The long-waited Employment Rights Bill has finally been unveiled by the Labour government.
What is an employment bill?
A bill is a proposal for the government to draft new or manage changes to employment legislation. A big isn’t law, or become an Act or regulations, until it is approved by the Houses of Parliament and then is given the Royal Assent to become law.
The ‘Employment Rights Bill’ process
Labour introduced this legislation along with other sets of employment legislation to reform the employment law landscape, within 100 days of being elected, under the plan ‘Make Work Pay’. Essentially, the Bill will update and modernise the legislative framework in relation to employee rights.
They introduced the bill within 98 days of being elected, which has meant that compromises have had to be made with the announcement that consultation could result in further changes. Rushing the bill through has meant that some of the original proposals didn’t make the Bill, while others need to go through consultation and regulations and advisory that some reforms may not take affect until 2026 (including the right to claim unfair dismissal from day one).
Labour has published a ‘next steps’ document, which outlines details of the bill and what it will seek to implement.
Here’s what we know about the proposals ……
Day one unfair dismissal rights
In recent years, the right to claim unfair dismissal has been restricted to employees having 2 years’ service. Employees will have a new right to make a claim for unfair dismissal form day one of employment.
There will, be a ‘light touch’ procedure to manage employees during an ‘initial period’, where employees are not quite hitting the mark with their performance, conduct, capability (or some other substantial reason). The bill is yet to define what a ‘light touch’ procedure is. Although the Next Steps document has advised that it’s as simple as holding a meeting with the employee. The duration of the ‘initial period’ has also yet to be defined. The initial period is likely to be the ‘probationary period’ and may be up to 9 months. There is also a notice period, of up to 3 months.
The changes won’t take effect until 2026. Further consultation on this is expected between now and then.
Employers are recommended to look at tightening up on then ‘Probation Policy’ to ensure there is adequate processes to review an individual’s performance in the role.
Preventing from sexual harassment at work
The Bill places a duty of the employer to ensure that take ‘all reasonable steps’ to prevent sexual harassment in the workplace. The ‘all reasonable steps’ will be set out in the regulations, when we get closer to the 26th October 2024 (effective date).
Employers will be required to:
- Demonstrate that leadership down are living the values and behaviours of respect, dignity and inclusion
- Apply measures in place to prevent ‘sexual harassment’ for their employees
- Demonstrate they have effective systems and monitoring in place as of 26th October 2024 (i.e. HR policies and procedures)
- Train people managers within one month of the legislation being in force and support provided
- Carry out risk assessments on the organisation
- Update policies, procedures and staff handbook updated (ensuring routes of reporting and investigation procedures are clear, plus monitoring and review)
- Communicate and raise awareness, ensuring that all staff are made aware
- Keep detailed records for up to 3 years, and be readily available upon staff requests
The bill would mean the employer would be liable for a third party should they harass and employee. The employer would also need to demonstrate they steps that they have taken to prevent the harassment.
The Equality and Human Rights Commission presently covers third party harassment but this will mean the employee can bring a claim against the employee for this harassment.
Read more here.
Collective rights
Essentially, the bill will make it easier for the Trade Unions to be able to access the work environment with statutory recognition.
Employers will now have to inform their workforce that they have the right to join a trade union.
Collective redundancy consultation
The law on consulting on redundancies is changing. Employers have a duty to consult for 90 days when they are making redundancies at ‘one establishment’ when 20 or more employees are being affected.
The bill will remove the ‘one establishment’ meaning and consultation will have to take place across the whole organisation.
Fire and rehire
The bill will make it unfair for dismissing an employee if they refuse to agree any changes to their terms and conditions and then to replace them with a different employee on varied terms to carry out the same role.
However, there will be allowances for organisations that are in financial difficulties.
No outright ban on zero-hours contracts
It was originally proposed that there would be an outright ban on zero-hours contracts. However, this is now not the case.
However, there will be rules on employers guaranteeing specific hours for workers.
At present we don’t know what this will look like should an employee refuse to accept the guaranteed hours i.e.. a part-time contract. But we do know that there will be a requirement for an employer to re-offer after the end for the reference period (not defined yet but could be 12 weeks).
Employees can ignore the offer or reject it. But the offer needs to be made, and the employer would need proof of this offer.
We do not know yet, how seasonable work will be affected by this.
The full details of these proposals will come out in the regulations when published.
Reasonable notice of a shift
The bill will also introduce the right for employees to have a reasonable amount of notice from their employer for the hours the employer wishes for them to work (i.e. times, days); as well as a reasonable amount of notice for changing the shift.
This will be applicable for anyone who does not have a regular working pattern.
Flexible working
In April 2024, we have already seen changes to flexible working, which has given employees the right the right to request flexible working from day one, to make up to two requests per year, as well as the removal of the need to demonstrate a strong business case when employees are making a flexible working request. Read more here.
The bill will require any rejection by the employer of a flexible working must be on ‘reasonable grounds’. There are currently 8 reasons for rejecting a request and there will be a ‘reasonableness test’, which will make it easier for employees to challenge (at appeal or employment tribunal) why the employer has rejected the flexible working request.
Gender pay gap reporting
The bill will require employers with over 250 employees to report on the providers/employers of contract workers, so that they can identify if any pay gaps has been lowered by using contract workers.
Employers will also need to publish any action plans to close the gender pay gap.
Day one rights to take family leave
Presently to take parental leave, you need to have at least one year’s service. To take paternity leave the employee must have been continuously employed by the same employer for at least 26 weeks.
The bill will remove these continuous service requirements.
Stronger protection for pregnant workers and people with families
Stronger protection for pregnant workers and people on family leave is planned, so that they are protected from dismissal, however, we are waiting for more details on this.
Equal Pay
The right for workers to have equal pay for equal work is planned to be extended to cover race and disability.
Statutory sick pay from day one of sickness
Statutory sick pay (SSP) can be claimed by the employee from day four of sickness and they need to be earning over £123/week.
The bill will remove this waiting period so employees can claim SSP from day one and they will also remove the lower earnings limit of £123/week.
We may see these reforms quite quickly.
The Fair Work Agency
With this bill, the government plan to have a central agency to enforce the changes. Within the agency, will be the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and HMRC’s National Minimum Wage Enforcement Team.
Many of the reforms of the bill are not happening just yet ……
Detailed consultations of the proposals of the bill will commence in 2025 and then the reforms of the legislation won’t happen until 2026.
There was talk on reforms for ‘single worker status’ (removing the distinction between a worker and an employee) and the ‘right to disconnect’ from work, but this is not in the bill. This may be something that is looked at, at a later date.
With ‘the right to disconnect from work’ not making it into the bill, there are plans to develop a Code of Practice to help employers to guide employees on getting a good work-life balance.
Conclusion
In order for the government to meet its deadline of 100 days, it seems that much detail has been missed and decisions on what is included has been rushed. However, the bill seems to provide a good balance between the employer and employee rights and requirements.
What is clear is that the proposals are very favourable to flexible working and ways the employer can support the modern family.
The main changes for the employees are:
Day one rights for sick pay, parental, paternity and bereavement leave; the right to guaranteed hours and flexible working.
The main changes for the employer are:
Unfair dismissal rights; sexual harassment, collective redundancies, flexible working, fire and re-hire and collective rights.
What can employers do now?
The only thing that employers can do is start to concentrate on developing a good probation policy, and train managers to get used to carrying out probation reviews, record keeping and having constructive conversations with new employees.
What happens next?
The bill will go through Parliament and will be subject to various amendments. Once the bill has been finalised and agreed, the consultation documents will be published for reviewing.