Employment Rights Bill unveiled

As part of its Make Work Pay plan, the long awaited and much heralded Employment Rights Bill has been introduced to Parliament today as it takes its first formal steps to becoming law. Hailed in Labour’s manifesto as being aimed at both upgrading worker’s rights and tackling poor working conditions while benefitting businesses, the Government is attempting to show the benefits of a “pro-business and pro-worker” approach.

As promised, the Bill has been introduced within the first 100 days of holding office. However, none of the headline grabbing promises will be implemented immediately and will in any event be subject to further consultation. The Government is also expected to publish plans at a later date for further legislation in the future, which are not included in the Bill.

The Bill introduces the following measures:

• Day one unfair dismissal rights. This has been much discussed in both the media and within employers’ organisations, with employer groups worrying that they would be forced to reconsider hiring decisions. However, it now looks as though there will be consultation on a statutory probation period for new hires to assess their suitability for a role. Subject to that consultation, the probationary period will apply to all dismissals with the exception of redundancy where a fair process must still be followed.

• Enhanced protection for workers in connection with shift work and rights to be given reasonable notice of a shift or any cancellation or change of a shift.

• The end of so called ‘exploitative’ zero-hours contracts with a right for such employees to have a guaranteed hours contract if they work regular hours over a defined period. This was following research showing that 84% of zero hours workers would prefer to have guaranteed hours.

• The strengthening of flexible working rights of employees by making it the default position, unless the employer considers it is “reasonable” to refuse on one of nine statutory reasons

• Limit the use of fire and rehire practices unless the employer can justify the variation which has to be due to serious financial hardship.

• Clarify the definition of “establishment” for the purposes of collective consultation. The introduction of day one rights to paternity, unpaid parental and bereavement leave.

• The removal of the current three-day waiting period and the lower earnings limit for statutory sick pay.

• The need for employers to consult workers in connection with any written policy about the distribution of tips and gratuities and to carry out reviews of these policies.

• Strengthening the provisions of the Equality Act regarding the new obligations on employers to prevent sexual harassment and liability for harassment by a third party– due to be implemented on 24 October 2024.

• The requirement for employers with 250 or more employees to adopt an Equality Action Plan” regarding gender pay gaps and supporting employees through the menopause.

• Strengthening protections for pregnant women and new mothers, including protection from dismissal while pregnant, on maternity leave and within six months of returning to work. This is with the intention of keeping people in work longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow.

• Establishing a new enforcement agency, the Fair Work Agency, which will bring together existing enforcement powers and enforce rights such as holiday pay. This will run in conjunction with the current Employment Tribunal system as an alternative remedy for employees.

• Repeal the Minimum Service Levels legislation introduced by the previous Government to mitigate the impact of strikes, thereby enhancing employees’ rights to withhold their labour.

• Giving better consideration for the cost of living when setting minimum wage rates and removing age bands which are considered discriminatory.

• Various increased rights regarding the right to join a trade union, including the obligation to provide a written statement to employees that they have the right to join one and detailed provisions for unions to enter into access agreements with employers.

In addition, the Government will publish a further ‘Next Steps’ document to outline reforms that it will look to implement in the future. Subject to consultation, these will include:

• A ‘right to switch off’.

• Committing to end pay discrimination by expanding the Equality (Race and Disparity) Bill, making it mandatory for large employers to report any ethnicity and disability pay gaps.

• Introduction of a single status of worker and moving towards a simpler framework for employment status.

• Reviews of the parental leave and carers leave systems.

At this stage the commencement date is unknown as it needs to get through Parliament. We are expecting a date to be set further in the future to give employers time to prepare which might be as late as 2026.

If you’d like to discuss the impact of the Employment Rights Bill on your business, please contact B P Collins’ employment team at enquiries@bpcollins.co.uk or call 01753 889995.