Employment Rights Bill
October 2024 saw the release of the Employment Rights Bill including 28 individual reforms aimed at reshaping employment rights and marking the first in a series of phases of the UK Government’s delivery of its ‘Plan to Make Work Pay’.
Although many of the changes outlined are not expected to come into place until Autumn 2026, we recommend advance planning and review of existing policies to ensure they are aligned with both best practice and current legislation, and to identify any gaps which will require to be addressed in advance of new and changing legislation coming into force.
It is also important that if steps have not already been taken to ensure compliance with the new proactive duty to prevent sexual harassment in the workplace, which came into force on 26 October 2024, actions should now be taken now without further delay. Please see the 2024 Q3 Employment Update for further information about the changes that are now in place, and your obligations as an employer.
If you’d like a review of your existing policies to ensure they’re up to date, support with drafting a risk assessment format, or if you don’t already have a compliant Sexual Harassment policy in place and would like support with this, please get in touch with your H100 focal point.
Code of Practice on Dismissal and Re-Engagement – 20th January 2025
Dismissal and re-engagement (commonly known as ‘fire and rehire’) is a process whereby an employer has proposed a change to an employees’ terms and conditions of employment, but cannot reach agreement with the employee through a consultation process. To make the change, the employer essentially ‘fires’ the employee and offers them reinstatement on new contractual terms and conditions, which, more often than not, are detrimental to the employee.
Prior to 20th January 2025, employment tribunals’ power to apply a 25% uplift for failure to follow the Code of Practice on Dismissal and Re-engagement, did not apply to any protective award made.
Protective awards are a form of compensation (up to 90 day’s gross pay per affected employee) awarded to employees where an employer has failed to comply with their duty to inform and consult in a collective consultation process i.e. where an employer proposes to dismiss 20 or more employees within a 90 day period.
As of 20th January 2025, an employment tribunal has the power to require employers who have failed to follow the Code, to also pay up to a 25% increase on the protective award. In practice, this could mean that an employer could have to pay a 25% increase for failure to follow the Code, as well as a 25% uplift on any award of 90 days gross pay per employee. This is the first time employers will risk facing uplifts inclusive of protective awards.
The Employment Rights Bill seeks to severely restrict an employer’s ability to use the ‘fire and rehire’ practice, making it automatically unfair (unless the employer can demonstrate they were acting in response to severe financial difficulties), to dismiss an employee for refusing to agree to a change to terms and conditions of employment. Whilst we don’t expect these particular changes to come into place before Autumn 2026, dismissal and re-engagement remains a controversial practice, and employers should continue to comply with the current Code, and only consider dismissal and re-engagement as a last resort.
Neonatal Care (Leave and Pay) Act 2023 – 6th April 2025
The Neonatal Care (Leave and Pay) Act 2023 will come into place on 6th April 2025. The measures set out under this legislation, will ensure parents in employment can focus on supporting their new family without worry or concern about choosing between their job and spending time with their child.
Neonatal care leave (NCL) will apply to parents of babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of 7 full days or more. These measures will allow eligible parents to take up to 12 weeks of leave (and, if eligible, pay) on top of any other leave they may be entitled to, from day one of employment.
In recognition that an employee whose baby has been admitted for neonatal care is highly likely to be on another form of family leave at that time, NCL can be taken in the first 68 weeks of the baby’s birth, or placement, in the event of adoption.
Whilst the right to NCL is a day one right, the right to receive statutory neonatal care pay (SNCP) requires employees to have at least 26 weeks continuous service ending with the ‘relevant week’, and average earnings of not less than the minimum weekly threshold set by the Government, which will be £125 per week for the tax year 2025-2026. This mirrors the entitlement to maternity and shared parental leave pay.
Employers will need to have a clear policy setting out the statutory right to leave and pay, as well as any enhanced entitlements. If you would like a NCL policy drafted, please get in touch with your Hunter100 focal point.
National Minimum wage and National Living wage rises – 1st April 2025
National minimum wage and National living wage rise every year. The revised rates to implement from 1st April 2025 are:
- For those aged 16 – 17: £7.55 per hour (National Minimum Wage) (up from £6.40).
- For apprentices aged 19 and under (or 19 and over and in their first year of their apprenticeship) – £7.55 per hour (up from £6.40)
- For those aged 18 to 20 – £10 per hour (National Minimum wage) (up from £8.60)
- For anyone aged 21 and over – £12.21 per hour (National Living wage) (up from £11.44)
In addition, if you are signed up to pay the voluntary Real Living Wage, you must increase hourly pay to £12.60 in the UK, and £13.85 in London, by 1st May 2025 if you wish to retain your accreditation from the Living Wage Foundation.
