Employment Rights Bill updates

LThe Employment Rights Bill had its first reading in the House of Lords earlier this month, with the second reading scheduled to take place today. A consolidated version of the Bill, now a whopping 310 pages and incorporating the amendments that were agreed in the House of Commons, is available here.

To help you keep on top of all the moving parts, we have updated our Employers’ Handbook to the Employment Rights Bill and Beyond to reflect the latest amendments to the Bill and other developments. Our handbook provides an overview of all the key reforms and what they mean for employers. We will continue to update it on a regular basis as things evolve.

Ethnicity and disability pay gap reporting

Last week, the government launched a consultation into one of its other proposed areas of reform – mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees. Part of the Labour party’s ‘Plan to Make Work Pay’, ethnicity and disability pay gap reporting is not contained in the Employment Rights Bill and instead the government intends to introduce it via separate legislation.

Whilst the reporting framework would be similar to the existing framework in place for gender pay gap reporting, the government acknowledges that there are additional considerations for ethnicity and disability. In the consultation (which closes on 10 June 2025), the government seeks views on several topics including:

• whether employers should have to report on the ethnic breakdown and the breakdown of their workforce by disability status.
• whether a ‘binary’ approach (comparing the pay of disabled and non-disabled employees) should be used for disability pay gap reporting.

The consultation also touches on some of the complexities around classification for ethnicity pay gap reporting, including the privacy concerns that can arise where there are a small number of people in an ethnic group.

Compensation and statutory limits increased

The usual annual increases to compensation and statutory payments will take effect next month. Two key new limits are:

• the limit on a week’s pay for the purpose of calculating statutory redundancy payments and basic awards – £719 (up from £700); and
• the limit on a compensatory award for unfair dismissal – £118,223 (up from £115,115).

The new rates will apply to dismissals that take place on or after 6 April 2025.

Immigration fees increased

Last week, the Home Office announced increased immigration and nationality fees that will apply from 9 April 2025. A wide range of fees are set to increase, with three of the most noteworthy new fees being:

• Fee for a Certificate of Sponsorship under several key routes (including the Skilled Worker route) – £525 (up from £239).
• Worker sponsor licence fee for large sponsors – £1,579 (up from £1,476).
• Fee for Electronic Travel Authorisation (ETA) – £16 (up from £10).