Employment Rights Bill - Key changes

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The highly anticipated Employment Rights Bill was revealed on 10 October. If passed, the Bill will amend the Employment Rights Act 1996 (ERA) to introduce some of the most significant employment law reforms for a generation. The Bill seeks to improve protections for employees and provide greater clarity for both employers and employees on their rights and obligations.

Although the Bill is wide-ranging, we have provided a breakdown of some of the key changes proposed:

Additional protection from Unfair Dismissal

As the law currently stands, employees do not have a right to make an unfair dismissal claim until they have 2 years of continuous service (other than in certain limited circumstances). The suggested reform would make such a claim a day one right. This proposal has caused consternation for some employers, with commentators stating that it will act as a disincentive to businesses taking a chance on new hires. However, the proposal is not as extreme as it appears on first glance. The Bill introduces an ‘initial period of employment’ (expected to be around nine months) where dismissals are not subject to fair procedure requirements under s98(4) of the ERA. This ‘initial period’, essentially a probation period, seeks to balance employee protection, with the employer’s ability to dismiss an employee should things not be working out as expected.

Zero-Hours Contracts

Contrary to popular belief, the new Bill will not ban zero-hours contracts, however it will provide the right for workers currently on zero-hours contracts to be entitled to a regular minimum number of contracted hours, based on the number of hours they have worked over a 12-week reference period. It will be up to the worker to decide if they would like to accept these hours, so if zero-hours is the arrangement that works best for them, then they don’t have to accept the offer. If they reject the hours, the employer must periodically offer the employee guaranteed hours at the end of each reference period.

Flexible Working

Employees currently have the right to request flexible working after 6 months of employment. The Bill seeks to introduce the right to request flexible working from day one. Employers will be able to refuse this request only on a specific ground and the refusal must be reasonable. Reasonable grounds for refusal include; the burden of additional costs, detrimental effect on the ability to meet customer demand and detrimental impact on quality (among other reasons).

Statutory Sick Pay (SSP)

SSP currently begins on day four of sickness absence, however the proposed Bill provides that it will become payable from the first day of sickness. The new weekly rate of SSP is the lower of £116.75 and the prescribed percentage of the employee’s normal weekly earnings.

Leave

The Parental Bereavement Leave provisions of the ERA 1996 are to be amended to ‘Bereavement Leave’, widening the scope of the circumstances under which an employee is entitled to time off following the death of a loved one. The Bill also provides that paternity leave must be offered from the first day of employment rather than after the current 26-week eligibility period.

Fire and rehire

If passed, the new fire and rehire protections will provide that should an employee be dismissed following a refusal of a variation to their contract, that dismissal will be deemed to be unfair. The dismissal will also be unfair should the employer recruit another person to perform substantially the same job but under different terms. Fire and rehire will be lawful only in a situation whereby, were the Company not to fire and rehire on new terms, the business would fail.

Pregnancy and new mothers

Should the Bill pass, it will be unlawful to dismiss a mother returning after maternity leave within 6 months of their return. There will be only very limited circumstances where this right will not apply.

Trade unions

The Bill is set to repeal the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023. The provisions are intended to strengthen Trade Union rights and employees must be provided with a written statement from employers that confirms they have the right to join a trade union.

Collective redundancy

As it currently stands, a notification to the Secretary of State is triggered when there are 20 or more redundancies proposed at one establishment (in one location). The proposals provide that redundancies in different locations across the same business are now captured by the collective redundancy provisions.

Fair pay

As part of the government’s ‘Make Work Pay’ commitments, there are plans to remove age bands when considering minimum wage, meaning all adults, regardless of age will earn the same minimum wage. There are also plans for a framework for a Fair Pay Agreement process within the adult social care sector. This will be developed through a consultation process, with the aim being to empower workers and employers within that sector to negotiate fair pay, terms and training.

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The next steps

There are some provisions missing from the Bill that were widely expected to be included, particularly the ‘right to disconnect’. This is still planned to go ahead in the future following consultation in 2025 and would protect an employee’s time away from work, ensuring they won’t be penalised for not responding to work emails, texts and phone calls outwith their working hours. The government will also be reviewing the parental leave system and considering the benefits of paid carer’s leave.

The government has indicated that most of the proposed reforms will come into force no earlier than Autumn 2026, so there is plenty of time for Employers to prepare. As always, should you have any questions on what this will mean for you or your company, our Employment and Holistic HR team are on hand to help.

Want to understand the implications of what these changes will mean for you or your company?

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