Employment Rights Bill – latest details and timings
The Employment Rights Bill, once implemented, represents the potential biggest change in employment rights for a generation.
The bill, supports the government’s mission to increase productivity and aims to create the right conditions for long-term sustainable, inclusive, and secure economic growth.
It hopes to provide a baseline of security for workers to, in turn, help raise living standards across the country and provide better support for those businesses who are engaged in good practices.
Harriet Gardner, solicitor in the employment team at Wake Smith, looks at some of the issues being addressed.
This article covers:
- What stage is the Employment Rights Bill at?
- How many employment law reforms are proposed?
- What are some of the biggest proposed changes?
Unfair dismissal
Fire and re-hire
Collective redundancies
Harassment
Zero hours and guaranteed hours
Flexible working
Other reforms
A New Fair Work Agency
Additional measures
- Your next move?
What stage is the Employment Rights Bill at?
The 158-page draft bill was introduced into Parliament on 10 October 2024. It is now making its way through the various stages of Parliament, which may well lead to various changes to the current draft being made.
Any changes are not expected to come into force until 2026, but, nothing is confirmed.
At the second reading in the House of Commons, on 21 October, the bill was debated and secured a majority of “ayes”. The bill has now been sent to a Public Bill Committee, where it will be examined in detail. The Committee are expected to report to the House by 21 January 2025.
The Deputy Prime Minister, Work and Pensions Secretary and the Secretary of State for Business and Trade launched four six-week consultations. Following which, further changes may be made to the Employment Rights Bill. The four consultations are:
- The application of zero hours contracts measures to agency workers.
- Creating a modern framework for industrial relations.
- Strengthening remedies against abuse of rules on collective redundancy and fire and rehire.
- Strengthening Statutory Sick Pay.
As with employment legislation, further detail on many of the policies in the bill will be provided through regulations, and in some cases codes of practice, after Royal Assent. The Government expects to begin consulting on these reforms in 2025, seeking significant input from all stakeholders, and anticipate the majority of reforms will take effect no earlier than 2026. Reforms of unfair dismissal will take effect no sooner than 2026.
How many employment law reforms are proposed?
28 employment law reforms are proposed.
What are some of the biggest proposed changes?
Unfair dismissal
Unfair dismissal will become a day-one right, subject to a new statutory probationary period, and the two-year qualifying period in section 108 of the Employment Rights Act 1996 (ERA 1996), which will be repealed.
At present, probationary periods do not have any legal status and are purely a contractual provision. One of the key changes is that the bill would and introduces the concept of an ‘initial period of employment’ during which an employee could be dismissed more easily after following a lighter touch process. It has been suggested in the Next Steps to Make Work Pay that this may include holding a meeting with the employee to explain the concerns about their performance. It is likely that, even with a light touch process, there will still be some level of analysing the reason for dismissal, following some form of process and obtaining evidence. The exact nature of each is yet to be determined.
The current suggestion is that the probationary period would apply to dismissals relating to capability, conduct and some other substantial reason. At this stage, it seems that the proposed probationary period would not apply to dismissals relating to redundancy.
The Government’s preference is a nine-month probationary period, however, this could change!
Fire and re-hire
Proposals are aimed at combatting the firing and rehiring of employees who refuse to accept a change to the terms and conditions of their employment (following on from the P&O Ferries dismissals in 2022). The provisions, at present would not implement an outright ban, but, it would be extremely hard for employers to dismiss, and re-engage an employee (or even make the threat), as a way of introducing a variation to the contract. The proposed changes are to be done through a new category of automatically unfair dismissal that would, in its current form, be a major change in the law.
The bill provides that a dismissal will be unfair if the reason (or principal reason) was that the employer sought, and the employee refused, a variation to the contract of employment. More significantly, a dismissal will also be unfair, if the employer replaces the employee with another person carrying out substantially the same duties, who is willing to accept the varied terms.
