The government’s long-heralded Employment Rights Bill, trailed as the biggest shake-up in employment law for a generation, has now been published and can be found here. Whilst some of the details of the changes will be set out in secondary legislation informed by ongoing consultation, here’s what the Bill includes:
Bereavement Leave
This will now be available from day one of employment. The parental bereavement leave provisions in the ERA 1996 will be replaced with wider bereavement leave provisions, applying to the loss of a wider group of persons, to be specified in future regulations
Equality Action Plans
Future regulations will require employers with 250 employees or more to develop and publish equality action plans relating to gender equality, addressing the gender pay gap and dealing with supporting employees through the menopause.
‘Fire and rehire’
Firing and rehiring employees on lower pay / lesser terms will be automatically unfair, save where the employer can show evidence of financial difficulties and demonstrate that the need to make the change in contractual terms was not reasonably avoidable.
Flexible Working
Employers will only be able to refuse a request for flexible working where it is reasonable to do so.
Parental Leave
Unpaid parental leave will now be available from day one of employment (currently one year’s continuous service is required).
Paternity Leave
This will now be available from day one of employment.
Redundancies
The collective redundancy threshold will apply across a business rather than at one establishment.
Sexual Harassment
The new requirement on employers to take reasonable steps to prevent sexual harassment of their employees, which is due to come into force on 26 October 2024, will be amended to require employers to take "all reasonable steps". Regulations may specify what are to be regarded as reasonable steps. The steps that may be specified include:
- Carrying out assessments of a specified description.
- Publishing plans or policies of a specified description
- Steps relating to the reporting of sexual harassment.
- Steps relating to the handling of complaints.
Disclosures relating to sexual harassment will become protected disclosures.
Statutory Sick Pay
This will apply from the first day of illness, removing the existing requirement for ‘waiting days’.
Statutory sick pay is currently paid to those earning an average of at least £123 a week (the lower earnings limit). The requirement to earn at least the lower earnings limit will be removed.
Third-party Harassment
Employer liability for third-party harassment in relation to all relevant protected characteristics will be introduced.
Tips
New rules will apply to written policies about the allocation of tips, requiring consultation with a recognised union or affected workers. Policies must also be reviewed every three years.
Trade Unions
Employers will be required to give workers a written statement advising that they have the right to join a trade union at the same time as providing the employment contract basic statement of terms.
Unfair Dismissal
At present, with some limited exceptions, employees need two years of continuous service to be eligible to claim unfair dismissal. This requirement is being swept away and employees will have the right from day one of employment to claim unfair dismissal.
This is tempered by the creation of a new "statutory probation period", during which time it will be easier for employers to dismiss someone "fairly" than it would be after the probation period expires. This will apply to dismissals for conduct, capability, illegality or ‘some other substantial reason’ but not redundancy. The government says “This will allow for a proper assessment of an employee’s suitability to a role as well as reassuring employees that they have rights from day one, enabling businesses to take chances on hires while giving more people confidence to re-enter the job market or change careers, improving their living standards”. We don’t yet know the full details of how long the probationary period will be (likely between six and twelve months, with the government reportedly favouring nine months as a potential compromise) or how exactly the right to claim unfair dismissal will be qualified during this period; consultation will take place on this and we can expect further detail in secondary legislation in due course.
Zero Hours and ‘Low Hours’ Contracts
Eligible employees must be offered a regular contract of employment that reflects the hours they regularly work once they establish a pattern of regular working over a reference period. Workers may choose to refuse if they wish.
Enforcement
An enforcement body called the Fair Work Agency will be set up, which will be responsible for enforcing various rights such as holiday pay, the minimum wage and SSP.
When will these changes happen?
Further detail on many of the policies contained in the Bill will be provided through regulations and in some cases codes of practice. The government anticipates that the majority of reforms will take effect no earlier than 2026. The unfair dismissal reforms will take effect no sooner than autumn 2026. Until then, the current unfair dismissal qualifying period will continue to apply.
Next Steps
This legislation has only just been introduced to Parliament and may be subject to amendment before it becomes an Act. Given the government’s majority though and how central this legislation is to Labour’s manifesto, we are not anticipating significant changes.
The Bill will lead to several consultations which will address reforms contained in the Bill, including:
Flexible working - there will be a consultation to develop the detail of the approach to be taken.
Unfair dismissal - there will be a consultation on the length of the initial statutory probation period, as well as consultation on the required process to fairly dismiss during the probationary period (which the government has suggested should consist of holding a meeting with the employee to explain the concerns about their performance, at which the employee could choose to be accompanied by a trade union representative or a colleague). Consultation is also likely to cover compensatory awards, which may be limited.
Zero hours and "low hours" contracts - there will be a consultation on what should constitute "low hours" and to ensure the Bill's provisions on zero hours contracts are effectively applied to agency workers.
What’s missing?
Not all of the changes Labour promised are contained in the new bill. Key omissions (for now) include:
- measures to make it easier to ensure equal pay between in-house and "contracted out" staff who do similar jobs in public services
- abolishing the distinction between ‘worker’ and ‘employee’ status
- a new right to ‘switch off’ from work communications at the end of the working day
- legislation to end pay discrimination e.g. around ethnicity and disability
These may - or may not - form the basis of future legislation. Watch this space!
How can Tozers help?
When new legislation is issued it is vital to keep on top of changes to ensure that you are adhering to the legislative changes or are putting plans in place inline with future deadlines. For support, get in touch with our employment team today.
