Employment Rights Bill - A seismic change to the employment law landscape

Posted Friday 11th October 2024

The much-anticipated Employment Rights Bill has been published (10^th October 2024). The Bill is extensive (over 158 pages) and will affect employers of all sizes. It will overhaul many current employment laws, giving employees enhanced rights.

No date has yet been set for commencement of the Bill…….but reports suggest that most of the planned changes will not take effect before Autumn 2026. The Bill will be subject to consultation in the meantime, so much of the detail may change.

Key changes

28 proposed changes are announced in the Bill. Many of them are very significant. Key changes include:

Day one right to claim unfair dismissal

Employees will have the right to claim unfair dismissal from the first day of employment. The current requirement for two years’ service will be abolished. Employers could still fairly dismiss an employee on performance grounds during an ‘initial period of employment’ (i.e. a form of statutory probationary period).The length of the probationary period will be consulted over, but the Government have proposed a maximum of 9 months (not 6 months, as had been anticipated). Details of how dismissals during the probationary period would work in practice (including any requirements to fairly dismiss) are also to be confirmed. It is as yet unclear as to how much flexibility employers will have to dismiss during the probationary period (and on what grounds). The devil will be in the detail – and that will be consulted over by the Government.

Day one right to statutory sick pay (SSP)

Removing the current waiting period, so that SSP must be paid from day one of sickness (rather than day four); and removing the lower earnings limit so that very low earners qualify for sick pay.

Day one right to paternity and parental leave

Removing the existing requirement for employees to have minimum lengths of service before being entitled to take paternity or parental leave. There is a also a new right to statutory paid bereavement leave.

Flexible working

Employees will have a strengthened right to work on a flexible basis. Employers will still have the ability to refuse a flexible working request on specified statutory grounds, provided it notifies the employee of the grounds for refusal. However, the refusal on those grounds needs to be reasonable, which imposes a greater burden on employers than now and would be far easier for employees to challenge.

Enhanced maternity / pregnancy redundancy protection

Preventing the dismissal of employees returning from maternity leave for six months after their return to work from a period of leave, except in specific circumstances (detail to be confirmed in separate regulations).

Restrictions on ‘fire and rehire’

It will be automatically unfair for an employer to dismiss and offer to re-engage employees on new terms of employment, unless it can show that is necessary to eliminate or prevent financial difficulties and could not be avoided.

Restrictions on ‘zero hours’ contracts

Employers will be required to offer workers a guaranteed-hours contract based on the hours they have clocked up during a ‘reference period’. The length of that period is unclear (but the Government previously referred to a 12-week period). Workers on zero-hours contracts will also be entitled to reasonable notice ahead of any changes being made to their shifts, as well as compensation if a shift is cancelled or ended early. Significantly, there is no ‘ban’ on zero hours contracts (as many media commentators predicted) – Workers who want to remain on such contracts are able to do so.

Sexual harassment

Employers will be required to take ‘all reasonable steps’ to prevent sexual harassment, rather than ‘reasonable steps’ as currently provided. The Bill also introduces additional protection from third party harassment. Any employee disclosures about sexual harassment are to be designated as whistleblowing ‘protected disclosures’. Non-disclosure agreements in settlement agreements will therefore not cover those disclosures.

New state enforcement body (“Fair Work Agency”)

Establishing a new state enforcement agency called the Fair Work Agency. That new body will consolidate existing enforcement functions (currently provided by the Gangmasters and Labour Abuse Authority, HMRC’s National Minimum Wage enforcement unit and the Employment Agency Standards Inspectorate) and is likely to have powers to enforce particular employment-related rights, including holiday pay, agency worker rules and offences under the Modern Slavery Act 2015.

Trade Unions

Introducing complex (and lengthy!!) provisions giving additional protections for trade union members and measures to simplify the statutory recognition process. It also introduces new and enhanced rights of access for union officials to meet, represent, recruit and organise members in the workplace. The bar for trade union recognition has been lowered (with changes in balloting rules). Employers must provide workers with a written statement of their trade union rights with their statement of employment particulars.

Collective redundancy consultation

Changing the law so that collective consultation requirements will be triggered if redundancies reach a defined threshold across the business as a whole – rather than just numbers within each site/workplace (which can sometimes be the case).

Sex, Ethnicity & Disability pay gap reporting

Larger employers (likely those with 250+ employees) will need to publish Action Plans to close the sex-based equal pay gaps. Those companies will also need to publish ethnicity and disability pay gap reporting figures.

Key conclusions

The Employment Rights Bill represents the biggest change to employment laws that this country has seen in a generation. Giving day one rights to claim for unfair dismissal (subject to statutory probationary periods), is likely to have the most significant and immediate impact on all employers, regardless of size. The Government have estimated that the change will give 9 million more employees unfair dismissal rights.

This is only the start of the Bill’s journey through Parliament though. We anticipate (and hope) that the Government will take sufficient time (likely in 2025) to consult about the reforms. As a result, the Bill could see some significant change, before it is implemented. Employers will have time to plan ahead for most of the changes.

However, the direction of travel is clear – Within the next two years, we will see new workplace changes that enhance employee rights and arguably reduce flexibility for employers.

It will not be the only legislative journey employers will need to watch closely. Alongside the Bill, the Government have also published a document entitled  Next Steps to Make Work Pay – GOV.UK (www.gov.uk), which refers to other longer term planned employment law changes that are not covered in the Bill. They include plans to move towards a single status of ‘worker’ and the much-hyped ‘right to switch off’. We will report back on those proposed changes if or when they happen.

The Joelson LLP employment team advise companies of all sizes on workplace matters. If you have any questions or require advice on any employment law matter, please contact a member of our team.

---

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

---

Share this article