Welcome to our first Employment Law Update of 2025!
In this month's edition, there's a reminder of the forthcoming changes to National Insurance Contributions (NIC) and the National Living Wage (NLW). We also provide an update on the Employment Rights Bill and news that McDonald's have found themselves in trouble again!
Reminder – forthcoming changes to NICs and NLW
Increase in employer NICs: from April 2025 the following will apply:
- 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.
National Living Wage: from 6 April 2025 the following rates will apply:
- £12.21 per hour (a rise of 6.7%) for adults aged 21 and over.
- £10 per hour (a rise of 16.3%) for those aged 18 – 20.
- £7.55 per hour (a rise of 18%) for those aged 16 – 17 and apprentices.
The government’s long-term objective is to align the NLW with the National Minimum Wage (NMW) for all adults, effectively creating a single minimum rate for all adults.
Hire and Fire: Employment tribunals can uplift awards by 25%
The government’s statutory Code of Practice on dismissal and re-engagement (‘the Code’), which regulates the ‘firing and re-hiring’ of staff, came into force last summer. From 20 January 2025, Employment Tribunals will have the power to apply an uplift of up to 25% to any compensation awarded against those employers it finds have unreasonably failed to follow the Code. Tribunals will also be able to reduce compensatory awards made to employees by up to 25%, where the employee has unreasonably failed to comply with the Code. Employers are not legally obliged to follow the Code but the threat of a hefty increase in a potential award is a useful warning that they are expected to follow certain standards of behaviour when consulting with employees over proposed changes to their employment contracts.
Employment Rights Bill
The Business & Trade Committee launched an enquiry in December to consider if the Employment Rights Bill (laid before Parliament in October 2024) will achieve the government’s objectives including whether it will help to deliver the fastest economic growth in the G7. Although it is anticipated that the Bill will receive Royal Assent in the second half of 2025, the government has suggested that most changes are unlikely to be implemented until 2026, with one of the most contentious proposals, the day one right to claim unfair dismissal, delayed until Autumn 2026. Many businesses are understandably nervous about how this will affect their business and are reviewing their recruitment needs now, based upon the limited information available. Although we don’t know with certainty what the final changes will look like, there are mitigating steps businesses can begin to consider now. Please contact a member of the team for advice regarding this.
McDonald’s in trouble again
In 2023 the BBC reported on allegations made by numerous workers at McDonald’s about their exposure to sexual assault, harassment, racism and bullying. In response, McDonald’s signed an agreement with the ECHR to implement certain measures, such as training, in an effort to stamp out inappropriate behaviour. It appears, however, that few lessons have been learnt as a new BBC report reveals that over 700 current and former McDonald’s employees are taking legal action following further allegations, implicating over 450 outlets across the UK. At the beginning of January, McDonald’s UK CEO went before Parliament’s Business & Trade Committee to answer questions on the franchise operation’s working conditions and treatment of staff, how the organisation is seeking to prevent poor working conditions for staff and the zero-hours contracts that apply to 89% of staff.
McDonald’s was not the only UK organisation to be quizzed by the Committee on how it ensured the safety of its staff in the workplace; the same meeting also saw submissions from Shein, Tesco and the British Retail Consortium. Following the strengthening of employer obligations in relation to preventing sexual harassment in the workplace in October 2024, this is timely reminder of the importance of being proactive. Having a comprehensive training plan in place so that no one is in any doubt about acceptable standards of behaviour in the workplace and having effective reporting channels in place are two primary methods that employers should be implementing. Nonetheless, the reasonable steps required to meet employer obligations will depend on factors including the size and type of employer. Please contact a member of the team if you would like advice and / or training on complying with the Worker Protection legislation.
Employment law & HR training sessions
Our employment team’s half or full day interactive training sessions, alongside our more informal Lunch and Learn sessions, are tailored to update employers on both recent and upcoming changes in legislation, raise awareness of employees’ legal rights and obligations and provide guidance on conducting a variety of internal HR procedures in line with legal obligations and best practice. Please get in touch with the team if you would like to book a session, or for a full list of the sessions we offer.
Our most recent offering is a joint training session with Conduct Change. Tina Chander and Nicki Eyre, Director of Conduct Change, will be delivering sessions designed to educate both employers and employees on the legal and emotional aspects of workplace bullying and harassment. Sessions are £2,500 + VAT and can be held either remotely or face to face, either at your premises (subject to travelling expenses) or ours. Please get in touch with us for more information.
Employment guides
Procedural errors in HR processes can be time-consuming and costly. In response to regular requests from clients to help them resolve common HR issues arising from procedural errors, we have developed a set of step-by-step templated guides to help businesses follow best practice and in turn avoid unnecessary Employment Tribunal claims.
To date, we have developed four guides:
- Pre-Employment Guide (including the Application and Interview Process, plus Pre-Employment Checks);
- Sickness Absence Guide;
- Capability Guide; and
- Disciplinary Procedure Guide.
Please contact a member of the team for more information and prices.
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.
