What to expect in employment law in 2025

Posted: 08/01/2025

The Labour Party’s victory in the 2024 general election means that 2025 is set to be another busy year in the field of employment law. Its ‘Plan to Make Work Pay’ has been heralded, admittedly by the deputy prime minister Angela Rayner, as the biggest upgrade to rights at work for a generation, and the publication of the Employment Rights Bill (ERB) in October set in motion the transformation of UK labour law that the government intends to deliver over the course of this parliament.

Many of the ERB’s proposed reforms will not be implemented before 2026 (the headline-grabbing ‘day one’ right to unfair dismissal will not come into force until autumn 2026 at the earliest), and therefore 2025 may be more a year of anticipated, rather than actual, change. We can however certainly expect to see the final form of the ERB taking shape over the coming year, with ongoing consultations over the various proposals contained within. The bill is expected to receive royal assent towards the middle of 2025, and from then on, some legislative changes will start to be implemented.

The employment team will continue to publish updates on the progress of the ERB and its proposals; for a summary of the ERB as published in October, see the team’s previous article here.

Aside from the ERB, what changes can we expect to see over the coming year?

Family-friendly rights

Flexible working, with the ongoing debate about the return to the office, is likely to remain a hot topic throughout 2025. There may even be a code of practice on the right to disconnect, one of the non-legislative reforms that the government intends to deliver alongside the ERB. Other family-friendly rights include the introduction of statutory leave for parents of, or those with parental responsibility for, a child receiving neonatal care. Regulations setting out the detail of this right are still awaited but it seems that the intention remains to bring this into force in April 2025. 

Also expected are regulations which will put into effect the Paternity Leave (Bereavement) Act 2024. The act will, among other things, remove the 26-week service requirement for fathers or partners to take paternity leave where the mother (or adoptive parent) dies shortly after the child’s birth. The date of implementation is not yet known.

Sexual harassment 

The headlines this week surrounding fast-food chain McDonald’s suggest that the issue of sexual harassment in the workplace will continue to be a hot topic. Employers will be required to get to grips with the new positive duty to prevent sexual harassment that was introduced in late 2024, and we are also likely to see some further developments in this area, particularly in relation to the duty to prevent third-party sexual harassment.

Fire and rehire

On 20 January an order will come into force granting employment tribunals the power to uplift or reduce compensation for failure to follow the code of practice on dismissal and re-engagement. While the code, which was introduced by the previous government and took effect from July 2024, remains, the ERB proposes a further clampdown on ‘fire and rehire’, with the practice outlawed save where there is no other viable option to ensure the survival of the business. The current statutory code will also be replaced.

Corporate crime

Section 199 of the Economic Crime and Corporate Transparency Act 2023 will come into force on 1 September. This section introduces a new corporate offence of failing to prevent fraud, whereby large organisations may be held criminally liable where an employee, agent, subsidiary or other ‘associated person’ commits a fraud intending to benefit the organisation. 

Examples may include dishonest sales practices, the hiding of important information from consumers or investors, or dishonest practices in financial markets. To defend a claim, an organisation will need to show that it had reasonable fraud prevention measures in place at the time the fraud was committed.

Other changes include a possible extension of the pension auto enrolment regime, and the usual April changes to minimum wage rates and other statutory payments.

In the courts

One challenge for the courts and tribunals in 2025 (and the years to come) will be how to interpret well-established EU case law following the abolition of the principle of supremacy of EU law as of 31 December 2023, following Brexit. The UK’s decision to leave the EU will continue to cause legal uncertainty for some time, and indeed its full effects will not be seen for many years, given the slow progress of cases through the tribunal system.

One thing the courts will not witness in 2025 is a slowdown in the number of cases on the question of what amounts to a protected belief for the purposes of discrimination law. The coming year will see the Court of Appeal’s decision in Higgs v Farmor’s School – the latest case to consider whether gender-critical beliefs (ie the belief that an individual cannot change their biological sex or gender) are protected beliefs under the Equality Act 2010. Similarly, in Miller v University of Bristol, the Employment Appeal Tribunal (EAT) will hear in late 2025 the university’s appeal against the employment tribunal’s decision that an academic's anti-Zionist beliefs amounted to a protected philosophical belief, and that his summary dismissal was both unfair and an act of direct discrimination.

Equal pay claims will continue to be before the courts, with high profile cases involving Tesco, Next and the BBC reaching the appeal courts. The Court of Appeal will also be occupying itself with whistleblowing cases. In February it will hear an appeal against the EAT’s decision in Sullivan v Isle of Wight Council, that the Employment Rights Act 1996 should not be interpreted to allow an external job applicant to bring a whistleblowing claim. Then, in July, the court will consider the appeal in Wicked Vision Ltd v Rice, turning on whether dismissal could amount to a detriment for the purposes of a whistleblowing claim.  

It is clear that 2025 will be another intriguing year for all those who have an interest in employment law, notably with the passage of the Employment Rights Bill through Parliament, and the impact of a new Labour government starting to be felt. At the time of writing the future of employment law is somewhat uncertain but, by the end of 2025, the picture should become clearer, as the ERB gains royal assent and its proposals are clarified. 

In 12 months’ time, will it be possible to predict with certainty the shape of employment law for the coming generation? Or will the pressure currently being brought to bear on the government by business (citing a stalling economy, a potential recession and a misreading of the economic health of the country) result in a watering-down or delay of the proposals so confidently made early on in its term in office?

For further information on how these issues might affect your organisation, please get in touch with Paul Mander or your usual contact in the employment team. In relation to the duty to prevent sexual harassment, we are offering a free 15-minute telephone call to understand how prepared you are for this duty and how we might be able to support you. Following this call, there are a number of ways in which we can help, depending on your needs and budget. These could include a round-table discussion, an audit of your policies and procedures, training for your staff, or advice on ongoing monitoring and compliance.

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