On 10th October 2024, the UK government published the long-awaited Employment Rights Bill. With over 158 pages of provisions, this Bill marks a significant shift in employment law, impacting both employers and employees. While many of the changes will not take effect until 2026, businesses should be aware of what’s coming and start planning accordingly.
Here are some key highlights of the Employment Rights Bill:
1. Unfair Dismissal Rights from Day One
One of the biggest changes is the removal of the two-year qualifying period for unfair dismissal claims. Under the new Bill, employees will have the right to claim unfair dismissal from their first day of employment, as long as they have started work. This is a major development, and businesses will need to ensure that their probationary processes are thorough and effective. A consultation is planned on a statutory probationary period, with rumours suggesting it may be set at nine months. Employers may need to adjust their approach to dismissals during probation, as tribunals will take into account whether an employee was in their probationary period when assessing fairness.
2. Ending Fire and Rehire Practices
The Bill takes a strong stance against "fire and rehire" tactics, making it automatically unfair to dismiss an employee for refusing to accept changes to their contract. Employers will only be able to use this practice in extreme financial distress, where it is essential to avoid business collapse. Even then, businesses will need to demonstrate they have taken all reasonable steps, including consulting with employees or trade unions.
3. Protection for Zero-Hours Workers
Zero-hours contracts are under the spotlight in this Bill. Employers will be required to offer workers a guaranteed hours contract based on the average hours worked in a previous reference period. Additionally, zero-hours workers will be entitled to reasonable notice of shifts and any changes or cancellations to their shifts. If these rights are not respected, workers can seek compensation, although the exact scales for this are yet to be determined.
4. Third-Party Harassment
Employers will soon be directly liable for harassment from third parties, such as customers or suppliers, if they fail to take "all reasonable steps" to prevent it. This is a step up from previous obligations and places a higher duty on businesses to actively protect their workforce from harassment, especially of a sexual nature.
5. Flexible Working
Although there was significant discussion about making flexible working the default, the Bill’s changes are more modest. Employees will still be able to request flexible working arrangements up to twice a year, but employers must provide a clear and reasonable justification for rejecting such requests. There’s no drastic shift to a four-day working week or similar proposals, but the need for employers to articulate their reasoning clearly has increased.
6. Enhanced Parental and Bereavement Leave
The Bill introduces Day One rights for both paternity leave and parental leave, providing further protection for new parents. Additionally, bereavement leave is set to be extended beyond the loss of a child, although further details about qualifying relationships remain to be clarified.
7. Increased Protection for Pregnant Employees
While there are already protections for employees on maternity leave, the new Bill proposes stronger protections for pregnant employees and new mothers. Although the specifics are yet to be confirmed, it is expected that returning mothers will benefit from enhanced rights for up to six months after returning to work.
8. Changes to Statutory Sick Pay (SSP)
Statutory sick pay will now be paid from the first day of illness, removing the current three-day waiting period. Moreover, the lower earnings threshold will be eliminated, meaning more workers will qualify for SSP. The exact rate of SSP will be set as a percentage of pay, simplifying the current system.
9. Gender Pay Gap and Menopause Support
Larger employers (with more than 250 employees) will be required to develop action plans not only for addressing the gender pay gap but also for supporting employees experiencing menopause. This is a notable expansion of employer responsibilities in promoting equality and well-being in the workplace.
10. Collective Redundancy Consultation
The Bill closes a significant loophole that allowed businesses to avoid collective redundancy consultations by treating individual establishments separately. Moving forward, when assessing whether the obligation to consult collectively is triggered, the total number of redundancies across the entire business will be considered.
What Should Employers Do Now?
While many of these changes will not come into effect until at least 2026, employers should begin preparing now. Reviewing contracts, updating policies, and ensuring compliance with new rules—especially around dismissals, flexible working, and third-party harassment—will be crucial.
As more details are released, particularly in the form of statutory instruments and consultations, businesses will need to stay informed and be ready to adapt.
For more in-depth analysis and advice, keep an eye on updates from Your Payroll Team.
This Bill marks a significant shift in employment law, offering more rights and protections to employees while requiring businesses to carefully navigate these changes.
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