to be enacted in 2026.

 

National Minimum Wage and National Living Wage

The National Living Wage for those over 21 will rise to £12.21 per hour, the National Minimum Wage for 18-20-year-olds will increase to £10 per hour and the rate for 16-17 year-olds and apprentices will increase to £7.55 per hour.

These rates will come into effect on 1st April 2025. They represent the largest increase on record for the 18-20 year old rate.

 

Statutory Payments Increase

Statutory Sick Pay will increase to £118.75 per week.

Statutory Family-Related Leave Pay (such as maternity pay) will increase to £187.18 per week.

These rates will change from 6th April 2025.

 

Employers NIC Increase

Employers’ national insurance contributions (NICs) will increase from 13.8% to 15% from 6th April 2025, and the threshold at which employers will need to start paying NICs will decrease, from £9,100 to £5,000.

To partially offset these increases, the employment allowance will become available to all employers, removing the current limit of an annual employers NICs liability of less than £100,000. Additionally, the  maximum amount employers can save through the allowance will increase from £5,000 to £10,500.

 

Neonatal Care Leave and Pay

New regulations are expected to provide employees with the right to time off when a baby they have responsibility for is in neonatal care. This is expected to come into force in April 2025, however regulations required to do this still need to be put before Parliament.

 

Pension Scheme Bill

On 13th November 2024 the Government announced a new Pension Scheme Bill which will be put towards Parliament in 2025. Key changes will include automatic consolidation of small deferred pension pots, a new Value for Money Framework for DC (defined contribution) schemes whereby poorly performing schemes will have to improve or protect savers by transferring them to better schemes and a pensions dashboards will launch, allowing individuals to view all their pension savings, on one platform. 

 

These changes aim to strengthen workers' rights and improve working conditions, but they also present new challenges for employers. It's important for businesses to stay informed and seek HR support to navigate these changes effectively.   Contact us today to arrange your HR support!