You should ensure all workers are paid the correct wage if they earn on or around the national Minimum / Living wage. Where you pay at, or close to, minimum rates, it is recommended that employee birthdays which will bring them into a different bracket, are flagged in order that they do not fall below minimum rates as a result. A close eye should also be kept on the rates being paid to people on or close to minimum rates who work any amount of unpaid overtime, as this will also dilute the minimum hourly rate being paid. If you underpay workers (even accidentally), this could lead to you having to pay compensation, face fines, and the Company name being published on the Government’s name and shame list.
Employer National Insurance Contributions (NICs) – 6th April 2025
From 6th April 2025, the UK Government is implementing the following four significant changes to employer national insurance contributions (NICs). These changes will result in a decrease in the NICs secondary threshold, which is the earnings after which an employer becomes liable to pay secondary Class 1 NICs on employment.
- The secondary Class 1 national insurance (employer) threshold will be lowered from £9,100 to £5,000 per year. The secondary threshold of £5,000 per year will be in effect from 6 April 2025 until 5 April 2028. Thereafter the secondary threshold will be increased in line with Consumer Prices Index (CPI).
- The main rate of secondary Class 1 National Insurance (employer) contributions will increase from 13.8% to 15%.
- The rates for Class 1A and Class 1B employer contributions, which apply to taxable benefits-in-kind, will increase accordingly.
- To partially offset these increases, the Government is enhancing the employment allowance in two ways:
- It will become available to all employers, removing the current restriction limiting it to employers with an annual employer NICs liability of less than £100,000. This means all eligible businesses and charities will be able to claim a greater reduction on their secondary Class 1 NICs liability, irrespective of what their secondary Class 1 NICs liabilities were in the tax year prior to the year of the claim.
- The maximum amount employers can save through the allowance will increase from £5,000 to £10,500.
Statutory payment increases – 6th April 2025
From 6th April 2025 several statutory payment rates are expected to increase:
- Statutory sick pay (SSP) will increase to £118.75 per week (up from £116.75), with a qualifying threshold of £125 per week.
- Statutory payments including maternity pay, maternity allowance, adoption pay, paternity pay, shared parental pay and parental bereavement pay will increase to £187.18 per week (up from £184.03).
- In addition, the lower earnings limit (the weekly earnings threshold for qualifying for all the above payments, except maternity allowance) will increase to £125 (up from £123), while the threshold for maternity allowance will remain at £30 per week.
At Tribunal (April 2024)
An Employment Tribunal (ET) Judge ruled the phrase ‘back in your day’ was a “barbed and unwelcome” expression used to highlight an age gap between co-workers could amount to “unwanted conduct”.
A Nursing Assistant, who is in her sixties, raised a claim against her employer for discriminatory dismissal, disability discrimination, and harassment. Part of the claim related to an allegation that a younger colleague suggested an operation had been free under the NHS “back in your day”.
The employee was dismissed by her employer in October 2021 for not wearing a mask and PPE at the home of an elderly patient. In her appeal against the dismissal, the employee alleged that she was a victim of “bullying and discrimination”.
The employee’s age did not relate to the reason for the employee’s dismissal from the Company, however, she reported that she had complained to the Team Leader the same year she was dismissed, that she had not been promoted because of her age, as well as alleging that several other age-related comments had been made by a colleague, despite not bringing these to her line manager’s attention whilst she was employed. The colleague, who was described as “a lot younger” than the employee, was said to have commented to the employee about a form of elective surgery: “Well, back in your day it probably was free, but I would not get it free now.” The employee told the tribunal “I contend that the comment amounts to harassment on the grounds of age.”
The employee’s claim was dismissed by the ET Judge partly due to a lack of clear evidence that the comment ‘back in your day’ had been made, however, the Judge specifically highlighted “We would accept that the words “back in your day” are related to age. Depending on context, the implication might be “at the time that you were the same age that I am now, which was a significant period of time ago”. Had it been confirmed that such words were said, and there was evidence of the context of the conversation, the Judge stated that “we would have been likely to accept that such words would have been unwanted conduct, by being an unwelcome and barbed highlighting of the age difference between Kelsey Ford and the Claimant.”
Whilst there was insufficient evidence in this case for the Judge to find in the employee’s favour, this case serves as a reminder that comments relating to age can constitute harassment, and discrimination, resulting in claims being raised against employers. We recommend that when looking at awareness training requirements for new and existing employees, including refresher training, employers include the roll out of awareness training relating to all types of discrimination.
