The long-awaited Employment Rights Bill 2024 has recently been published on 10 October 2024. The Bill introduces key legislative changes for employment rights in the UK in line with many of Labour’s manifesto commitments to improve the employment rights of workers and employees. This Bill, once enacted, will embody a historic shift in employment rights in the UK.
In this article, we outline a summary of the current legal framework, the significant changes that the Bill will bring to employment law and the time frame for these changes to come into force.
When to expect these changes
As the government is expected to begin consulting on these reforms in 2025, it is anticipated that the majority of reforms will take effect no earlier than 2026. In preparation for this change, employers have plenty of time to amend their policies to ensure compliance with the new amendments to employment law.
Day one right to unfair dismissal
Current position
Employees must serve two years’ of continuous employment to have the right to bring an unfair dismissal claim against their employer. This means that probation periods can last up to two years with employers able to dismiss employees without any major repercussions such as unfair dismissal claims.
What is planned and when?
The Bill provides employees with the right to bring an unfair dismissal claim against their employer from the first day of their employment. Removing the two year waiting period means that employees will now receive strengthened statutory protections from day one as well as greater job security.
The government has revealed that the reforms to unfair dismissal will not come into effect any sooner than autumn 2026, and until then the current qualifying period will continue to apply.
Sick pay
Current position
Currently, an employee must have been sick for four days in a row to qualify for statutory sick pay (SSP). This is the right to £116.75 per week for up to 28 weeks for employees earning at least £123 per week.
What is planned?
The new change means that all workers, including those below the current earnings limit, will now be entitled to sick pay from their first day of their sickness absence. However, those paid below the £123 threshold are likely to receive a lower rate of SSP.
Enhanced family rights
Current position
Currently, all women are entitled to 52 weeks maternity leave, however to qualify for this leave, they must have 26 weeks of continuous service and earn an average of at least £123 a week. Soon to be fathers and partners of mothers are entitled to paternity leave if they are employees. They must also give sufficient notice and have worked for their employer for at least 26 weeks. If the baby is stillborn from 24 weeks of pregnancy or born alive at any point during the pregnancy, parents will still be entitled to the requisite leave.
What is planned?
Mothers will have additional protection from redundancy when on maternity leave and for a period after they return from maternity leave. The Bill bans dismissals of women who are pregnant, on maternity leave or during the 6 month return to work period – except in specific circumstances.
The Bill introduces day one paternity and unpaid parental leave rights for employees. The Bill also brings day one rights to paid bereavement leave. This derives from the current parental bereavement leave regime. Employees will be entitled to one week’s bereavement leave where the death is someone other than the individual’s child.
The Bill offers further protections for employees who have taken family leave through rights to claim unfair dismissal against their employer following such periods of family leave.
Flexible working
Current position
Staff can request flexible working arrangements such as compressed working hours or working from home from their employer. Flexible working requests can be submitted at any point during the course of employment. However, there has been no duty on the employer to agree to such arrangements. There are no statutory restrictions or guidance for employers with regard to responding to flexible working requests.
What is planned?
The Bill strengthens flexible working rights so that employers may only refuse a request for flexible working where it is unreasonable to grant such a request. This seeks to create a presumption that flexible working requests are approved unless it is not feasible on business grounds to approve the request. The Bill provides a specified list of grounds for refusal, such as there being a burden of additional costs or a negative impact on meeting customer demands. Additionally, employers will now be obliged to provide written reasons stating why a request is reasonably refused.
Zero hour contracts
Current position
A contract where there is no guarantee of work is known as a zero-hour contract because there is no minimum amount of hours to be worked by the worker. There have been no statutory restrictions on this type of contract, so employers have the freedom to use them and offer workers varied working hours on a week-by-week basis.
What is planned?
Zero hour contracts are now deemed ‘exploitative’ and employers will not be allowed to require zero hours workers to comply with one-sided flexibility requirements.
Under the Bill, employers will have to offer workers a guaranteed-hours contract based on the hours they have completed during a 12 week reference period. There will also be a right to reasonable notice of a shift for workers and a duty to compensate them for cancelling shifts without reasonable notice.
Fire and rehire
Current position
This practice refers to employers dismissing staff to then re-engage them immediately on new contractual terms which are typically less favourable. This practice has been controversial and so a Statutory Code of Practice on dismissal and re-engagement was implemented to guide employers. The Code states that fire and rehire should be used as a last resort after exhausting alternative solutions.
What is planned?
This change will clamp down on ‘fire and rehire’ which will only be permissible where corporate restructuring requires such a practice in the event there is no alternative option. The Bill does not specifically ban ‘fire and rehire’ but instead, proposes to reform the existing law to provide effective remedies against the practice. It will also be automatically unfair to dismiss employees for simply refusing a contract variation, subject to the exception noted above.
Other provisions in the Bill
- Trade Unions reform: The Bill repeals the existing anti-trade union laws brought in by the previous administration and looks to modernise union access in the workplace. The Bill eases restrictions on industrial action and introduces the possibility of electronic balloting for union use. There will be a duty on employers to regularly inform workers of their right to join a union, a simplification of the statutory recognition process for unions, and the removal of current vote thresholds to make recognition easier to obtain.
- Equality Action Plan: The Bill introduces the ‘equality action plan’ which requires employers with over 250 employees who are not public authorities to publish equality action plans to demonstrate the steps they propose to take to address gender inequality. These action plans are intended to address gender pay gaps and provide further support to female employees going through the menopause. This change looks to promote inclusivity and diversity throughout the UK workforce.
- Fair Work Agency: The Bill establishes a brand-new Fair Work Agency which has new powers to enforce holiday pay and minimum wage. This new enforcement body will be able to enforce new penalties on employers who breach employment rights. In practice, enforcement officers entering any premises shall have inspection powers and the ability to seize items where necessary.
- Sexual harassment: There is now a positive duty on employers to take reasonable steps to prevent sexual harassment in the workplace. This duty will be enforced from 26 October 2024 and employers will be expected to take reasonable steps to recognise this duty from this date. If you would like to read further information on this duty on employers to prevent sexual harassment, please see our recent article on the topic here.
What does it mean for you?
In light of these changes, employers should review their current policies and procedures to ensure their continued compliance with the law. Whilst this Bill represents a broad framework with many changes not enforceable until 2025, it is advised that all employers make the necessary preparations for these very significant changes to UK employment law.
How can we help you?
If you need any help or advice regarding how these changes may impact your business, please don’t hesitate to get in touch with the Employment team.
