Summary of Recent Employment Law updates
As the year comes to a close here’s a quick summary of the main employment law updates.
Sexual Harassment – Employers are under an obligation to take all reasonable steps to prevent sexual harassment in the workplace raising the compliance threshold from “significant steps” considerably. This law came into effect on 26 October 2024.
Have you taken steps to risk assess your Christmas staff party? Christmas is less than two weeks away and for many of us this means the return of the annual work Christmas event. While it may be a social gathering, it is still a work event and staff should still behave professionally. Employers can be liable for employee actions during those events and employees can face disciplinary consequences for misbehaviour.
We would advise employers to send around an email in the run-up to the party making clear what's expected of staff and ask one or two staff members to keep an eye out for employees who may misbehave. Staff should be advised that they can be disciplined for bad behaviour such as fighting, harassment and damage to company property.
The Employment (Allocation of Tips) Act 2023 (Code of Guidance)- The Tipping Act sets out how employers must deal with an amount paid by a customer of an employer as a tip, gratuity or service charge. The Government has published guidance (non-statutory) for employers on the fair and transparent allocation and distribution of tips, gratuities and service charges.
This guidance supports the new law which came into effect on 1 October 2024. Under the Act workers are able to enforce their rights through the Employment Tribunal system and judges have a duty to take the code into account where relevant.
Breach of dismissal and re-engagement Code of Practice - From 20 January 2025 where an employer unreasonably fails to follow the dismissal and re-engagement code of practice a draft statutory order will give employment tribunals the right to increase a protective award to an employee by up to 25%.
Highlights of the Autumn Budget
UK National Minimum Wage
On the 1st of April 2025 the national living wage for Workers aged from 21+ will be £12.21 an hour. This is an increase of 6.7% from the current rate of £11.44 per hour.
The rate for workers aged 18-20 will be £10 an hour.
Young workers rate for workers and apprentices aged 16-17 will be £7.55 per hour.
The new rate for the wages were announced in November 2025 (Autumn Budget).
These increases to pay will subsidize the wages and living standards of low paid workers at this time when many are feeling hopeless and worried due to the cost-of-living crisis.
Real living wage
The Real Living Wage rates for 2024-2025 were announced on 23 October 2024. The real living wage for 2024-2025 is now £12.60 per hour outside of London and £13.45 per hour in London. This is a 5% increase.
Payment of the real living wage to employees is voluntary. Employers who have elected to pay the voluntary rate have 6 months to implement the rates by 1 May 2025.
The Real Living Wage is the only United Kingdom (UK) wage rate based on the cost of living. The rates are calculated annually by the Resolution Foundation and the Living Wage Commission. The calculation is based on the best available evidence about living standards in London and the UK – based on the cost of a basket of household goods and services.
The basket of goods draws on the Minimum Income Standard (MIS) to identify everyday living costs based on the views of the public. The MIS is a measure of what a person needs to earn in order to reach an acceptable standard of living: https://www.minimumincome.org.uk/.
This rate is higher than the government’s national minimum wage and is paid on a voluntary basis by over 15,000 accredited Living Wage employers in the UK (e.g. Ikea, Liverpool FC, Nationwide) to workers 18 years and older.
National Insurance
From April 2025 the National Insurance (NI) rate for employers will rise from 13.8% to 15%.
The threshold for payment of NI will drop from £9100 to £5000.
The Employers allowance which allows small companies to reduce their liability for NI.
will increase to £10,500.
Statutory Sick Pay and Family Friendly Leave pay
From April 2025 statutory maternity, adoption and paternity, shared parental pay and parental bereavement pay will rise from £184.03 to £187.18 per week.
Also on this date, statutory sick pay (SSP) will rise from £116.75 to £118.75 per week.
Significant Employment Law Changes Are Coming In 2026
The draft Employment Rights Bill 2024 was introduced by the government on 10 October 2024. The Bill sets out the biggest changes to employment law in three (3) decades and contains major reforms some of which are as follows:
Unfair dismissal protection will start from day one of employment – employers must be prepared to justify dismissals from the very first day of employment. There will be an “initial period” (probably nine months) during which employers can dismiss employees more easily for reasons such as misconduct, capability, poor performance and other substantial reasons.
New rules for zero-hour contracts –The Bill introduces new rules that require employers to offer guaranteed hours to workers on zero-hours or low- hours contracts. After each reference period (possibly 12 weeks) employers are obliged to offer the workers guaranteed hours based on the hours they worked during each reference period.
