As you may be aware, on Thursday, 10 October 2024, the Labour Party released their highly anticipated Employment Rights Bill. Whilst the Bill gives us certainty in some areas, there is still much essential detail yet to come through statutory instruments and following consultations. However, the commencement of the Act is stated to be around October 2026, leaving some time for employers to prepare.
The highlights of the Bill are as follows:
- The most notable change is that employees will be granted unfair dismissal rights from day 1 of their employment. A consultation is currently taking place regarding a statutory probationary period, which is likely to result in employers being able to terminate on more ‘relaxed’ grounds within the first 6 or 9 months of employment. Of note is that this right remains only applicable to employees and not “workers”.
- New restrictions on “fire and re-hire” will make it automatically unfair to dismiss employees if they refuse to vary their contracts, unless the employer is facing financial collapse and the proposed changes were unavoidable to allow the employer to continue trading. The overall fairness requirement of “fire and re-hire” cases will entail consideration of the degree of consultation, and whether the employee was offered any incentive in return for agreeing to the variation.
- Exploitative zero hours contracts will be curbed by complex provisions requiring employers to provide guaranteed minimum hours contracts to “workers” and not just employees. Whilst the employer will be able to provide an initial fixed-term zero hours contract, these terms will need to be established based on the hours worked throughout a prescribed reference period. Once the reference period is over, a new contract is provided to reflect the minimum hours the individual can expect to work, and this contract is to be no less favourable than the terms enjoyed by the worker during the reference period, unless the terms need to be amended as a proportionate means of achieving a legitimate aim.
- Further information to include the length of the zero hours reference period and a further explanation of the permitted reasons to amend the terms of the initial contract, will be provided through secondary legislation. Workers may also be entitled to payment where shifts are cancelled or changed on short notice.
- A new duty is contained in the Bill requiring employers to take all reasonable steps to prevent third party harassment. This imposes a much greater burden on employers to assess risks to staff and to take “all reasonable steps” to prevent harassment in the workplace.
- No significant changes are proposed to flexible working rights despite rumours of a right to demand a 4 day week. There is, however, a new requirement to explain to employees who have requested flexible working why the applicable prescribed reason has been used a reason for rejecting the request. Previously, it was enough to only state that the prescribed reason applied, without the need for further explanation.
- Day 1 rights to paternity, parental and bereavement leave have been implemented, but such leave will be unpaid.
- The Bill affords the secretary of state the power to make further regulations regarding dismissal during or after the protected pregnancy period, and amendments are proposed to allow for enhanced protection for those taking other types of family leave, such as adoption and shared parental leave.
- SSP will be available from the first day of sickness, rather than after three days which is the current entitlement.
- The Bill includes increased obligations on employers with more than 250 employees to publish action plans on their gender pay gap and supporting women through the menopause.
- Collective redundancy consultation rules reverse the Woolworths decision, making it necessary to consider numbers of dismissals across the entire business rather than the relevant “establishment”.
- The right to join a trade union will need to be included in the statement of terms and conditions (contract) issued to staff, and provides for union representatives to receive adequate access to facilities and adequate time off for union-related matters.
- Trade unions no longer need to demonstrate at the recognition application stage that 50% of workers are likely to support the recognition of the union, and under the new Bill, workers will have protection form detriment due to participating in lawful strike action.
Moore Barlow’s advice
Employers are advised to carefully consider how these changes could impact their businesses. Around 9 million employees will find themselves acquiring unfair dismissal rights previously limited by the 2-year qualifying period. This means that employers will need to put in place good systems to ensure that they are reviewing performance in the early days of employment and not delaying dealing with these issues until after the probation period.
How Moore Barlow can help
Choosing employment law solicitors from Moore Barlow provides clients with the assurance of receiving expert advice and representation from a team of experienced professionals. With a focus on delivering practical solutions to complex employment matters, the firm’s solicitors are committed to achieving the best possible outcome for their clients