Employment law

Employers need to ensure that staff handbooks and relevant family friendly policies are updated to refer to the new right to neonatal care leave for parents. From 6 April 2025, leave is available where the child goes into neonatal care for at least seven days within 28 days of birth. Eligible employees are entitled to up to one week of leave for each full week the child spends in neonatal care, up to a maximum of 12 weeks' leave. The leave must be taken within 68 weeks of the child's birth and will typically be taken after maternity, paternity, adoption or shared parental leave. There is no service requirement for the leave, but parents need at least six months' service with their employer to be eligible for statutory pay – this is paid at the same statutory rate as maternity pay (from 7 April 2025, £187.18 per week or 90% of average weekly earnings if lower). Employers may also wish to consider how the right will interact with existing enhanced family leave and pay arrangements.

Employers in the UK with 250 or more employees must report on their gender pay gap figures annually. The Government has launched a public consultation setting out proposals to introduce mandatory disability and ethnicity pay gap reporting. The new reporting requirements would mirror the existing framework for gender pay gap reporting and apply to employers with 250 or more employees. However, there are distinct considerations for ethnicity and disability, particularly regarding data collection and analysis. It is proposed that, in addition to pay gap figures, employers would be required to report on the overall breakdown of their workforce by ethnicity and disability, as well as the percentage of employees not disclosing their personal data for these characteristics.

The Government is also seeking views on whether employers should be required to produce action plans, to help identify the causes of any gap and action to close it. Like gender pay gap reporting, employers would be required to report their ethnicity and disability pay gap figures online annually. The consultation closes in early June, with the new pay gap reporting duties not expected to come into force until 2026.

A new Employment Rights Bill will introduce a number of significant reforms to UK employment law. It is anticipated that the Bill will be passed later this year, but most of the reforms are not expected to come into force before 2026. Key changes include:

• Dismissals: making it more costly and difficult to dismiss staff by extending the protection against unfair dismissal. The current two-year qualifying service requirement for unfair dismissal claims will be removed, with a new statutory probationary period introduced, during which a light-touch dismissal process will apply.
  
  
• Flexible working: introducing a new requirement on employers to demonstrate that any rejection of a flexible working request is reasonable.
  
  
• Diversity reporting: requiring large employers to publish menopause and gender pay gap action plans, alongside existing gender pay gap reporting requirements, and introducing mandatory ethnicity and disability pay gap reporting (see above).
  
  
• Large scale redundancies: changing the threshold for collective redundancy consultation requirements so that the duty is triggered more easily and doubling the penalties that apply for failure to comply.

• Restructuring: severely restricting "fire and rehire" practices, making it much more difficult for employers to change terms and conditions of employment without employees' agreement.
  
  
• Casual and agency workers: introducing new rights for casual and agency workers to be offered a contract reflecting the hours actually worked, and to receive reasonable notice of shifts and compensation when shifts are cancelled.
  
  
• Trade unions: requiring employers to provide staff with information about trade union rights and making it easier for trade unions to call strikes and seek the right to bargain collectively on behalf of workers.

For more about the Government's plans and what they mean for employers, read our briefing Employment Rights Bill What does it mean for employers? | Travers Smith.