The qualifying period for paternity leave and parental leave will be removed and workers will get wider access to bereavement leave. These will be “Day One” rights.
New third-party harassment claims: Expanded duty on employers to prevent harassment, including by third parties. Workers will have the right to sue employers if harassed by a third party and the employer fails to prevent it. This will cover all forms of harassment not just sexual harassment.
Fair Pay agreements -Sectoral Collective Bargaining on Pay and Conditions: Starts with Adult Social Care.
Stronger protection for pregnant workers - new mothers and those returning from family-friendly leave such as shared parental leave or maternity leave will have improved protection of their rights.
Reforms designed to empower Trade Unions: Enhanced access rights and repeal of certain strike laws.
Establishment of New ‘Fair Work Agency’ to enforce employment rights. This body will have significant powers e.g. the right to carry our workplace inspections, carry out targeted enforcement actions, bring civil proceedings and act against worker exploitation.
Expanded whistleblowing protections for workers – protected disclosures will include allegations of sexual harassment thereby protecting workers from dismissal or detriment.
SSP to be payable from day one of absence – this removes the current three (3) day waiting period for SSP and will place additional financial pressure on employers who do not currently pay sick pay from the first day.
Introduction of Flexible working as a default right from Day One unless the employer can prove that it is not feasible on business grounds.
Action plans for gender pay gap and menopause.
Expansion of equal pay regulations to cover race and disability with the creation of a regulatory enforcement body to handle equal pay disputes.
It is anticipated that these reforms will cost businesses £5 billion and will be fully in force in 2026.
Potential Implications of the new Employment Rights Bill:
An increase in claims brought to the Employment Tribunal.
Need for greater caution by employers in recruiting and dismissing staff.
Need for greater caution by employers in supervising and performance managing staff.
Increased financial costs for employers eg staff and manager training and development, hiring costs, administrative, operational, compliance and legal costs.
Increase in disputes and grievances as employees seek to enforce their employment rights.
Increase in the backlog of ET claims.
Failure to follow the correct procedures could expose businesses to increased litigation risks even during the first few months of employment.
If you do not already have contracts of employment, policies in place and or staff handbooks for your staff no matter how small your team, you have to act now.
CONTACT US NOW TO DISCUSS HOW TO GET YOUR BUSINESS READY!
The Employment Tribunal statistics for 2023/24 (ie April 2023 to March 2024) have been released. The figures show that the highest tribunal awards in that year were as follows:
1. Unfair dismissal - £179,124 (exception to cap)
2. Race discrimination - £431,768
3. Disability discrimination - £964,465
4. Sex discrimination - £995,128.
5. Religion and Belief - £20,000
6. Age discrimination - £261,949
7. Sexual Orientation discrimination - £47,297
The statistics also show that the number of claims increased from 86,000 in 2022/23 to 97,000 which is a rise of 13%.. Tribunal fees were abolished in July 2017 after the Supreme Court ruled them to be unlawful. This means that employees can bow bring a claim without paying any fees. This is a significant increase from pre-fee abolition levels when 88,461 applications were lodged in 2016/17 and 83,015 in 2015/16. Since then claims have risen significantly. It is anticipated that the number of claims will continue to increase over the coming years more especially as a result of the new rights that will be brought into force by the government in 2026 by the Employment Rights Bill (Please see below).
Early conciliation
The figures show that 68% of early conciliation notifications did not progress to employment tribunal between October to December 2023.
And that’s it for 2024!
We look forward to working with you in 2025.
Reduce your claims risk with our specialist support!
How can Pure Business Law help?
Reviewing your recruitment, onboarding, probation and performance management processes and documentation are essential to reduce the risk of claims. Many of the changes will require you to implement new policies and or update your existing policies. Our highly experienced employment lawyers are here to guide you every step of the way during this time of transition.
Facing an Employment Tribunal claim? Our lawyers can provide specialist litigation support to guide you through the proceedings.
More importantly with our fixed fees offering, we can assist you in preventing claims before they arise through our proactive, tailored legal advice and support.
For more information, please contact us on Tel no: 01234 938089 or by email at enquiries@purebusinesslaw.co.uk.
Our highly experienced employment lawyers are here to guide you every step of the way during this time of transition and can provide you with specialist support for all your Employment matters.
Pure Business Law is regulated by the Solicitors Regulation Authority and is a licenced member of the Law Society of England and Wales.
Please note: This article is for general information only and does not constitute legal or professional advice.
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