10/10/2024
We have been eagerly awaiting the publication of the Employment Rights Bill ever since Labour won the General Election back in July 2024. Whilst we have had some indication as to what the Bill will contain, there has been a lot of uncertainty and speculation.
So, what’s in the Bill? Here is a whistle-stop tour of some of the key points
- Day one rights - The two year qualifying period for unfair dismissal will be removed, and it will only apply to those that have already started work. There are also day one rights for paternity leave, bereavement leave (and this will not be limited to parental bereavement) and unpaid parental leave.
- Enforcement – There is to be an enforcement body called the Fair Work Agency, which will enforce rights such as holiday pay, minimum wage and sick pay.
- Equality - Pregnant women, new mothers and those returning from statutory family leave will see increased protections from dismissal. There will also be the ability to take paternity leave following shared parental leave. Protections against sexual harassment will be increased, and employers will need to take “all” reasonable steps to prevent sexual harassment in the workplace. In addition, the Bill states that an employer must not permit third party harassment, which expands the wording of the Worker Protection (Amendment of Equality Act 2010) Act 2023. There are also provisions for gender and equality action plans for larger employers, which will also include support for employees going through the menopause.
- Fire and rehire – These practices will be banned, with some limited exceptions. Automatic unfair dismissal will be available for employees refusing to agree to contract variations.
- Flexible working – This will be the default “where practical”. Flexible working requests can be refused so long as the refusal is reasonable satisfies one of the prescribed grounds.
- Pay – Workers will be entitled to sick pay from the first day of illness (the initial waiting period will be removed). The Low Pay Commission now takes into account the cost of living when setting minimum wage levels, but the Bill will also remove the age bands that dictate minimum wage levels for younger people, meaning that everyone is entitled to the same minimum wage. Pay and conditions will also be improved through a Fair Pay Agreement in the adult social care sector.
- Probation – 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, but employees will still have their day one rights, meaning they will still be able to claim unfair dismissal. However, a fair dismissal will still be possible and the government has said that there will be a “lighter touch” process during the probationary period. The government has said that it will “consult extensively”, including how the process will interact with the Acas Code of Practice.
- Redundancy – Collective redundancy provisions will be updated and the trigger for collective consultation (20 or more dismissals) will now apply across the whole business – not just in one establishment. The government also propose to consult on the lifting of the protective award cap where the employer fails to properly collectively consult.
- Trade Union – There will be extended provisions for trade unions to organise, represent and negotiate on behalf of their workers, including specific rights for equality representatives. Employers will also be required to give workers a written statement notifying them of the right to join a trade union. The Bill also specifies workplace access rights via access agreements. The minimum service level legislation (Strikes (Minimum Service Levels) Act 2023) will be repealed and there are additional powers relating to blacklisting.
- Whistleblowing – Allegations of sexual harassment will be classed as qualifying protected disclosures.
- Zero-hours contracts – Exploitative zero hours contracts will be banned and qualifying workers will have the ability to move to guaranteed hours contracts. However, those who are offered guaranteed hours do not have to accept, and can remain on zero hours contracts if they wish. There are also provisions for shifts and compensation payments for cancelled shifts.
The above does not cover all of the promises highlighted in Labour’s “new deal for working people”, there are further developments planned, with additional proposals, such as:
- Guidance regarding the right to switch off.
- Further legislation (the Equality (Race and Disability) Bill), which will address pay issues, seeing larger employers reporting on ethnicity and disability pay gaps. The legislation will also extend equal pay rights on the basis of race or disability, and ensure that outsourcing services are not used as a way to avoid equal pay.
- Single worker status has also been promised, and a consultation on a simpler framework will be actioned.
- The parental and carers leave system will be reviewed.
- TUPE is also going to be looked at, including the current application of the regulations and practices.
- The Freedom of Information Act will be extended to private companies that hold public contracts and also to publicly funded employers.
What next?
The Bill will undergo a second reading in the House of Commons on 21 October 2024.
The government expects to start consulting on the reforms in 2025, meaning that the majority of changes will not take effect until 2026, with unfair dismissal no sooner than autumn 2026. The government has said that it understands that adjusting to these new reforms will take time and is committed to ensuring that all stakeholders receive appropriate time to prepare for these changes ahead of their commencement.
Further information
We will be providing further updates in future Spotlights, and Tuesday’s edition will dig a little deeper into some of the proposals mentioned above. We will also be discussing the Bill in detail in this month’s edition of Employment Eye. If you haven’t already signed up Employment Eye, please do so by clicking here.
In the meantime, if you or your business requires any assistance. Please contact a member of the Employment, Pensions & Immigration department who will be happy to help.