Having proposed to introduce reforms to Employment Law within their first 100 days of taking office, on October 10th (day 98), Labour introduced the highly-anticipated ‘Employment Rights Bill’ to parliament.
Applicable across England, Wales and Scotland (but not Northern Ireland), the bill aims to tackle poor working conditions and promote economic growth, with Labour saying it will benefit both workers and employers.
What does the new Employment Rights Bill cover?
The main areas covered by the Employment Rights Bill include:
Tougher rules on Zero-Hour contracts
Whilst it was widely anticipated that there would be an outright ban on zero-hour contracts, the rules have instead, been significantly tightened.
The Bill will see eligible workers gain the right to a ‘guaranteed hours’ contract, reflecting hours regularly worked over a specified reference period. It should be noted that, while the employer will be required to offer a guaranteed hours contract, the employee does not necessarily need to accept it and can remain on zero hours if they wish.
Workers will also be entitled to reasonable notice of any changes to their working hours, along with compensation if their shift is cancelled or ended early – such as being sent home from a shift working in a pub or restaurant, if it is quiet.
Day-one rights
A number of statutory day-one rights will be introduced, including the right to claim unfair dismissal. Currently, an employee must have 2 years’ service to bring a claim of unfair dismissal. However, it is suggested that dismissals would still be ‘fair’ if carried out during a probationary period, if clear and transparent rules and processes are followed. The government will consult on a statutory probationary period, the government’s preference is 9 months (for new hires). The probationary period will allow for proper assessment and suitability in relation to conduct and performance, but employees will still have their day one rights, for example in relation to redundancy dismissals, meaning they will still be able to claim unfair dismissal. It is anticipated that employers will be able to dismissal for performance and conduct reasons without having to follow the same procedures that apply to longer serving employees.
Protection against dismissal will also be strengthened for pregnant women and those returning from maternity leave, with the government intending to make it unlawful to dismiss them within six-moths of their return, except for in very specific circumstances.
Secondly, flexible working would become a day one right by default, except when it is not reasonably feasible. Details are sketchy, but this could be a significant change from the current position which only provides a right to request flexible working from day one.
Other day-one rights include access to parental leave and bereavement leave.
An update to Trade Union laws
The new Bill introduces the right for trade unions to access workplaces, to allow officials to meet, represent, recruit and organise members, provided they give appropriate notice and comply with reasonable requests from the employer. There will also be an onus on employers to inform all new starters of their right to join a union.
The Bill will also look to ensure better industrial relations between businesses and staff, by looking into areas like negotiations and bargaining. The minimum service level legislation (Strikes (Minimum Service Levels) Act 2023) will also be repealed.
Statutory Sick Pay
Workers will be entitled to receive sick pay from the first day of illness, rather than day four under the current rules. The government will also be removing the lower earnings limit for all workers, although sick pay may be at a lesser rate for lower earners.
Stronger laws on harassment
Whilst not in the Bill itself, a new section of the Equality Act 2010 will come into force on 26th October 2024, introducing the requirement on employers to take ‘all reasonable steps’ to prevent sexual harassment of their employees. Allegations of to sexual harassment will become ‘protected disclosures’ for the purposes of the “whistleblowing protections” of the Employment Rights Act 1996.
Separately, the Bill would make employers liable for permitting a third-party to harass an employee in relation to all protected characteristics.
Strict limitations on ‘Fire and Rehire’
The Bill severely restricts an employers’ rights to sack employees and rehire them on worse terms and conditions. It will also be ‘unfair’ to dismiss an employee for refusing to agree to a change in their contract of employment. The only exception to this will be where a an employer can provide evidence that their business is at risk of complete collapse, making changes to contractual changes to terms necessary for survival.
The ‘Making Work Pay’ consultation
Following the second reading of the Employment Rights Bill on Monday 21st October 2024, the Government has launched four consultations on key areas of the Bill, which are set to run until early December. Those consultations relate to:
These consultations may result in amendments to the Bill as it passes through parliament, and there are likely to be further consultations down the pipeline in terms of implementation. The majority of changes will not take effect until 2026.
How can we help?
As with any proposed changes to the law, it is best to be prepared and start reviewing employment contracts in advance.
If you would like to discuss any of the proposed legislative changes and ensure that your business is prepared, please contact our Head of Employment, Dan Wilde, who will be able to review your existing policies and contracts, and advise on the best route forward.
