The Employment Rights Bill was published on the 10th October 2024.
It was the Government stated intention that it would introduce an Employment Rights Bill within 100 days of taking office. It has met that target in 98 days, the deadline having been the 12th October 2024.
Employment Rights Bill
The key elements of the Employment Rights Bill are as follows:-
- Zero Hours Contracts: A ban on what the Government calls “exploitative” and “one sided” zero hours contracts, ensuring that workers have the right to a guaranteed-hours contract that reflects the number of hours regularly work based upon a twelve-week reference period, and reasonable notice re shift changes. Under the Employment Rights Bill, workers will also be entitled to be compensated should shifts be either cancelled or finish early. Nevertheless, employees will be able to have a zero-hours contract should they want one
- Fire & Rehire: A ban on ‘fire and rehire’ except where there is no other viable option to ensure the survival of the business and where a proper procedure has been followed. The statutory code introduced by the previous Government will also be replaced
- Unfair Dismissal: Currently, employees have to have 2 years of continuous service before acquiring the right to bring a claim for unfair / constructive dismissal. Workers will now have this right from day 1 of their employment. Nevertheless, employers will still be able to incorporate probabtionary periods into their workers contracts of employment (referred to as an ‘initial period of employment’), of up to what the Government proposes will be 9 months (to be consulted upon prior to a final decision being made). This proposed 9 months is longer than the 6 months that had been recently reported. This means that whilst the Government will still be making the right to bring a claim for unfair dismissal a day 1 right, the new legislation will include provisions that will apply to dismissals during probationary periods, including the fact that employers will only have to follow an abridged process (referred to by the Government as a ‘light touch’ process, and which could possibly be confined to just holding a meeting - to be consulted upon) compared to the full set of procedures that will otherwise apply. Moreover, lower compensation rates may apply to unfair dismissals that occur during a probation period (subject to consultation). Furthermore, dismissing women who are pregnant, on maternity leave, or who have returned to work within the last 6 months will be prohibited, except in certain circumstances
- Statutory Sick Pay (SSP): Entitlement to SSP will also become a day 1 right (as opposed to having to wait 3 consecutive days at present), and the right to SSP will be extended to all workers by removing the lower earnings eligibility threshold (currently £123.00 per week). Nevertheless, the rate of SSP that those earning below the lower earnings eligibility threshold will receive will be subject to consultation by the Government
- Day One Rights: As well as making the right to claim for unfair / constructive dismissal and to SSP day 1 rights, unpaid parental leave, paternity leave, and a new statutory right to paid bereavement leave (i.e. the current right to parental bereavement leave will be a extended to a general entitlement to bereavement leave) will also become a day 1 rights.
- Flexible Working: The day 1 right of employees to request flexible working will be enhanced, in that the grounds for refusal (which remain the same as at present) must be reasonable. Hence, the main change is the reasonableness test
- Single Enforcement Body: A new body called the 'Fair Work Agency' will consolidate the enforcement roles currently handled by the HMRC's National Minimum Wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate, with the remit of enforcing employment rights and compliance. It will also be responsible for enforcing holiday pay.
- Trade Unions: The Employment Rights Bill contains several provisions re trades unions. They include: (i) statutory recognition to be simplified (ii) a new entitlement for union representatives to engage with, advocate for, recruit, and manage member activities within the workplace (iii) a requirement for employers to supply their employees with written particulars setting out their trade union rights, alongside their contract of employment / employment particulars (iv) Strikes (Minimum Service Levels) Act 2023 to be rescinded (v) enhanced protections for members
- Gender Pay Gap Reporting / Menopause: Those currently required to report their gender pay gap data will also be required to compile action plans to address their pay gap and on how they will support those going through the menopause
- Enhanced Harassment Protection: A requirement upon employers to take ‘all reasonable steps’ to prevent sexual harassment, adding sexual harassment to the list of whistleblowing protected disclosures, and protections against third party harassment
- Other Measures Within The Employment Rights Bill: To create a framework for setting pay and conditions in the adult social care sector, and to reinstate the School Support Staff Negotiating Body (SSSNB) and the two-tier code for public sector contracts
'Next Steps' Document
The following have not been included within the Employment Rights Bill, but the Government has confirmed with a 'next steps' document (published at the same time as the Employment Rights Bill) that they will be addressed at a future point:-
- A Legal Right To Switch Off / Disconnect: The right to disconnect from work communications and obligations outside of regular working hours to protect employees’ well-being and work-life balance, by setting boundaries between their personal and professional lives.
- Creating A Single Status Of Worker: Currently, there are 3 types of employment status – employees, workers, and the self-employed. Labour plan to amalgamate the categories of employee and worker so as to create one single status of ‘worker‘ who would have the same basic employment law rights. The only people outside of the new category of worker would be the genuinely self-employed.
- Equality (Race and Disability) Bill: To include the following: (i) extending the right to equal pay to ethnic minorities and the disabled (ii) Introducing ethnicity pay gap reporting and disability pay gap reporting for firms with 250 or more employees
- NMW Bands: The introduction of a “genuine living wage”. Hence, one rate will apply across the board, with the age bands removed. However, as we highlighted in a recent article, on the 30th July 2024 the Secretary of State for Business and Trade, Jonathan Reynolds, announced that the move towards having one rate across the board for the National Living Wage would be phased in gradually over a period of time. That is, the National Minimum Wage age bands will remain for some time yet. The remit of the Low Pay Commission has been expanded to factor in the cost of living.
- Reviews: Carers' leave and parental leave to be reviewed
Timeframe
The Government has confirmed that there will be extensive consultation (to start in 2025) over the measures set out in the Employment Rights Bill. It has also confirmed that most of the measures within the Employment Rights Bill will not be implemented until 2026 at the earliest.
Watered-Down
Nevertheless, it is notable that what ultimately appeared in the Employment Rights Bill was somewhat watered-down compared to what had been proposed in Labour's manifesto and new deal. For example, the measures set out in the Employment Rights Bill in relation to flexible working, apart from a reasonableness test, are no different to what already exists. The reasonableness test adds very little, and it is hard to see how it renders flexible working 'the default'.
There is also no outright ban on zero-hours contracts, with the Employment Rights Bill incorporating a right for workers to have a zero-hours contract should they wish.
Moreover, there was no extension of sick pay to the self-employed included within the Employment Rights Bill.
