Welcome to our March 2025 Employment Law Update!
With significant changes to wage rates, statutory benefits, and employment rights taking effect in April, businesses must prepare for key updates in employment law. This issue covers increases to the National Minimum and Living Wage, employer NICs, and statutory payments, alongside new regulations under the Employment Rights Bill. We also highlight the upcoming Neonatal Care Leave entitlement, developments in remote working policies, and insights from the latest Acas report on neurodiversity. Additionally, a crucial Court of Appeal ruling on employee conduct and belief expression offers important guidance for employers. Read on for all the details and practical implications for your organisation.
Rises to wage and statutory rates 2025/2026
From 1 April 2025:
- National Living Wage:
- £12.21 per hour for all those aged 21 and over, an increase from £11.44
- National Minimum Wage:
- £10 per hour (from £8.60) for those aged 18 – 20
- £7.55 per hour (from £6.40) for those aged 16 - 17 and apprentices
From 6 April 2025:
- Increase in employer NICs:
- Employers’ NICs will increase to 15% and the threshold from which those payments are made will decrease from £9,100 to £5,000.
- The Employment Allowance, allowing eligible small businesses to reduce their NIC liability, is increasing from £5000 to £10,500.
Statutory benefit payments will increase as follows from 6 April 2025:
- Statutory maternity, paternity, adoption, shared parental, parental bereavement, and neonatal care pay will increase to £187.18 (from £184.03) per week (or 90% of the employee’s average weekly earnings, whichever is lower). The lower earnings limited to qualify for these payments increases to £125.
- Maternity allowance (for those not qualifying for Statutory Maternity Pay) also increases to the maximum of £187.18 (from £184.03) per week (or 90% of the employee’s average weekly earnings, whichever is lower). The threshold for maternity allowance will remain at £30 per week.
- Standard Statutory Sick Pay (“SSP”) rises to £118.75 (from £116.75). The lower earnings limit to qualify for SSP increases to £125.
Employment Rights Bill
The government has just published its responses to five consultations:
- Collective redundancy breaches: Employers failing to inform and consult on collective redundancies correctly will face a potential increase in the maximum protective award from 90 days’ pay to 180 days’ pay per employee. Employment tribunals are able to vary the length of the protective period for an employer’s failure to meet consultation requirements. New rights to interim relief in collective redundancies will not be introduced.
- Agency workers: Agency workers will have the same rights as zero and lower paid workers to a contract that reflects the hours they normally work. They will also have the right to reasonable notice of shifts and to be paid a proportionate sum if those shifts are cancelled or changed at short notice. The government is proposing an amendment whereby end employers will be responsible for offering guaranteed hours and agencies will be responsible for short notice of shift cancellation and payment of compensation. Further consultation will take place with employers, agencies, and trade unions on the detail of future regulation.
- Statutory Sick Pay: As well as making SSP a day one right, it will be extended to low-paid workers at either 80% of their weekly pay or £116.75 (the standard rate), whichever is the lower. It is anticipated that this measure will benefit 1.3 million low wage workers.
- Industrial relations: The legal framework governing industrial relations will be modernised to align it with modern work practices.
- Umbrella companies: Umbrella companies will be defined and regulated under the Bill. They will be required to offer workers the same protections as they would receive via a recruitment agency. Enforcement action can be taken against any umbrella companies that do not comply.
Neonatal Care (Leave and Pay) Act 2023
Coming into force on 6 April 2025, the Act will enable employees to take time away from work specifically to care for their babies who are under neonatal care (i.e. a baby who requires special care as a result of premature birth or illness within the first 28 days of birth). Care must also be for a period of at least 7 continuous days (beginning on the day after neonatal care starts). Eligible parents will be entitled to take up to 12 weeks of statutory neonatal care leave under the Act (and, if eligible, pay for this time). This entitlement is on top of any other leave that they may be entitled to, including maternity leave, paternity leave and shared parental leave. For more detail on the Act and how it will affect you, please read our article ‘Neonatal Care Leave – New Entitlement in April 2025’.
