On Friday 11 October the Government published its much-anticipated Employment Rights Bill, designed to implement its Plan to Make Work Pay.
Whilst the Bill proposes several significant reforms to employment law there is still no certainty as to when these reforms will be implemented and, following periods of consultation, how much of the initial proposals will be retained. Therefore, whilst employers should be aware of these changes it is important to note that they do not have an immediate effect, and several details may be amended before they are implemented.
Below we provide headlines of the reforms and points for employers to keep an eye on:
Unfair Dismissal
The Government proposes to make unfair dismissal a day-one right, repealing the current two year qualifying period. However, probationary periods will have a more significant role to play in an ‘initial period’ (the length of which is to be decided following consultation, although the Government’s preference is for this period to be 9 months) where an employee may be dismissed for poor performance, misconduct, capability or some other substantial reason. This process to be followed in the initial period is likely to be less stringent than the process employer’s must undertake currently in relation to employees with more than two years’ service. The Government’s Next Steps document suggests a meeting will suffice in relation to the dismissal. At present, it does not appear that this procedure will apply to redundancies in the initial period’. The Government also intends to consult on the level of compensation available to an employee who is unfairly dismissed in the initial period.
The Government has stated that this reform will take effect no sooner than autumn 2026 and this proposal is likely to be heavily consulted on.
Fire and Rehire
The Bill makes it automatically unfair to dismiss an employee for refusing to agree to a change in their contract of employment. A dismissal will also be automatically unfair where an employee who refuses to accept changes to their terms of employment is dismissed and replaced with another employee on new terms to carry out substantially the same role. The exception to this rule is reserved for when a business is in financial difficulty and can demonstrate that a change in contractual terms was not reasonably avoidable.
Zero-hours and ‘low hours’ contracts
Whilst the Bill has not banned zero-hours contracts it does establish new rules which require employers to provide ‘guaranteed hours’ to qualifying workers. Such workers will have a right to be offered guaranteed hours reflecting the hours they regularly work over a reference period (it is suggested that this period will be 12 weeks, but remains a matter for further consultation). This right will also apply to those on ‘low hours’, a concept that is yet to be defined. Workers will be entitled to reasonable notice ahead of any shift changes and compensation where a shift is cancelled, moved or curtailed at short notice. The new rules are complex and much of the detail is left to be developed by secondary legislation following consultation.
Flexible Working
Employers will only be able to refuse flexible working requests where they fall within the current eight statutory grounds for refusal and where it is reasonable to refuse the request. The employer must then give reasons for the refusal and explain why they consider that the refusal is reasonable. The proposed change will make it easier for employees to challenge refusals to their flexible working requests, however the penalty of 8 weeks’ pay remains the same.
This change was stated to be “immediate” within the Government’s accompanying announcement, however there is currently no set implementation date.
Paternity Leave, Parental Leave and Bereavement Leave
The Bill proposes to remove the qualifying period of service required before an employee is eligible for Paternity or Parental Leave resulting in these becoming day-one rights.
New bereavement Leave provisions, for a period of one week and applying to a wider group of people, are intended to take effect. However, the connection between the individual and the deceased will be specified in future regulations.
As with changes to flexible working these changes were expressed as “immediate”, but there is currently no implementation date.
Protections for pregnant employees and new mothers
Currently new mothers returning to work have the right to be offered a suitable available vacancy if their role is made redundant during pregnancy or within 18 months of the birth of their child or adoption placement. The Bill contains a power for the Government to introduce stronger protections against dismissal for pregnant employees and family leave returners, but there is not yet any detail on what these protections might be.
Sexual Harassment
The requirement for employers to take reasonable steps to prevent harassment of their employees is due to come into force on 26 October 2024. This will be amended to require employers to take all reasonable steps to prevent harassment. Regulations may be made to provide detail on what steps would be considered reasonable.
Statutory Sick Pay
SSP will become available from the first sick day rather than the fourth and the lower earnings limit of £123 per week will be removed. The Government will consult on an appropriate level of sick pay for lower earners.
Collective Redundancies
Current collective consultation obligations apply where there are twenty or more proposed redundancies at one establishment (generally considered to be one location) within a ninety day period. The Bill proposes to delete the wording ‘at one establishment’, which will result in collective consultation obligations being triggered where twenty or more redundancies are proposed across an employer’s business.
Equality Action Plans
Yet to be established regulations will require employers with more than 250 employees to develop and publish equality action plans relating to gender equality, the gender pay gap and supporting employees through the menopause.
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 they are provided with their statement of terms of employment.
Public Sector Contracts
The Procurement Act 2023 will be amended to protect workers transferred on outsourcing contracts and to ensure that employees of the contractor are treated no less favourably.
Enforcement
The Bill provides the framework for the Fair Work Agency, a new enforcement body which will have responsibility for enforcing: employment tribunal penalties, minimum wage, statutory sick pay, holiday pay and aspects of the Modern Slavery Act.
Whilst the number of potentially significant changes may be daunting for employers there is, as of yet, no certainty as to when these reforms will be implemented and the potential for extensive consultation means that there may be changes to a majority of the proposed reforms.
As and when further information is available our employment team will be readily prepared to update and assist our clients.
If you would like access to advice or need further guidance, please contact the Employment Team at Blaser Mills Law on +44 (0) 20 3814 2020 or email enquiries@blasermills.co.uk.