An employer would be able to escape a finding of unfair dismissal in very narrow circumstances. It would need to show that the reason for the variation was to eliminate, prevent, significantly reduce or mitigate ‘financial difficulties, which at the time of dismissal were affecting, or were likely in the immediate future to affect the employer’s ability to carry on the business as a going concern or otherwise carry on the activities constituting the business’, and in all the circumstances the employer could not reasonably have avoided the need to make the variation.
If those hurdles are overcome, whether the dismissal was fair or unfair would be determined according to a number of prescribed factors and any regulations made by the Secretary of State.
Collective redundancies
Currently the duty to collective consult, and notify the Secretary of State, applies if an employer proposes to make 20 or more employees redundant, at a “single” establishment, within a 90 day period or less.
Case law sets out different scenarios which are considered to be “establishments”, an example being that different stores within a retail chain would be considered to be their own establishment.
However, the bill proposes to remove the reference to a “single establishment”. This means that employers with different premises would need to give consideration to the fact that, if they are proposing 20 or more redundancies over multiple sites, they might trigger the duty to collectively consult.
Harassment
As of 26 October 2024, employers are required to take “reasonable steps” to prevent sexual harassment of their employees.
The bill proposes to go even further by:
- Extending the duty to employers being required to take “all reasonable steps” to prevent sexual harassment;
- Requiring employers to take all reasonable steps to prevent staff from being harassed (note the legal definition) by third parties; and
- Making disclosures that relate to sexual harassment protected disclosures (and, therefore, would benefit from whistleblowing protections).
Zero hours and guaranteed hours
One of the flagship policies of the Bill is the government’s stated aim to end ‘exploitative zero hours contracts’.
The proposals within the bill include:
- Right to a guaranteed hours contract that reflects the hours eligible workers regularly work over a reference period (12 weeks has been originally floated but the details areyet to be confirmed ).
- Right to reasonably notice for a shift and the cancellation of a shift
- Right to compensation if a shift is cancelled, ended early or moved at short notice (the amount of notice is yet to be confirmed).
It is likely that employers will need to make fresh offers for the guaranteed hours contract every reference period. Employers ought to start considering how they will monitor such changes administratively.
Flexible working
The bill proposes an amendment to legislation which would mean that flexible working would become the default position (where practicable). Employers will still be able to refuse a request for flexible working for one of the statutory reasons for refusal. However, the bill also introducing a new requirement that refusing a request but also be “reasonable”.
Draft regulations are needed to set out what steps need to be taken before refusing a request.
The prescribed reasons for refusing a flexible working request are:
- Burden of additional costs
- Inability to reorganize work among existing staff
- Inability to recruit additional staff
- Detrimental impact on quality
- Detrimental impact on performance
- Detrimental effect on ability to meet customer demand
- Insufficient work for the periods the employee proposes to work
- Planned structural changes to the business
Other reforms
- Bereavement leave - The Bill outlines a new statutory Bereavement Leave scheme. At present, the right to bereavement leave is limited to parents who have lost a child (noting also the current right to compassionate leave in some circumstances).
- Unpaid parental leave – To be available from day 1 of employment.
- Paternity leave – To be available from day 1 of employment.
- Statutory Sick Pay – To be available from day 1 of employment (removing the need for “waiting days”). Further, the Lower Earnings Limit is to be removed, meaning that employees with lower earnings would qualify for SSP.
A New Fair Work Agency
A new Fair Work Agency will be established to deal with enforcement of statutory employment law rights including NMW, holiday pay, SSP and some aspects of the Modern Slavery Act.
The Bill includes various investigative and enforcement powers including being able to enter premises, obtain documents and compel answers to questions.
Your next move?
There is much to consider and, naturally, most businesses will need to consider and reflect on the proposals. It is difficult to assess the full breadth of the changes until further information is released (detail on many of the policies in the bill will be provided through regulations, and in some cases codes of practice).
We will continue to provide legal updates in writing, and will release further details for a webinar, in due course.
To sign up to our mailing list to receive Employment Law updates and invites to future events or webinars,
For more information call Harriet Gardner at Wake Smith Solicitors on 0114 223 2726 or email [email protected]
Published 25/10/2024
About the author
Solicitor in Employment Law and HR Services
