Employment Rights Bill: what you need to know

The UK government has announced more details about planned employment law reforms after introducing the Employment Rights Bill last week. There are 28 separate reforms that it says will boost pay and productivity as well as improved security for workers.

These plans are part of the government’s Make Work Pay Plan. The Bill must now pass through Parliament. That means changes are unlikely to take effect for a couple of years. But it is essential for employers to understand the changes now rather leaving things to the last minute.

Here are some key takeaways from last week’s announcement.

Employment Rights Bill key points

Flexible working will become ‘default’

The Employment Rights Bill proposes that flexible working will become the ‘default’. And it means employees can request flexible working from day one. Employers will only be able to refuse an employee flexible working if they can prove it is unreasonable.

Valid reasons will include:

  • The burden of additional costs.
  • A detrimental effect on the ability to meet customer demand.
  • An inability to re-organise work among existing staff or recruit additional staff.
  • A detrimental effect on the ability to meet customer demand.

Employees already have a ‘day one’ right to request flexible working arrangements under the Employment Relations (Flexible Working) Act 2023. Whilst the proposed legislation is similar, the onus will now be on employers to show why they cannot accommodate a request.

Day one right to unfair dismissal 

A major reform in the Bill is to remove the existing two-year qualifying period for the protection from unfair dismissal. That means an employee can take legal action of unfair dismissal from the moment they are employed.

The government has said it will be willing to consult on a new statutory probation period. According to reports in The Guardian, that could be a nine-month period. 

Parental rights strengthened

The previous government had already introduced a number of reforms for parental rights, including enhanced paternity leave. But the Bill introduces day one rights for parental, paternity and bereavement leave. At the moment, employees need to have 26 weeks of continuous service before qualifying for paternity and parental leave. Bereavement leave will be extended beyond existing provisions for parents who lose a child. 

Zero-hour contracts

The government says it wants to end ‘exploitative’ zero-hour contracts. The Bill proposes workers will have a right to be offered a contract with guaranteed hours if they work regular hours over a defined period. The new legislation repeals the Workers (Predictable Terms and Conditions) Act 2023, which was due to come into force this year.

Sick pay changes

The bill plans to reform Statutory Sick Pay (SSP) by removing the three-day waiting period. It means SSP will be available from the first day of illness. Currently, employees are not entitled to SSP until their fourth day of absence and they must earn ‘at least £123 a week’. Once the legislation is passed, sick pay will be available from day regardless of earnings.

Tougher sexual harassment laws

New laws are being introduced in a couple of weeks under the Workers Protection Act 2023. We have already focused on these in an earlier blog. But the Bill introduces even tougher legislation that states employers must take ‘all reasonable steps’ to prevent sexual harassment rather than ‘reasonable steps’. 

It also makes employers responsible for protecting workers against harassment by third parties. This measure was removed from the Workers Protection Act, which comes into force on 26 October.

Fire and rehire

The Bill puts measures in place to restrict an employers’ ability to fire and rehire by amending the law on unfair dismissal. It aims to stop the practice of dismissing employees from their existing contract and rehiring them on worse contracts.

The proposed legislation amends the law so that if an employee is dismissed for failing to agree to a change in contract it will be treated as unfair. Employers would have to show evidence of financial difficulties and demonstrate changes in contractural terms was unavoidable.

Also, collective consultation and notification will apply where an employer is proposing redundancies of 20 or more. The Bill strengthens protection for employees against collective redundancy by amending legislation to ensure these obligations apply regardless of whether the redundancies are taking place at one establishment or not. 

Employers proposing to make 20 or more people redundant at one establishment in a 90-day period must provide notification at least 30 days before the first redundancy takes effect.

A new Fair Work Agency

A Fair Work Agency will be established. It will combine existing enforcement functions around minimum wage, statutory sick pay, labour exploitation, the employment tribunal penalty scheme and modern slavery. It will also cover a new area of enforcement, the holiday pay policy.

The agency is likely to combine the functions of the Gangmasters and Labour Abuse Authority, the Employment Agencies Standards Inspectorate and National Minimum Wage enforcement team at HMRC.

Equality improvements

The Bill will require more employers to develop and publish equality action plans showing steps they are taking in relation to their employees with regard to gender equality. This applies only to those employing 250 or more employees as well as the public sector.

What happens next?

As with any Parliamentary Bill, it must pass through the legislative procedure before becoming law. That gives Parliament the chance to make amendments.

Most of these proposals will become law. The government has committed to delivering other laws using current powers. For example, it says the ‘right to switch off’ will no longer be part of the legislative process.

This, it says, is because powers already exist that prevent employers from contacting staff outside of working hours.

Regardless of the Parliamentary process, it is essential for employers to understand what they need to do – and not to ignore what is coming down the line.

If you would like information, you can speak to our experienced team today. Or contact us and we will keep you informed of future workshops about the new laws.