The Government’s new Employment Rights Bill
Further to our article on 18th July 2024 on 10th October 2024 the Government unveiled the details of the new proposed Employment Rights Bill ( ‘the Bill’), a full copy of which can be read here.
Once passed through Parliament, this will be recognised as the biggest update to Employment Rights in decades as the Bill proposes to introduce key reforms focusing on enhancing employment rights. We summarise the key proposals below.
Protection from Day One
The Bill gives employees the right not to be unfairly dismissed from day one of their employment (as opposed to the current rule which is after 2 years’ continuous service unless related to discrimination or whistleblowing). The ‘day one’ right in the Bill will mean that approximately 9 million previously unprotected employees with under 2 years of service will now be protected.
The Government is considering a statutory probationary period of up to nine months (although this is to be confirmed) and will consult on how dismissals during such probationary period will be dealt with.
Employees will also be entitled to bereavement, paternity and unpaid parental leave from day one.
Zero-hour Contracts
Around one million people are on zero-hour contracts, representing 3% of all people in employment in the UK. The sectors which rely most heavily on zero-hour contracts are hospitality, retail and health and social care.
The Bill bans exploitative zero-hour contracts by making it a right for those on zero or low hour contracts to have guaranteed hours if they work regular hours over a defined period. The Bill also gives workers the right to reasonable notice of a shift, shift cancellation or change of shift at short notice.
This will give workers security of earnings whilst allowing people to remain on a zero-hour contract if they prefer to. This is therefore likely a welcomed change for most.
Flexible working
Flexible working arrangements will become the default option where practical, unless the employer can demonstrate that such an arrangement is unreasonable.
The Bill sets out some grounds where employers may refuse a flexible working request, for example, if it has a detrimental impact on quality or performance, or on the business’ ability to meet customer demand. If a flexible working request is refused, the employer is required to explain why in writing to the employee. The changes do not therefore appear significant, relating mainly to an employer needing to provide clearer reasons for refusing a request.
Collective redundancy consultation
Currently, employers must consult when they propose 20 or more redundancies within 90 days at one establishment/ location, rather than across the whole business.
The Bill changes this so that employers must consult when there are 20 or more proposed redundancies across the whole business not merely one establishment, removing some uncertainty from this area of law. This will increase the situations in which collective consultation will be required, thus providing individuals with further protection. The Bill also proposes higher penalties for failing to follow these rules.
‘Fire and rehire’ practices
Firing an employee and then rehiring them on less advantageous terms will be prohibited. The Government will close the loopholes that currently allow this to ensure greater job security for all.
It will be automatically unfair to dismiss an employee for refusing to vary their contract. The Bill provides very limited exceptions where this is acceptable, such as when there is a genuine business need for the variation (such as to mitigate the effect of any serious financial difficulties). In such circumstances it is necessary for the company to have sufficiently consulted about the variation in the first instance but looks like it may be a very difficult defence to run.
Statutory Sick Pay
The lower earnings limit for sick pay (currently £123 per week) and the three-day waiting period before sick pay can be paid will be removed, allowing employees to receive sick pay from day one.
Pregnant women and new mothers returning to work
The Bill makes provisions for the Government to be able to make regulations about dismissals during or after the ‘protected period’ of pregnancy. Similar provisions may be made during the protected period relating to adoption and shared parental leave. Unfortunately, all of the detail around the provisions is awaited! The Government’s plan referred to making it “unlawful to dismiss a woman who has had a baby for six months after her return to work, except in specific circumstances”.
Third party harassment
The Bill will reintroduce employer liability for third party harassment in relation to all relevant protected characteristics. Under the Bill, an employer will be considered to permit a third party to harass their employees if the third party harasses an employee during that employee’s employment and the employer fails to take all reasonable steps to prevent it happening.
Interestingly, the Bill will also expand the duty on an employer to prevent sexual harassment of its employees which came into force on 26 October 2024, by requiring them to take “all reasonable steps” (as opposed to just “reasonable steps”). We await regulations which may specify steps that are to be regarded as “reasonable”, which are currently set out in guidance from the Equality and Human Rights Commission. In any event it will be very important for employers to have policies, clear processes for handling and reporting complaints and carry out risk assessments.
Fair Work Agency
A new enforcement body, bringing together existing state enforcement functions, will be established to monitor compliance and penalise businesses that fail to uphold employment rights. The Agency will also “support employers looking for guidance on how to comply with the law”.
The Government’s Next Steps
This Bill has been welcomed by trade unions, who view it as a necessary step towards ending low pay and exploitative practices. However, some business groups have criticised the Bill for being potentially burdensome for smaller employers. Despite these concerns, the Government is positioning this legislation as essential for improving productivity and working conditions in the UK economy.
The Government has already launched several consultations which will run until early December 2024 which seek views on the following:
- Right to guaranteed hours contract for zero or low hours workers
- Collective redundancy and ‘fire and rehire’ practices
- Trade union legislation
- Statutory sick pay
Responses to the above consultations may result in amendments being made to the Bill.
The Government have promised to ensure businesses have time to prepare for the implementation of the reforms and expect that most will take effect no earlier than 2026.
Helping you
If you would like more information on the proposed changes above or are seeking advice on how these intended reforms may impact you or your business, feel free to get in touch by contacting a member of the team or by emailing lauren.sexton@joneschase.com.
Jones Chase is a specialist employment law firm based in the centre of London with an excellent track record of looking after those that we assist.
Do contact us should you require further information or need any assistance. We are always happy to speak to people and point them in the right direction.