Welcome to our spring edition of CL Q.E.B
- John Hayes
- Apr 8
- 7 min read
Since our last edition, the national and international economic outlook looks very different. Leaving aside what might, or might not happen, to global markets following the application of widespread tariffs by the Trump Administration, businesses have much to deal with in the here and now. New rises in National Insurance, the National Minimum Wage, and statutory payments have all come into effect, and the Employment Rights Bill, accompanied by extensive amendments, continues to be carefully scrutinised both in and outside Parliament. Commentators believe that the Bill, at its current progress, may receive Royal Assent in July.
A reminder…
Increase in the NLW and NICs
Increases to the national living wage took effect from 1 April 2025 and are as follows:
1. Age 21 and over - £12.21 (up from £11.44)
2. 18 – 20 - £10.00 (up from £8.60)
3. 16 – 17 and apprentices - £7.55 (up from £6.40)
As all employers will be very aware, NICs increased to 15% from 6 April 2025 with a starting threshold of £5,000, reduced from £9,100. Some of the financial pain for eligible small businesses will be reduced as the Employment Allowance increases to £10,500 from £5,000.
Statutory payment increases from 6 April 2025
Sick pay: Increased to £118.75 per week.
Maternity, Paternity, Shared Parental, and Adoption pay: the lesser of either £187.18 or 90% of average weekly earnings. The qualifying minimum weekly earnings for family-related payments remains unchanged at £125 a week.
Redundancy pay: Maximum statutory pay for a week is £719 and the maximum redundancy payment is £21,000.
Unfair dismissal
Basic award: Maximum amount for unfair dismissal is £21,570.
Maximum compensation: Maximum# compensatory award for unfair dismissal is £118,223*
# The maximum compensatory award applies to most unfair dismissal claims unless the dismissal qualifies as automatically unfair (such as for health and safety reasons or whistleblowing) in which case there is no maximum.
* The maximum compensatory award has increased but as stated above is also limited to a payment of 52 weeks’ pay if that is lower than the maximum.
Vento Bands increase
The levels of financial compensation for ‘injury to feelings’ awards in cases of discrimination and detriment increased as follows:
Lower band: £1,200 to £12,100 (less serious cases)
Middle band: 12,100 to £36,400 (those that do not merit a higher award)
Upper band: £36,400 to £60,700 (the most serious cases)
For exceptionally serious cases where there is no limit on injury to feelings awards, the upper band could exceed £60,700. These types of awards are very rare.
Neonatal Care Leave and Pay
Neonatal Care Leave and Pay took effect from 6 April. From day one of their employment, employees whose babies are born after 6 April 2025 and require specialist hospital care for at least seven continuous days within the first 28 days of birth, are entitled to take up to 12 weeks leave. Furthermore, employees with 26 weeks continuous employment are entitled to statutory pay (providing their earnings are not less than the Lower Earnings Limit). Eligibility criteria, entitlement and notification periods are set out in the Neonatal Care Leave and Miscellaneous Amendments Regulations 2025.
Employment Rights Bill: Updates
The Employment Rights Bill continues to occupy considerable amounts of parliamentary time. We have included all the below in our recent update which you can find here but we outline the main points below:
Government response to five consultations
Zero hours contracts and agency workers: All UK agency workers should receive a contract that reflects the hours they usually work, reasonable notice of shifts, and proportionate pay for any shifts that are cancelled, curtailed or moved at short notice. The end hirer will be responsible for offering guaranteed hours; and responsibility for giving reasonable notice of shifts and compensation for last minute changes will rest with both the end hirer and the agency (the latter will have to negotiate recovery of compensation with end hirers). John Hayes, Managing Partner of Constantine Law, gives his views on how this will adversely affect employers in City AM, which you can read here.
Collective redundancy consultation: The protective award for failing to consult will double from 90 days to 180 days’ actual pay. An Employment Tribunal will be able to grant larger awards to employees for an employer’s failure to meet consultation requirements. The single establishment test to determine collective consultation will not be removed, as originally proposed. Instead a more business-friendly test will be confirmed.
Industrial Relations: The legislative framework within which trade unions operate, will be aligned with modern work practices. The intention is to ensure that industrial relations are underpinned by collaboration, proportionality, accountability, and a system that balances the interests of workers, businesses and the wider public.
