The Future of UK Workplace Rights: Employment Law Updates for 2025

2025-2026 is going to be a significant period in the UK’s employment landscape as the government is pushing forward major reforms to ensure the protection of workers’ rights.

From the new minimum wages to the changes in the dismissal laws, we are expecting some major updates that would impact workplaces across the country.

However, the government is focusing on proper consultation before the implementation of these updates. After the publication of four consultations at the end of 2024, new discussions are expected this year.  

Though most of these reforms will take effect in 2026, understanding the proposed changes with the guidance of an employment barrister can help both employers and employees to navigate these legal shifts.

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In this blog, we will break down key updates in UK employment law for 2025 and what they mean for you. Let’s get started to learn more.

• Employment Right Bill

The Employment Right Bill (EBR) is a major part of the new updates including 28 reforms in the employment laws. It was initially published on 10 October 2025. However, some of these reforms are under consideration for further consultation in 2025, including:

• Collective Redundancy Rules

For businesses operating at multiple locations, the UK government is planning some changes to the collective redundancy rules. According to the current rules, collective redundancy is the requisite for the employers who are making 20 or more redundancies within 90 days at a single workplace. However, the new law amends the “Single workplace” rule. It means that now the redundancies will be counted collectively across all locations. 

• Zero Hours Contract

The EBR has proposed new laws for the protection of rights of the workers who are on zero-hour and low-hour contracts. Under this bill, after looking at the 12 weeks of reference periods, workers who are regularly working more hours than their contracts can opt for a guaranteed hours contract. Moreover, if the employer intends to make shift changes, they need to provide a reasonable notice. Also, compensation is mandatory for last-minute shift changes. 

• Unfair Dismissal

Under the Employment Right Bill (EBR), the UK government is planning to eliminate the 2-year qualification period, making the protection against unfair dismissal a day-one right for the workers. Nevertheless, there will be an initial period of employment during which the employers can follow a “light touch” dismissal process to dismiss employees who are unfit for the job. 

• Draft Equality (Race and Disability) Bill

This bill aims to reinforce equal rights for the ethnic minorities and disabled individuals at their workplaces. One key update is the mandatory ethnicity and disability pay gap reporting for organizations with over 250 employees. Though the Equality Act 2010 also guarantees the same pay equality, this new bill will further clarify the legal rights of the individuals who are facing disparities while simplifying the claims process. 

• Neonatal Care (Leave and Pay) Act 2023

This Act is expected to take effect in April 2025 and is in addition to the existing maternity and paternity entitlements. Under this act, the parents of newborns who are admitted to a hospital and receive neonatal care can apply for up to 12 weeks of paid leave. This act is applicable under the following conditions:

• The baby must be admitted to the hospital within 28 days of birth and must be there for at least 7 consecutive days. 
• The employee requesting leave must have spent 26 weeks of continuous employment and earning at least 123 pounds per week.
• The leave can be taken within 68 weeks of the baby’s birth. 

• Increase in the National Minimum Wage

The new worker laws suggest an increase in the minimum wages of workers of all age groups to narrow down the pay gap between the young and adult workers. This reform signals a potential extension of the National Living Wage to include 18-year-olds too. The updated UK minimum wage rates that are going to be implemented from 1 April 2025 are:

• For Ages 21 and over: £12.21 per hour (+£0.77)
• For Ages 18–20: £10.00 per hour (+£1.40)
• For Ages 16–17 and Apprentices: £7.55 per hour (+£1.15)

The employers must follow this new pay structure to avoid liabilities and reputational damage. 

• Failure to Prevent Fraud

From 1 September 2025, employers will face criminal liability if a fraud is committed at the workplace by their employees or other associates unless the employer can prove that they have reinforced stringent preventive measures in their company against fraudulent activities. To avoid liability, regular risk assessment, system updates, and surveillance are mandatory to stay compliant. A large-scale corporate employer falls under this law if it meets a minimum of two of the following conditions. 

• Turnover: Over £36 million
• Total assets: Over £18 million
• Employees: More than 250

• Final Takeaway

The UK employment law reforms are bringing new responsibility for the employers to stay compliant with the new rules and ensure the protection of the employees at the workplaces. From the increase in minimum wages to the collective redundancy and stress on adopting fraud prevention measures, each reform pushes employers to adopt a proactive approach to prepare the workplaces for the upcoming legislation. 

Now, it is the time for businesses to review their work policies and update contracts to ensure a smooth adaptation to the evolving legal framework.