Delivering on their promise to bring forward legislation within 100 days of coming to office, Labour published the Employment Rights Bill on 10 October 2024. The Bill is split into six parts:-
- Part 1: Employment Rights
- Part 2: Other Matters Relating to Employment
- Part 3: Pay and Conditions in Particular Sectors
- Part 4: Trade Unions and Industrial Action, Etc.
- Part 5: Enforcement of Labour Market Legislation
- Part 6: General.
The main highlights of the Bill are discussed below.
Unfair Dismissal and Probationary Period
The Bill removes the existing two-year qualifying period for an employee to bring an unfair dismissal claim against their employer, and all employees will have a day-one right to protection from unfair dismissal. This means that an employer must have a fair reason, follow a fair procedure, and act reasonably in dismissing any employee, regardless of the employee’s length of service.
In attempting to strike a balance, the Bill creates a new statutory probation period for new hires, to allow the employer to assess an employee’s performance and suitability in the role. It is envisioned that this will make it easier for employers to dismiss employees fairly during this period subject to some sort of prescribed process, the details of which remain to be seen. That said, this will not affect the employee’s right to claim for unfair dismissal during the probationary period, or to enforce any other statutory rights. The length of the probationary period will be subject to consultation, although, it is likely to be between 6 to 12 months, with the Government currently favouring 9 months.
Fire and Rehire
The Bill also seeks to end unscrupulous fire and rehire practices which leave employees with less favourable terms and conditions in their employment contracts. The Bill provides that if an employer has sought to vary the employee’s contract and the employee who does not agree to the variation is subsequently dismissed, this is automatically an unfair dismissal. The Bill creates an exception where the variation mitigates against financial difficulties that are likely to affect or are affecting the employer’s ability to carry on the business, and the variation is unavoidable. This builds on the further regulation and guidance in this area, introduced by the previous government.
The Bill also seeks to strengthen protections against dismissal for pregnant employees, and those returning from maternity leave, including protection against dismissal while pregnant, on maternity leave and within six months of returning to work.
Zero Hour Contracts
In seeking to end “exploitative” zero-hour contracts, the Bill will give a zero-hour worker the right to have a guaranteed hours contract if they work regular hours during a defined period of time. Workers who are contracted to work low hours, and exceed those hours during the defined period, will also have the right to an amended guaranteed hours contract. Labour has initially proposed a period of 12 weeks.
It will be possible for a worker to remain on a zero-hour / low hour contract should they request to do so, however, the employer is required to offer the guaranteed hours. The guaranteed hours cannot be for a limited term unless it is reasonable. For example, if guaranteed hours are only required to perform a specific task and the employment contract is to be terminated on completion of the task.
Reasonable Notice of Shifts
The Bill provides that an employer must give workers who are on zero-hour contracts, or irregular working hours / patterns, reasonable notice of a shift, cancellation of a shift or change to a shift.
Every time the employer cancels, moves, or curtails a shift at short notice, the employer will be required to pay to the worker “a specified amount”, subject to exceptions laid out in the Bill. The time amounting to short notice, and the “specified amount” payable is not defined and will be left to regulations.
Flexible Working
Flexible working will now become the default position, and employers will be expected to consider any flexible working application from day-one of employment.
The employer can, however, refuse a flexible working application based on any of the grounds listed in the Bill and showing that it is reasonable to refuse on that / those ground(s). This measure has been introduced to increase compatibility between the workplace and employees’ lives and will only be the default position where practical.
Tips and Gratuities
The Bill builds on the duties conferred onto employers from the Employment (Allocation of Tips) Act 2023 which relates to the fair allocation of tips, gratuities and service charges paid by customers to workers. It provides that prior to producing a written policy relating to the allocation, the employer must consult with an independent trade union representative or worker representatives (or where this is not possible, workers who are likely to be affected by the policy). The employer must also consult with the representatives and review the policy at least every three years, making the views expressed in the consultation available to all workers of the employer.
