As 2024 comes to an end, we can reflect on the significant political and economic changes that have shaped workplaces nationwide, setting the stage for a transformative 2025. Key issues like unfair dismissal rights, extended claim limitation periods, trade union rights and sexual harassment preventions are poised to dominate the headlines in the new year.
So, what can we expect?
Employment Rights Bill
We must of course commence with the heavily anticipated overhaul of employment law as we know it, by way of the proposed Employment Rights Bill (ERB).
Further consultations will continue into 2025, covering topics such as unfair dismissal, fire and rehire practices, collective redundancies, zero-hours and low-hours contracts, trade unions, industrial action, sexual harassment, statutory sick pay (SSP), flexible working, and family leave.
Key Proposed Changes under the ERB so far include:
Bereavement leave
The current right to two weeks’ parental bereavement leave following the death of a child or a stillbirth will be expanded to cover a wider range of relations.
- The new right to leave will apply from day one of employment.
- Specific relationships qualifying for bereavement leave will be outlined in regulations following consultations.
Collective redundancies
Currently, if an employer is proposing to make 20 or more redundancies within a 90-day period ‘at one establishment’, they must go through a collective redundancy consultation process.
The ERB will strengthen redundancy rights for affected employees by removing the ‘at one establishment’ part of the test for collective redundancies, meaning that the threshold of 20 or more redundancies will be met when that number is impacted across the entire business, rather than at one site.
In addition, it is proposed that:
- Protective awards for non-compliance may increase from 90 days’ pay to 180 days’ pay or become uncapped.
- Minimum consultation periods for redundancies involving 100+ employees may increase from 45 to 90 days.
- From 20th January 2025, failure to comply with collective consultation obligations could lead to compensation adjustments of up to 25% if the statutory code of practice on dismissal and re-engagement is breached.
Dismissal and re-engagement (fire and rehire)
Fire and rehire has received well-known negative press coverage in recent years following several high-profile cases. These include the dismissal of almost 800 employees by P&O Ferries who were replaced by lower-paid agency staff, and when Tesco (unsuccessfully) tried to rely on fire and rehire to force its staff to lose preferential pay rates it had agreed on a “permanent” basis after relocating to a new site.
The ERB will restrict employers’ ability to change contractual terms through dismissal and re-engagement except in exceptional financial circumstances threatening the business. This would mean that only in these particularly exceptional circumstances of putting the business in jeopardy would be acceptable to a tribunal, otherwise an employee may have an automatic unfair dismissal claim.
Equality action plans and menopause support
Employers with 250+ employees must publish equality action plans addressing gender equality, including support for menopause and menstrual health.
Any proposed amendment to this would require employers to include an explanation in their equality action plans on how they are supporting employees with menstrual problems and menstrual disorders. Consultations with the Equality and Human Rights Commission will take place on the content of the regulations before they are published.
Fair Work Agency
The ERB contains provisions permitting the Secretary of State to delegate their labour market enforcement functions to a public authority and to appoint enforcement officers. This authority is proposed to be the Fair Work Agency (FWA), which will bring together the existing enforcement functions of HMRC for national minimum wage (NMW), the Employment Agency Standards Inspectorate (EASI) and the Gangmasters and Labour Abuse Authority (GLAA).
It is not yet confirmed when the FWA will be established, but it is expected to be a number of years before it is fully operational.
Family leave
Paternity leave and unpaid parental leave will become a day-one right for eligible employees, removing the current requirement to have worked 26 weeks before the qualifying week (15th week before the due date).
There is an intention to make it unlawful to dismiss employees when pregnant or within six months of their return to work, except in very specific circumstances.
A review of the current parental leave system is expected by July 2025.
Flexible working
The existing day-one right to request flexible working will remain, however the ERB will introduce a “reasonableness” test for employers denying flexible working requests, requiring clear explanations for refusals. Employees will retain the right to make two flexible working requests annually and receive decisions within two months.
Sexual harassment
Currently, employers are required to take ‘reasonable steps’ to prevent sexual harassment of their employees during the course of their employment, a duty which has been in place since 26 October 2024.
The ERB will require employers to take all reasonable steps to prevent sexual harassment and third-party harassment and to prevent third-party harassment in relation to the other relevant protected characteristics.
In addition, the ERB will amend the whistleblowing provisions of the Employment Rights Act 1996 to make it clear that reporting sexual harassment will amount to a qualifying disclosure.
Statutory sick pay (SSP)
The ERB intends to provide employees with the right to be paid SSP from their first sick day rather than from the fourth consecutive day off, and to remove the lower earnings limit.
Consultations were held to obtain views on a suitable percentage of average weekly earnings that should be required for the purposes of calculating the rate of SSP for some low-earning employees as a result of removing the lower earnings limit. The outcomes of the consultation are awaited.
