UK employment law round-up: May 2025

Questions on the Employment Rights Bill 

At the time of writing, the Employment Rights Bill (ERB) is at the Committee stage in the House of Lords. Public Affairs Manager Carl Quilliam provides a detailed briefing outlining what this stage means for employers, and how we’re representing members’ concerns to government. 

In addition to this, based on ongoing feedback from our members, we understand there are several questions regarding specific aspects of the bill. We’ll now take the opportunity to address these: 

Unfair dismissal  

Firstly, there is ongoing interest around the proposed changes to unfair dismissal procedures. The proposal to remove the two-year unfair dismissal qualifying period and replace it with a shorter statutory probation period is well-documented. What is of concern for the profession now is how this would impact day-to-day procedures.  

Firstly, for context of a potential timeline for these changes, this matter has not yet been subject to consultation. As such, the government’s indication that any changes - such as introducing a statutory probationary period and removing the current qualifying period for unfair dismissal - would not take effect before autumn 2026 appears to be a realistic timeline. 

Secondly, in advance of any change, employers will want to interrogate their contracts and processes to prepare for any change, for example:  

• Recruitment process – is the business currently identifying fully the skills and qualities they want from an employee? We provide a skills matching guide that can aid employers to assess skills, plan skills development and deploy (and redeploy) staff
• Induction periods – is the business currently managing and documenting induction periods in a detailed manner?
• Contractual arrangements – is there anything in the business’s employee handbook or contracts of employment that would need to change if these proposals were to come into force? 

Collective consultation 

We understand that employers are concerned how redundancy processes will be impacted if the threshold for collective consultation is changed. If this change were to go ahead then employers would need to count planned redundancies across all sites instead of using the ‘at one establishment’ rule (the ‘all sites’ categorisation would be based on a test which is yet to be decided). In addition, under the ERB there are proposals to increase the protective award for failed collective consultation processes.  

Our policy experts state that once more detail is confirmed, employers should brief and train managers and employee representatives on the changes, consider setting up a standing body of employee representatives (ready to represent employees when needed), and be prepared to have a method to count planned redundancies across all sites. 

Ethnicity and disability pay gaps 

This is not strictly covered in the ERB – it falls under the wider Plan to Make Work Pay, and more specifically the Equality (Race and Disability) Bill – but can be considered in this list of concerns for the profession.  

Matters that relate to ethnicity and disability pay gaps are currently under consultation, and, as detailed in the April employment law roundup, the consultation considers points such as how these reports would work in practice, and what measures would be needed to ensure that organisations do not outsource services to avoid pay gaps.  

For employers who want to plan ahead of any proposed change, the CIPD provide guides on recommended approaches to disability workforce reporting (policies, practices and culture) and ethnicity pay gap reporting. 

Immigration white paper 

On 12 May 2025, UK Prime Minster Sir Keir Starmer announced an immigration white paper detailing proposals to reduce migration. You can keep track of any progress of these proposals in the employment law timetable.  

If enacted, the proposals will impact employers and workers.  

For workers, various stringent visa requirements, in addition to a doubling of the time period before they can achieve settled status, all impact considerations about working in the UK. 

For employers: 

• both the higher educational requirement for skilled worker visas and the end of the immigration salary list may mean employers need to rethink recruitment strategies and training processes
• the phased ending of social care visas (to be completed by 2028) rules these out as a recruitment method for the sector, so employers will need to look domestically
• sectors critical to industrial strategy or infrastructure delivery may benefit from temporarily relaxed educational requirements for applicants, potentially easing recruitment challenges
• in sectors recruiting highly qualified individuals, the government is proposing to ease access to HPI visas for these individuals – making it easier for employers to recruit
• the 32% increase in the employer-paid immigration skills charge means that employers would need to budget for this change  
• employers taking on workers on temporary worker visas would need to be aware that the proposed changes mean that the workers could move between licensed sponsors more freely 

People professionals will know that the matters in the paper are currently considerations. If any matter moves into a legislative process, you can find out more in the employment law timetable. Individual legal queries should be directed to the employment law helpline. 

The current rules on employing overseas workers are covered in this guide.   

Tribunal on the liability of external HR consultants 

Handa v Station Hotel (Newcastle) Ltd and others [2025] considered whether external HR consultants could be held liable in an unfair dismissal claim (due to their role in a grievance and disciplinary process that led to dismissal). The EAT upheld the original tribunal decision; the consultants were not liable as they did not make the decision to dismiss and “there was no arguable basis advanced for the contention that these two respondents were each co-liable, as agents, for the dismissal”. Practitioners can read the judgement for further information.