Employment Law Changes Expected in 2025/26

2025 promises to be a year of considerable change for employment law in the United Kingdom, not least because of the Employment Rights Bill currently being passed through the Houses of Lords. The Bill is part of the government’s ‘Plan to Make Work Pay’, which is intended to encourage more people into work in a bid to grow the economy. In this article, we will summarise some of the key employment law changes more broadly, including some of those proposed in the new Bill.

New rules on neonatal care leave – 6th April 2025

On 20th March 2025, the Neonatal Care Leave and Miscellaneous Amendments Regulations 2025 (SI 2025/375) and the Statutory Neonatal Care Pay (General) Regulations 2025 (SI 2025/376) were made. The new Statutory neonatal care leave (NCL) and pay came into force on 6th April 2025, giving workers who meet the eligibility requirements up to 12 weeks of Statutory Neonatal Care Pay (SNCP) and pay. To qualify, employees must have a child receiving an uninterrupted period of at least seven days of neonatal care commencing within 28 days of birth. SNCP will be available to employees with at least 26 weeks of continuous service.

Under the new rules, neonatal care leave and pay can be taken in two tiers. The first tier covers the period when the child is receiving neonatal care plus one week after the care has ended. The second tier covers the period outside the first tier and before the end of 68 weeks from the child’s birth.

Further details of the SNCP and NCL rules can be found on the government’s website.

New practice directions for employment tribunal claims – 21st May 2025

On 6th April 2024, the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2024 (SI 2024/366) came into force. The new rules aim to facilitate the tribunal’s digital case management system. Under the new rules, from 21st May 2025, there are now four permitted ways to make a claim:

Online using the HM Courts and Tribunals Service (HMCTS) system and CitizenUI portal for litigants in person

By post, In-person, or by email, but only if there is an issue using the online submission service (see Presenting an ET1 by email).

Employment Rights Bill

The Employment Rights Bill is currently in the House of Lords and is expected to bring radical changes to employment law in 2025 and 2026. The Bill encompasses changes to many areas of key employment law legislation in the UK, including:

Unfair dismissal to become a day-one right for employees (expected Autumn 2026)

Employers considering flexible working requests to use a new test for reasonableness. If implemented, this new test may make it harder for employers to refuse a reasonable request for flexible working. A consultation on this potential change is expected.

Statutory sick pay (SSP) changes, including the right to receive SSP from the first sick day rather than from the fourth day. In addition, the weekly rate of SSP may be lowered to the lower of the prescribed weekly rate.

Protection against dismissal will be strengthened for pregnant women, those who have been pregnant and those taking or returning from a period of statutory family leave. Paternity leave may also become a day-one right for eligible employees compared to the current rules, which require 26 weeks of service.

Protections against harassment – these changes may include a duty on employers to take all reasonable steps to prevent sexual harassment, employers’ liability for third-party harassment, protected disclosure when reporting the occurrence of sexual harassment, the requirement for equality action plans, and the requirement for employers to publish information on outsourcing contracts.

Fire and rehire – the aim is to abolish so-called ‘fire and rehire’ methods and make it automatically unfair to dismiss an employee for refusing to agree to a change in their contract of employment unless the business has little choice due to financial difficulties.

In addition to the above-proposed changes, other areas of employment law are also being proposed, including collective bargaining in the education and adult social care sectors, trade union law and enforcement of labour market rules.

Final words

The Employment Rights Bill is a complex and lengthy document that rightly needs to be rigorously scrutinised before being passed by parliament and gaining royal assent. At the time of writing, the Bill is in the Committee Stage in the House of Lords. While it’s not clear exactly what changes will occur and when employers should do all they can to keep abreast of the latest amendments and consultations as a core part of their preparation for what promises to be one of the most radical shake-ups to employment law in years.

Pearcelegal has a dedicated team of employment law Solicitors who provide practical legal advice and support on employment law matters. To make an appointment, please contact us on 0121 270 2700 or enquire through our contact form.