Protection from Harassment
The Worker Protection (Amendment of Equality Act 2010) Act 2023 comes into force on 26 October, placing a statutory duty on employers to be proactive in preventing sexual harassment in the workplace. It provides that an employer must take reasonable steps to prevent sexual harassment of employees in the course of their employment. The Bill amends that duty to include “all” reasonable steps. The Bill also provides a non-exhaustive list of steps employers can take to achieve reasonable steps which may be developed further in secondary legislation. Additionally, the Bill includes a complaint of sexual harassment as a protected qualifying disclosure, although this is already within the Equality Act and whistleblowing legislation.
In relation to harassment by third parties, the Bill provides that an employer must not permit a third party to harass their employee in the course of their employment and should take all reasonable steps to prevent the third party from doing so.
Entitlement to Leave
The Bill provides that parental leave and paternity leave will become day one employment rights. For bereavement leave, the Bill removes reference to “parental”, and allows a minimum of one week of leave for specified individuals who have died, as well as two weeks leave for children. Where there is the death of more than one person, the employee is entitled to leave in respect of each person. The leave must be taken at least 56 days after the person’s death. The specified individuals will be defined in secondary legislation.
Statutory Sick Pay
The Bill provides that workers now have the right to statutory sick pay on day-one, by removing the 4-day waiting period. Statutory sick pay is also strengthened by the removal of the lower earnings limit for all workers.
Trade Unions and Industrial Action
The Bill provides that the employer must give the worker a written statement of the worker’s right to join a trade union, at the same time that the employer is required to give the worker their statement of employment particulars.
Listed Trade Unions also have the right to access the employer’s workplace on one or more occasions, for the purposes of meeting, representing, recruiting or organising workers, and to facilitate collective bargaining.
The Bill aims to provide trade unions "greater freedom to organise, represent and negotiate on behalf of their workers”, by repealing the majority of the Trade Union Act 2016. Additionally, at present, trade unions can only be recognised by the Central Arbitration Committee, if the membership of the trade union is 10% of the workers constituting the relevant bargaining union. The Bill seeks to increase accessibility by decreasing the 10% test to 2-10%. It also removes the requirement of support from the bargaining unit of at least 40%.
In relation to industrial action, the Bill amends the ballot requirements. It also repeals the minimum service levels provisions, removes the requirement for trade union to supervise picketing to avoid tort liabilities, and inserts various protections for workers against detriment or dismissal where they have taken industrial action. Blacklisting legislation has also been expanded, to allow for further protections in the form of secondary legislation.
Collective Redundancies
Currently, the employer’s legal obligations for collective redundancy are triggered where there is a proposal of 20 or more redundancies, within a period of 90 days or less, at “one” establishment. The Bill removes reference to a single establishment. The effect of this is that the employer’s obligations may be triggered where there are 20 or more proposed redundancies across different locations of the business.
Equality Action Plans
The Bill provides that future regulations may require that action plans addressing gender pay gaps and supporting employees through menopause will be required by larger employers.
Particular Sectors
The Bill gives power to the Secretary of State to establish the Support Staff Negotiating Body (in England) and the Adult Social Care Negotiating Body to negotiate within their sector on their workers’ pay, their employment contracts and other matters which relate to their sector.
Enforcement of Labour Market Legislation
The Bill gives the Secretary of State a series of powers to investigate and enforce rights such as minimum wage, statutory sick pay, the employment tribunal penalty scheme, labour exploitation and modern slavery. It is envisioned that such powers will be discharged by the new Fair Work Agency, which will bring together existing enforcement bodies to enforce these rights.
Conclusion and implementation
Some of Labour’s proposals in their plan to “Make Work Pay” have not been included in the Bill, such as the “right to switch off” (preventing employers from contacting their employees outside of their contracted working hours) and the move towards a single status worker. However, Labour has provided that their plan to Make Work Pay does not stop with this Bill, and the Government has published a “Next Steps” document outlining further reform for employment legislation to implement in the future.
A significant issue seems to be timescale for implementation of these measures, which now seems to be many months away and subject to lengthy consultation, causing some to doubt whether this really delivers on the promise of urgent reform. Indeed, the expectation is that the Bill will not be passed into law until at least June or July next year, and it could be a period of 2 years until the planned changes take effect. For business, this means a further period of some uncertainty before we see the finer details.
If you have questions or concerns about the Bill and implementing the new obligations within your business, please contact Chris Phillips or any member of the Employment Law team for guidance on 03330 430350.
