Recent Changes to Employment Law

By Natasha Smith, Senior Associate Employment Solicitor at Parfitt Cresswell

July 1 2025 - Significant changes came into effect in employment law in 2024 and, with many more on the horizon, it is a crucial time for businesses to ensure they are up to date with their legal obligations. This article provides an essential overview and advises on steps employers should take.

1. The Employment Relations (Flexible Working) Act 2023

This act made the following changes:

• Flexible working is a 'day 1' right.
• Staff can make two requests in any 12-month period.
• Employers must deal with flexible working requests within two months.
• Staff do not have to explain what effect their request has on the organisation.

The business reasons for rejecting a flexible working request have not changed, and an employee's right to request flexible working is not the same as having a right to have it agreed. However, employers could see an increase in requests, and they should ensure policies are updated.

2. The Carers Leave Act 2023

Employees can take 1 weeks' unpaid leave every 12 months to give or arrange care for a dependent. The leave does not have to be taken as a whole week - it can be taken in single or half days throughout the year.

3. The Protection from Redundancy (Pregnancy and Family Leave) Act 2023

Existing protections have been extended, and the 'protected period' now applies during pregnancy, maternity leave and for a period of 6 months after maternity leave ends.

In the event of redundancies during the 'protected period', priority must be given to protected employees. This means that they must be first in line to be offered suitable alternative employment (if there is one).

Employees who take neonatal care leave are also protected from redundancy.

4. The Worker Protection (Amendment of Equality Act 2010) Act 2023

Employers have a positive legal obligation to take reasonable steps to prevent the sexual harassment of workers - the 'preventative duty'. If breached, the Equality and Human Rights Commission can take enforcement action. Employment Tribunals can also increase compensation by up to 25%.

No employer is exempt from the duty and all employers should therefore:

• Consider the risks of sexual harassment and the steps they could take to reduce that risk;
• Consider which of those steps would be reasonable for them to take; and
• Implement those steps.

Prevention is better than cure. Having an inclusive culture, training staff and ensuring there is an effective reporting process in place will be important.

Upcoming changes to Employment Law

Within 100 days of the Labour Government coming into office, details of the Employment Rights Bill were unveiled. Whilst these are currently still only proposals, the potential impact on employers will be significant.

The Bill is intended to grant new rights to millions of workers and is the most extensive overhaul of worker's rights in generations. Some key topics and their implications are highlighted below:

1. Unfair dismissal: the requirement for an employee to have been employed for 2 years will be removed and unfair dismissal will be a day 1 right.
2. Probation: a statutory probation period will be introduced.
3. Zero-hour contracts: workers will have rights to a contract with guaranteed hours; reasonable notice of any changes to hours and compensation for cancelled shifts.
4. Fire and rehire practices: dismissing an employee because they refuse to sign different terms will be automatically unfair. However, exceptions will apply if employers can demonstrate financial difficulties.
5. Paternity, parental and bereavement leave: a new right to bereavement leave, greater protections from dismissal for parents and rights to take paternity leave and unpaid parental leave from day 1.
6. Trade Union Rights: employers will need to include details of the right to join a trade union in their Section 1 statements. They must also grant access to unions to meet or recruit workers in the workplace.
7. Flexible working: flexible working will become the default unless employers can prove a refusal to allow flexible working is reasonable.
8. Statutory Sick Pay (SSP): workers will be entitled to SSP from day 1 of sickness and those earning less than the threshold will be entitled to SSP.
9. Collective Redundancy: consultation with trade unions will be required when 20 or more employees are made redundant across the entire business, rather than just at a single establishment.
10. Sexual harassment: employers will be required to take all reasonable steps to prevent sexual harassment in the workplace.
11. Third party harassment: a new obligation on employers to not permit harassment of their workers by third parties (e.g. Customers).
12. Fair Work Agency: will be introduced to improve the enforcement of employment rights, such as holiday pay and SSP entitlements.
13. Employment Tribunal time limits: the timeframe for issuing employment claims will be extended from 3 to 6 months.

Whilst the Bill hopes to bring about greater protection for staff, numerous concerns have been raised. Many of the changes are not due to take effect until Autumn 2026, following a lengthy period of consultation. This delay leaves employers in limbo with workforce planning and budgeting forecasts and leaves workers uncertain about their rights.

In addition, recently released Tribunal statistics show an alarming increase of almost 40% open cases over the past year. With the rising tide of employment litigation expected, without sufficient additional funding in place, it is highly likely the Tribunal system won't be able to deliver the access to justice the Government plans for the Bill to provide. Not only will it be difficult for workers to enforce their rights within a reasonable timeframe, but it will result in increased managerial time and legal costs for employers.

Steps to take now to prepare

For Businesses:

• Audit Contracts and Policies: Review and update policies and contracts.
• Training: Provide training, particularly around dismissal, harassment prevention, and flexible working.
• Engage Early: Start consulting with employees and trade unions on necessary changes.

For Individuals:

• Understand Your Rights: Familiarise yourself with your enhanced protections and entitlements.
• Seek Advice: If you feel your employment rights are not being respected, consult with a legal professional.

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