Trade unions
This area of law is expected to change significantly as a result of the ERB. Key changes include:
- Repealing the Strikes (Minimum Service Levels) Act 2023. When a trade union announced strike action, this act permitted some employers to issue a notice to workers requiring minimum service provisions for the duration of the strike. The removal of this right will remove employers’ rights to restrict strike action in this way.
- Employers will need to provide a written statement advising employees of their right to join a trade union.
- Amending recognition thresholds to simplify trade union recognition processes with ‘access agreements’.
- Providing unrecognised unions access to workplaces for recruitment and collective bargaining.
- Protecting employees from detriment and unfair dismissal during lawful strikes or industrial action.
Tribunal time limits
In a set of amendments to the ERB published in November 2024, the government confirmed that it would extend the time limits for bringing all tribunal claims from three to six months. It is not yet confirmed when this measure will take effect.
Unfair dismissal
Under the ERB, the right to bring a claim for unfair dismissal will become a day-one right for employees, subject to a new modified ‘light-touch’ dismissal procedure, which will be set by regulations but must be between three and nine months. This will remove the existing two-year qualifying period for ordinary unfair dismissal protection.
It is anticipated that this will not take effect until Autumn 2026.
Regarding unfair dismissal compensation, the Secretary of State is intended to specify a cap on the compensatory award for employees unfairly dismissed during the initial period of employment provided for in the ERB.
Zero hours and “low hours” contracts
The ERB will introduce a duty on employers to offer guaranteed hours contracts reflecting the hours regularly worked by qualifying workers over a reference period, likely 12 weeks (to be confirmed). Employers must also provide reasonable notice of shifts, with compensation due for shifts cancelled, moved, or curtailed at short notice.
Regarding agency workers, consultations debated whether agencies or hirers must offer guaranteed hours. Agencies, with limited control over work demand, are less equipped than hirers, who can better forecast and manage workflow. However, requiring hirers to guarantee hours may effectively make them employers of agency workers.
Proposed ERB amendments include requiring employers to:
- Inform workers of their guaranteed hours rights during an ‘initial information period’.
- Notify workers when an exception to the duty to offer guaranteed hours applies or when an offer is withdrawn.
Draft Equality (Race and Disability) Bill
This bill is expected to undergo extensive consultation, likely delaying its progress compared to the ERB. It focuses on two key areas:
- Legal enforcement of equal pay for ethnic minorities and disabled people.
- Mandatory ethnicity and disability pay reporting for employers with 250+ employees.
Neonatal care leave and pay
The Neonatal Care (Leave and Pay) Act 2023, receiving Royal Assent in May 2023, is expected to come into force in April 2025. HMRC has released guidance on the tax treatment of statutory neonatal care pay, aligning with this timeline. The Act provides up to 12 weeks of leave and pay for parents of babies requiring neonatal care, to be taken within 68 weeks of birth.
Right to disconnect
The government stated a “right to switch off” would allow workers to disconnect from work outside working hours. However, the ERB omits this right. Instead the government confirmed it will be addressed via a statutory Code of Practice, with consultations expected in 2025.
Employment tribunal reforms
New Employment Tribunal Rules (ET Rules) under the Employment Tribunal Procedure Rules 2024 (ETPR) will replace the 2013 rules on 6 January 2025. The changes are minor, removing disused provisions such as tribunal fees.
On the same date, a new Practice Direction will eliminate email as a standard method for submitting responses, except in exceptional cases. Submissions must be made online, by post, or by hand. Updated Presidential Guidance on giving evidence from abroad is also expected, reflecting jurisdictional differences between England, Wales, and Scotland.
Gender identity and gender critical beliefs
Gender identity is a divisive issue with polarised views about a transgender person’s right to have their identity recognised and “gender critical beliefs” that a person’s sex is an immutable biological fact and that someone’s gender is different from their sex.
Recent case law has recognised gender-critical beliefs as being capable of protection under the Equality Act 2010 (EqA 2010) as a philosophical belief.
In For Women Scotland Ltd v Scottish Ministers, the Inner House of the Court of Session confirmed that the definition of “woman” in the EqA 2010 does include trans women with a gender recognition certificate. The case has been appealed and was heard by the Supreme Court on 26 and 27 November 2024.
The current legal position is that ‘sex’ in the EqA 2010 refers to biological sex. But, if the pending appeal is lost and the Supreme Court rules that a gender recognition certificate does change a person’s biological sex, then this outcome would affect workplace claims. For example, a male who has acquired a gender recognition certificate deeming them a female will have a presumptive right of access to single-sex spaces and services for women, and to apply for female-only jobs.
The outcome of the appeal is expected in early 2025.
It’s essential for employers to get ahead of these developments by preparing for their introduction in the coming year. If you would like support or to learn more about our SmartHR retainer service, which includes advice and documentation to support with the above mentioned policies and obligations, please contact Phoebe Gogarty, Associate in our Employment team, at pgg@swinburnemaddison.co.uk or call our Employment team on 0191 384 2441.
