UK: Horizon scanning – what to look out for in employment law for 2025

What is changing in employment law in 2025?

New right to neonatal leave and pay

The new right to neonatal leave and pay, introduced under the Neonatal Care (Leave and Pay) Act 2023, will come into force on 6 April 2025. The right will support eligible parents by providing for neonatal care leave and neonatal care pay when their newborn requires neonatal care.

Neonatal care includes medical care received in a hospital or in another place having left hospital (e.g. at home) under the direction and ongoing monitoring of a consultant; or palliative or end of life care. Hospital in this context includes a maternity home, as well as clinics or outpatient departments.

The general eligibility criteria will be: (i) neonatal care starts within 28 days of birth and the baby spends at least 7 consecutive days in care; (ii) the employee has a parental or other personal relationship with the baby requiring care; and (iii) the baby is born on or after 6 April 2025.

Neonatal care leave will be a “day-one right”, meaning employees can benefit from this right as soon as they start a new role. They will be entitled to one week’s leave for every week the baby spends in neonatal care, up to a maximum of 12 weeks’ leave.  Leave must be taken within 68 weeks of the baby’s birth, either while neonatal care is ongoing or after other parental leave the employee may be eligible to take. Leave can be taken as non-consecutive or consecutive weeks, depending on when it is taken. Importantly, the leave must be taken to care for the baby. 

Up to 12 weeks’ neonatal care pay will be available to eligible employees who have at least 26 weeks’ continuous service and earnings of at least £125 per week on average (calculated from and including 6 April 2025). Neonatal pay will be the lower of the statutory rate (£187.18 for 2025/26) or 90% of the eligible parent’s average weekly earnings. 

Neonatal care leave and pay are available in addition to existing parental leave entitlements (i.e. maternity, adoption, paternity, shared parental leave). In line with other parental leave, there will be notice requirements for eligible parents to comply with which will vary depending on whether the neonatal leave is taken during or post neonatal care. However, the employer and employee can agree to mutually waive any notice requirements. 

It is expected that the UK government, ACAS and/or HMRC will publish further guidance before the rights come into force in April 2025. 

With limited time before the rights come into force, employers should take steps to:  

• prepare / update policies to reflect the new entitlements;
  
• ensure clear procedures are in place for employees requesting neonatal leave and pay;
  
• upskill managers and HR teams so that they are aware of and understand the new entitlements; and 
  
• issue employee communications about the entitlement and consider what support could be provided for employees who may need to take neonatal leave.  

National minimum wage changes

Last year, the Government adjusted the remit of the Low Pay Commission to ensure cost of living is factored into decisions on minimum wage rates and to take steps to remove the 18-20 year old rate and move towards a single adult rate. As a result, we will see a 16.3% increase to the 18-20 rate in April this year.  The annual updates which will come into force from 1 April 2025 are:

Equality (Race and Disability) Bill

The UK government’s ‘Next Steps to Make Work Pay’ policy paper (October 2024), published alongside the Employment Rights Bill, includes plans for a draft Equality (Race and Disability) Bill (the “Bill”). A draft Bill is expected during the course of 2025. 

In essence, the Bill intends to extend equal pay rights to allow equal pay claims based on ethnicity and disability. Currently, equal pay claims are limited to differences in pay based on sex. In addition, the Bill is expected to contain the following measures:

• An equal pay Regulatory Enforcement Unit, which may include trade union involvement.
  
• Prohibiting the use of outsourcing by employers as a means to avoid equal pay obligations.
  
• For employers with more than 250 staff, extending the existing gender pay gap reporting requirements to cover ethnicity and disability.

A consultation period will follow the publication of the draft Bill, which will give a better indication of what to expect from the government’s plans for equal pay. However, the law itself or any new obligations on employers are unlikely to come into effect until 2026 at the earliest.

In the courts in 2025

Protected beliefs: discrimination considered in the Court of Appeal and EAT

There are two significant legal case updates expected for 2025 on the difficult question of religion and belief discrimination. We are hoping that guidance might be provided on how to manage competing and often conflicting beliefs in the workplace. The Court of Appeal’s decision in Higgs v Farmor’s School is awaited and the Employment Appeal Tribunal (EAT) will hear the University of Bristol’s appeal of the Employment Tribunal’s (ET) decision in Miller v University of Bristol.

Higgs v Farmor’s School – Proportionality of interference with protected beliefs

This case involved a Christian school assistant, Mrs Higgs, who worked at Farmor’s School with pupils who were lesbian, gay, bisexual and/or transgender, or were questioning whether they were. Mrs Higgs holds various gender-critical beliefs, including a lack of belief in gender fluidity. 

The school dismissed Mrs Higgs after complaints surrounding her personal Facebook posts about LGBT+ relationships, which were considered offensively homophobic and transphobic. The ET decided that Mrs Higgs’ beliefs were protected under the Equality Act 2010 but it dismissed her claim, deciding that she had not been directly discriminated against or harassed because of her beliefs.  In February 2024, the EAT decided that the ET had failed to properly assess the proportionality of the school’s decision to dismiss Mrs Higgs and thus whether it amounted to unlawful discrimination because of her protected beliefs. This assessment is necessary where (as in Mrs Higgs’ case) the decision to dismiss relates to actions which have a close or direct connection to the claimant’s protected beliefs. 

The case was returned to the ET, but Mrs Higgs appealed against this on the basis that she felt the ET’s previous errors would risk her access to justice being denied. The Court of Appeal therefore heard all grounds of appeal instead last October and its decision is expected this year.

The case is important as it is expected to set a precedent on how to handle situations where there is a clash between an employee’s right to express gender-critical views and beliefs and other protected rights in the workplace. 

Miller v University of Bristol – Anti-Zionism as a protected philosophical belief

In the Miller claim, the ET decided that the anti-Zionist beliefs of an academic, working at the University of Bristol, qualified as a protected philosophical belief, such that his summary dismissal was unfair and amounted to direct discrimination. The ET’s decision has been appealed by the University to the EAT and is expected to be heard later this year.

The EAT’s consideration of this claim will be a source of interest for employers wondering how to approach employees who manifest philosophical beliefs which may be considered unpopular or controversial views.  Pending the EAT’s decision, which is unlikely to be published until 2026, employers should take care to consider the proportionality of any disciplinary action relating to employees expressing their personal beliefs in the workplace. 

We will be closely following the significant legal and case developments discussed in this article this year and will keep Frontline readers updated as matters progress. If you would like to discuss any of these developments in the meantime, please reach out to your usual contact in the Bird & Bird Employment team.