Government Publishes Employment Rights Bill

27 Nov 2024

Updates to the Employment Rights Bill with a ‘Next Steps’ Document

As we near the end of November, we have the opportunity to look back and evaluate the changes that have been made, especially after the Employment Rights Bill was published early October. The government unveiled this bill stating that its implications “will represent the biggest upgrade in employment rights for a generation”; alongside the legislation, the government published a ‘Next Steps’ document that outlines their long-term plans for the Plan to Make Work Pay strategy. But what does all this mean for employers?

Changes will not be made straight away, as the reforms will need to be delivered in phases. Some will require changes in the law, and others will require secondary legislation to implement the reforms. The government have said they will publish several targeted consultations in several areas that will inform the government’s next steps. It is anticipated therefore that the reforms will not take effect until 2026. For example, the government have stated that the reforms to unfair dismissal will take effect no sooner than autumn 2026.

However, we will see changes to the national minimum wage (NMW) law come into force, along with the repeal of some industrial action laws that had been introduced by the former government. In July this year, we saw the Low Pay Commission’s remit adjusted, which ensured every adult worker would be treated the same in respect of the NMW. For industrial relations, the government has intended to repeal the Strikes (Minimum Service Levels) Act 2023, which gives the government the power to set minimum service levels for key public service during strike action. Furthermore, this will also repeal the regulations that allow agencies to provide replacement labour during strikes.

Below we have highlighted the key provisions in the Bill:

Make unfair dismissal a ‘day one’ right – the government will consult on a statutory probation period (a preference of 9 months) for new hires to assess their suitability for a role.
Family friendly rights – this includes but not limited to strengthening flexible working rights; a right to bereavement leave from day 1; paternity and parental leave from day 1; protections for pregnant women and new mothers, including protection from dismissal while pregnant, on maternity leave and within six months of returning to work.
Strengthening Statutory Sick Pay – removing current three-day waiting period and the lower earnings limit
Banning ‘exploitative’ zero-hour contracts – the government will give workers on zero-hour contracts and workers with a ‘low’ number of guaranteed hours who regularly work more than these hours, the ability to move to guaranteed hours contracts that more accurately reflect the hours they regularly work over a 12-week reference period. Furthermore, the government has stated it will ensure reasonable notice is given to workers for any changes in shifts or working times, with proportionate compensation for any shifts cancelled or amended at short notice.
End ‘unscrupulous fire and rehire practices’ – this subject to if there is genuinely no alternative. It will be automatically unfair to dismiss an employee for refusing a contract variation, however there will be a very limited exception where the employer is required to avoid financial issues that could threaten the business.
Measures to extent the time limit for bringing employment tribunal claims – there have been no further details aside from this being added to the Bill via amendment during its passing through parliament.
Large employers to create action plans addressing gender pay gaps and supporting employees through menopause
Redundancy – Employers will need to collectively consult where 20 employees are affected across the whole business. This will likely mean employers will have to collectively consult more often. The government has also said it is committed to consulting of lifting the cap of the protective award if any employer is found not to have properly followed the collective redundancy process.
Establish a new enforcement agency – this will bring together existing enforcement powers and enforce rights such as holiday pay.
Trade Unions and industrial action – to simplify the union recognition process and bring a new right of access for union officials to meet, represent, recruit and organise members. Alongside this, the Bill will consult to modernise the legislative framework that underpins trade unions.
Protection from Harassment – the Bill includes provisions to extend the current duty to ‘all reasonable steps’. It changes the law on sexual harassment to protect workers from harassment by third parties.
Introduce provisions for sector wide collecting bargaining for school support staff and adult social care workers.

As previously mentioned, the government released a ‘Next Steps’ document that set out its time frames and priorities. Not noly that, but the document outlined the reforms that the government are looking to implement in the future. These include:

A right to ‘switch off’ – this will prevent employees from being contacted out of hours, except in exceptional circumstances
A commitment to end pay discrimination – to expand the Equality (Race and Disability) Bill to make it mandatory for large employers to report their ethnicity and disability pay gaps.
A move toward a single status of worker and transition towards a simpler two-part framework for employment status.
Reviews of parental leave and carers leave systems to consider where there is a need for change.

Here, we go back to the overall question; what does this mean for employers? The Bill leaves employers in no doubt of the government’s commitment to the reform of employment law. What is reassuring is that many of these changes will not come into force for some time and most will be subject to extensive consultation.