Statutory Sick Pay: All those earning below the Lower Earnings Limit (£125 per week) will also have a day one right to SSP and will be entitled to 80% average of weekly earnings.
New regulations to follow. All employees will be entitled to SSP flat rate or 80% of average weekly earnings from day one
of sick leave.
Umbrella companies: Workers working through umbrella companies will have the same rights and protections as they would as if they had been engaged by recruitment business. Umbrella companies will be regulated by the Employment Agency Standards Inspectorate.
ERB: Additional amendments
Unfair dismissal: There will be an ‘initial period’ of employment within which a lighter touch procedure for dismissal can be used. The length of the period has not been confirmed: nine months appears to be the general view, but this will be subject to consultation.
Fair Work Agency: This will be the government’s enforcement agency with a wider remit and more powers to enforce holiday and other statutory pay regulations. Failure to comply will be a criminal offence and potentially unlimited fines. The FCA will be able to bring claims on behalf of workers, recovering costs from their employers if the latter are found to be non-compliant.
Fire and re-hire: There will now not be any interim relief for those affected by fire and re-hire. Only businesses that can prove exceptional circumstances, such as extreme financial crisis, will be protected from claims of automatic unfair dismissal by those affected by fire and re-hire.
Case law
Claimant’s legitimate expression of her beliefs not a reason for dismissal
Summary: In the final instalment of a long-running case, a claimant who had been dismissed for gross misconduct had her appeal for unfair dismissal upheld by the Court of Appeal. Mrs Higgs, the claimant, was a counsellor at a secondary school. A parent complained about the content of some of social media postings in which she had criticised sex and relationship education in primary schools, alleging that her posts indicated that she was transphobic and homophobic. Her claim hinged on the fact that she was discriminated against on account of her Christian beliefs, and her belief that biological sex is immutable, both of which are protected characteristics. At appeal, the court ruled that the original tribunal had not correctly determined that the school’s response to her legitimate expression of her beliefs was proportionate to the offence her remarks might have caused. Lord Justice Underhill noted that ‘that neither the language of the posts nor the risk of reputational damage were capable of justifying the Claimant’s dismissal in circumstances where she had not said anything of the kind at work or displayed any discriminatory attitudes in her treatment of pupils.’ This is a useful case for all employers on the assessing the impact of employees’ comments on social media that are unrelated to their place of work.
Claimant’s dismissal due to mistaken belief they had resigned can be fair
Summary: This long running case, dating back to 2020, had to answer the question whether or not an employer had dismissed an employee fairly, having genuinely believed they had resigned. Ms Korpysa was employed by Impact Recruitment Services and placed with Howdens, the joinery business. During lockdown, Howdens dispensed with the services of a number of staff including Ms Korpysa. She asked her manager at Impact for her outstanding holiday pay and, he believed, her P45. Believing that she had resigned as she had mentioned being offered another job, she was dismissed. Ms Korpysa claimed age discrimination and unfair dismissal on the basis that she had not requested her P45 but only a copy of her contract.
The Tribunal dismissed her discrimination claim but upheld her claim for unfair dismissal, on the basis that a genuine belief that she had resigned did not constitute a fair reason for dismissal. Impact appealed. The EAT took a different view, ruling that dismissing someone who had actually resigned could constitute some other substantial reason (SOSR) for a fair dismissal. Therefore, it remitted the case back to another tribunal to consider whether Impact’s decision to dismiss was for SOSR (namely Ms Korpysa apparent resignation) and if it was, whether her dismissal was fair or unfair.
Deliberately hiding employment history is fair reason to dismiss
Summary: Mr Easton had successfully applied for a job with the Home Office Border Force. As part of the job application process, he was required to complete his employment history but, in doing so, obscured the fact that there was three-month gap which had arisen because he had been dismissed for gross misconduct from another role in the Home Office. After this omission came to light, Mr Easton was dismissed for gross misconduct. He claimed unfair dismissal.
The Tribunal ruled that the dismissal was fair on the grounds that Mr Easton had deliberately avoided revealing this three-month gap in his employment history and the reasons for it. Mr Easton appealed on the basis that this information was not specifically requested either at the application stage nor at interview. The EAT dismissed the appeal, finding that the claimant’s reasons for not revealing his full employment history was disingenuous.