Employment law changes 2025: guide for schools and colleges
Happy new year to all of our readers.
Significant changes are on the horizon over the next 12-18 months which will impact your budgets and increase the employment rights of your staff.
The biggest change is the Employment Rights Bill which is likely to complete its progress through parliament in 2025. Most of the proposed changes won't come into effect until 2026. Although that may seem like a long time away, we recommend that you plan ahead and participate in relevant consultations that are likely to adversely impact the education sector in the hope that the government will make some of its proposals easier to swallow.
Pay and Wages
National minimum wage
From April 2025, the National Living Wage (payable to workers aged 21 and above) will go up by 6.7% from £11.44 to £12.21 an hour. This is worth an extra £1,400 per year for full-time workers.
The National Minimum Wage will increase by 16.3% for 18- to 20-year-olds - from £8.60 to £10.00 an hour. This increase of £1.40 is the biggest on record for the National Minimum Wage and is the first step in the government's pledge to align the National Minimum and National Living Wage over time, creating a single adult rate.
The apprentice rate and the rate for those under 18 years old is also increasing. It will rise from £6.40 to £7.55 an hour which is an 18% increase.
National Insurance contributions
The National Insurance (NI) rate paid by employers will rise by 1.2% from 13.8% to 15% by April 2025. Additionally, the threshold at which employers start paying NI on a worker's earnings will be reduced from £9,100 a year to £5,000.
Statutory rates
There are some modest increases in statutory payments which will take effect from April 2025:
- The weekly rate of Statutory Sick Pay will increase to £118.75 (currently £116.75)
- The weekly rate of Statutory Maternity Pay, maternity allowance, Statutory Paternity Pay, Statutory Shared Parental Leave Pay, and Parental Bereavement Pay will be £187.18 (currently £184.03)
- The lower earnings limit (the minimum amount an employee needs to earn each week to qualify for these payments, other than maternity allowance) will be £125 - an increase of £2 from the current rate. The lower earnings limit for maternity allowance will remain at £30 a week.
Collective consultation
Protective awards
In certain circumstances, employers are obliged to carry out collective consultation. If an employer fails to comply with their collective consultation obligations, where relevant, then the tribunal may order them to pay a protective award of up to 90 days' pay to each employee affected.
From 20 January 2025, tribunals will be able to increase this protective award by up to 25% if the employer has unreasonably ignored a relevant Code of Practice (including the Code of Practice on Dismissal and Re-engagement). On the other hand, if the employee is the one who hasn't followed the Code, their compensation can be reduced by up to 25%.
Trigger to collectively consult
Currently, employers proposing 20 or more redundancies ‘at one establishment’ within a period of 90 days or less must collectively consult with a recognised union or employee representatives before making anyone redundant. If they don't, employees can claim a protective award of up to 90 days’ pay.
The Bill removes the words ‘at one establishment’ which means that employers will need to count any proposed redundancies across all of their sites or premises to work out if they need to embark on collective consultation. This change will come into effect once the Bill becomes law.
Family Rights
Neonatal care
The Neonatal Care (Leave and Pay) Act 2023 will enable parents whose newborn baby is admitted to neonatal care to take up to 12 weeks of paid leave, in addition to any other leave they are entitled to take.
Further regulations are needed to implement the right which is expected to take effect from April 2025.
Paternity leave and bereavement
The Paternity Leave (Bereavement) Act 2024 will eliminate the need for fathers and partners to have worked for at least 26 weeks before being eligible to take paternity leave where the mother, or an individual with whom a child is placed or expected to be placed for adoption, has died in the first year after birth or adoption.
The government has not said when they expect this new right to take effect, and again further regulations will be needed to flesh out the detail.
Employment Rights Bill
General employment changes
The Employment Rights Bill was introduced to Parliament on 10 October 2024 and contains a significant number of proposed changes to employment law including the right to claim unfair dismissal from the first day of employment and reintroducing liability of employers for third party harassment. Most won't come into force until 2026. But there are a few exceptions including changes to the trigger for collective consultation and repealing legislation relating to industrial action and trade unions.
You can find a detailed overview of the Bill here and read about some of of the amendments that have been put foward so far here and here.
The government has already started to consult on a number of provisions in the Bill. More will follow. It places weight on the number of responses it receives from interested parties and we strongly recommend that you identify the proposals which are likely to have a significant detrimental impact on your school or college and clearly set out your concerns when the consultations lands. We'll let you know when each new consultation is announced.
Education specific changes
The Employment Rights Bill will reinstate the School Support Staff Negotiating Body which was abolished in 2010.
The SSSNB will be made up of representatives of employers, unions and an independent chairperson and will be required to make sure support staff are paid fairly and have access to training and career progression opportunities. It will apply to support staff in both local authority maintained schools and academies.
Other employment changes
In addition to the Employment Rights Bill, we are also expecting a new Equality (Race and Disability) Bill to be laid before parliament at some point. This is likely to include measures such as extending pay gap reporting to ethnicity and disability for employers with more than 250 staff.
The government has also said that it will implement other changes through alternative routes. A new right to switch off from work is expected, for example, to be introduced through a new statutory Code of Practice.
Other (potential) education changes
Guidance on gender questioning children
We don't yet know how the new government will approach the previous government's controversial draft guidance on gender questioning children or proposed changes to the statutory guidance on teaching relationships, sex and health education. Both pieces of guidance were consulted on in 2024.
Children Wellbeing Bill
We expect the government to introduce a new Bill to help improve the wellbeing of children in England. It will require every primary school to have a free breakfast club; require local authorities to publish a register of all children who are not in school and make it mandatory for all schools (including academies) to teach the national curriculum.
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