Employment Rights Bill
What is the Employment Rights Bill?
On the 10th October, the Government published it’s much anticipated Employment Rights Bill, just managing to keep its promise to introduce such a bill within its first 100 days in office. At the same time it published a consultation document called “Next Steps to make work pay”. The Government seeks to “deliver economic security and growth to businesses, workers and communities across the UK” with the introduction of the Employment Rights Bill, seeing the labour market as a driving force in economic growth. After years of comparatively quiet legislative developments in employment law, those practicing in the sector finally have something to get their teeth into. Whether the government can successfully walk a tightrope in keeping employers, workers and trades unions happy remains to be seen. The increase in employers’ national insurance contributions in the recent budget might have lost them the goodwill of business already.
Although the Bill is subject to further consultation and amendment as it makes its way through Parliament, these changes are expected to come in the coming years. As well as leaving plenty of scope for discussion in legal and HR circles, this will hopefully enable those affected to understand the implications of this substantial Bill.
What reforms are going to be introduced?
Twenty-eight key reforms are set to be introduced with potentially massive impact, covering areas of employment law from unfair dismissal, fire and rehire, zero-hours contracts, flexible working and family leave rights, collective redundancies to reform of trade union legislation to name but a few. There is too much to be covered in this one article, but here are the headlines on the most eye-catching proposals.
Unfair Dismissal
Under the current rules, only employees with two years of qualifying service have protection to not be unfairly dismissed.
The Employment Rights Bill however is expected to abolish the current two-year-minimum service requirement by repealing s.108 of the Employment Rights Act 1996 and instead introduce this as a day 1 right. Once the new law is in place, which might be as late as 2026 according to some commentators, employees will have the right not to be unfairly dismissed from the start of their employment, subject to a statutory probation period.
Protection will also be increased for pregnant women and those returning from maternity leave by making it unlawful to dismiss them within six months of returning, aside from certain specific circumstances.
Statutory Probation Period
Many employment contracts will already contain probationary periods of employment, usually three to six months, for new starters. The Government intends to consult on introducing a statutory probationary period of nine months, during which it will be possible for employers to dismiss and “in which a lighter-touch dismissal process applies” [Source: Factsheet: Employment Rights Bill overview – UK Government]
These changes will not likely come into force until autumn 2026 but employers will need to review their employment contracts and in conjunction with the new unfair dismissal rules, consider reviewing recruitment and procedures and performance management during the probationary period.
Zero Hours Contracts
These have long been the focus of criticism by Unions and others because of the way in which they can be used to exploit low paid or vulnerable workers. There are said to be around 1,030,000 people employed (predominantly young, female or in full time education) on zero hours contracts in the UK, mainly in the hospitality, retail and health/social care sectors. They usually provide low pay and virtually no job security. The government wants to ban exploitative zero hours contracts by giving employees the right to a contract which gives greater security and predictability. It plans to do this by requiring employers to offer qualifying workers a guaranteed number of hours based on the number of hours worked in the reference period, which is to be decided but may well be 12 weeks. A worker is not obliged to accept an offer of guaranteed hours. Further consultation is to come. Employers will also have to give reasonable notice of shifts and changes to them and to pay workers if a shift is cancelled, moved or curtailed at short notice. [Source: Factsheet: Zero Hours contracts in the Employment Rights Bill]
Sexual Harassment
In only the last few days the Worker Protection (Amendment of equality Act 2010) Act 2023 has come into force. It stemmed from a Private Members Bill in the last Parliament and although it was broadly welcome when it was entered on the statute book, there was criticism that it had been watered down during its parliamentary journey because it only required employers to take “reasonable steps” to prevent sexual harassment at work and not the originally drafted requirement of “all reasonable steps”. The new Bill will rectify this by requiring “all reasonable steps” to be taken, as was initially envisaged.
The Bill will also impose a duty on employers to take “all reasonable steps” to prevent third party sexual harassment eg from customers or suppliers.
Both these proposals will impose significant duties on employers, particularly those in the retail and hospitality sectors.
Dismissal during pregnancy or during or after statutory family leave
Greater protection will be given to pregnant women and those on or returning from family leave, so that it will be unlawful to dismiss employees who have been pregnant or on adoption or parental leave, within six months of their return to work, apart from as in yet to be defined, specific circumstances.
Flexible working
There has been a statutory scheme in force for several years now giving employees the right to ask for flexible working. Employees rights will be strengthened in that an employer will only be able to refuse a request for flexible working if it is reasonable to do so. At the moment an employer only needs to give an “honest” refusal. Employers are going to need to consider flexible working requests much more carefully.
And there’s more …
Much more. The move to a single status worker, reforms relating to parental leave and the right for employees not to be contacted out of hours (A Right to Switch Off) are some of the areas which are still subject to further consultation.
Final thoughts
It is important for individuals and companies to carefully consider these reforms as further details be released in the coming years. Individuals need to recognize their rights in the course of their employment and employers must recognize how to manage their employees.
With a significant number of changes affecting a vast number of people, an increased number of claims in Employment Tribunals is to be expected. Employers will need to carefully consider and possibly amend established policies and procedures and review any contractual terms relating to probationary periods, performance and the need to take disciplinary action.
The next two years will see a great deal of consultation on the Bill and its final form will no doubt be significantly different from what is set out so far. One aspect of the changes, particularly in respect of unfair dismissal and flexible working requests is that there could be a great deal many more claims being issued in the Employment Tribunals, which are struggling to keep up with their existing workload, so unless funding is put into the Tribunal system the situation might only get worse.
Michael Scutt, Partner, Crane & Staples LLP
Mira Patel, Trainee Solicitor, Crane & Staples LLP