‘Keep Britain Working’ Review
Tackling the cost of welfare benefits has become a priority as more money is needed to boost the UK’s defence capability. Approximately a third of working age people (those aged 16 – 64) report having a long-term health condition, of whom 25% are classed as disabled. Sir Charlie Mayfield, former chairman of John Lewis, is leading a panel reviewing why unemployment due to ill health is rising and what employers are currently doing to help employ, train and retain disabled people and those with health conditions. The second part of the review is to recommend how employers can improve their recruitment, return to work, and retention practices.
Remote and hybrid working
On 5 March 2025 the House of Lords Home Based Working Committee launched a call for evidence into the effects and future development of remote and hybrid working in the UK. It is specifically concerned with the effects on productivity, mental and physical health, challenges and opportunities for both employers and employees, and what legislative changes, if any, are needed to support remote and hybrid working. The deadline for submissions is 25 April 2025.
Acas report on neurodiversity
Acas published its report on neurodiversity on 6 March 2025. It highlights that 15 – 20% of the workforce is neurodiverse and that employers should aim to create a neuroinclusive workplace proactively through training, policies and practices without the need for individuals to have to disclose their neurodivergent status or have obtained a formal diagnosis. The report reveals that taking a proactive approach can significantly reduce staff turnover. The research found that one small business which is incorporating neuroinclusion proactively, reduced its staff turnover to 8%, against a national average of 34%. Acas emphasises that this report is advisory and not formal guidance.
Case update
Employee’s appeal against dismissal for expressing belief ‘in an offensive manner’ upheld
Higgs v Farmor’s School
Mrs Higgs was dismissed from her administrative pastoral role at a Gloucestershire secondary school, Farmor’s School, after a parent alerted the school’s head to Mrs Higgs social media posts complaining that her views were offensively homophobic and transphobic. She had posted comments on her Facebook page criticising the government’s approach to making relationship and sex education compulsory in secondary schools and promoting same sex marriage and gender fluidity, a position that was directly contradictory to her Christian beliefs.
At the investigation and disciplinary hearing, Mrs Higgs confirmed that she was neither homophobic nor transphobic, would not treat gay or transgender individuals differently nor bring her views into the school. Following on from this, she was dismissed for gross misconduct on the basis of “inflammatory and quite extreme” language and breach of the School’s Code of Conduct. Her claim was for religious discrimination on the basis of her Christian faith, though the Tribunal found that it was her gender-critical and sexual orientation-based views which formed the basis of her claim rather than her religion itself. The Employment Tribunal rejected that she was discriminated against due to her beliefs, but for the possible reputational damage for the school from Mrs Higgs’ manifestation of her views which were discriminatory against those with protected characteristics.
Mrs Higgs appealed. The EAT allowed her appeal and remitted the case back to the Employment Tribunal as the latter should have applied the proportionality test in determining whether the right balance was struck between Mrs Higgs’ right to express her Christian beliefs on the subject of same sex marriage and gender fluidity, and the way in which they were expressed, which may have caused offence. In essence, the Employment Tribunal had not considered whether the social media posts had been an expression of her Christian beliefs, which are protected. Mrs Higgs appealed to the Court of Appeal on the grounds that the EAT should have upheld her claim.
The Court of Appeal allowed Mrs Higgs’ appeal against the EAT decisions. It found that gender-critical beliefs were protected under the Equality Act 2010. If the expression of the belief is objectively objectionable then a dismissal can only be permitted where the employer can show that it is a proportionate response. In a helpful summary at the end of the judgment, Lord Justice Underhill noted ‘that neither the language of the posts nor the risk of reputational damage were capable of justifying the Claimant’s dismissal in circumstances where she had not said anything of the kind at work or displayed any discriminatory attitudes in her treatment of pupils.’
This judgment gives critical guidance on how employers should treat disciplinaries relating to conduct on social media outside of work. The bar set by the Court of Appeal appears to be a high one for what is objectionable conduct to justify a dismissal. Here, the Court of Appeal found Ms Higgs’ comments capable of being offensive but not grossly offensive and therefore not meeting the criteria for dismissal to be proportionate outcome.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
