The recent Employment Rights Bill (ERB) contains around 160 pages of Government proposals for the reform of workers’ rights, that employers in England and Wales may need to navigate in the months ahead.
The bill include 28 separate employment law reforms, although many will be subject to further consultation with stakeholders, so it’s likely that the majority will not take effect any earlier than 2026.
That gives employers two years to prepare themselves for some quite substantial potential changes!
Here are just a few of the proposed changes…
Unfair dismissal
The bill proposes to end the current two-year qualifying period and instead introduce a day one right for employees to claim unfair dismissal. Crucially, that right will only apply once the employee has started work, meaning that a claim cannot be made if a signed (and presumably binding) contract is withdrawn by the employer before the start date.
Protection against dismissal will also be strengthened for pregnant women and those returning from maternity leave, making it unlawful to dismiss women within six months of their return date, except in very specific circumstances.
Fire and re-hire
Clause 22 of the ERB will make it automatically unfair to dismiss an employee for refusing to accept a change to their contract of employment. This means that a dismissal will be deemed unfair if the principal reason is either that the employee refused to agree to a variation of their contract, or to enable the employer to recruit another person (including rehiring the employee who has been offered the changed terms) on new terms but substantially the same duties.
This is to combat the practices such as that recently demonstrated by P&O, when a significant proportion of the workforce was dismissed with the subsequent recruitment of agency workers on less favourable terms.
Zero hours and low hours contracts
The bill will introduce a right to guaranteed hours and a contract, reflecting the hours eligible workers regularly work over a given period. This also applies to low hours contracts, to prevent unscrupulous employers from replacing zero hours contracts with ‘30 minute contracts’, in a bid to avoid the obligation to guarantee hours.
Workers who are not offered a guaranteed hours contract can bring a tribunal claim to recover any financial losses suffered as a result. Although this will be capped, we do not know yet what that cap will be.
Sexual harassment
The Equality Act 2010, which is due to come to force on 26 October 2024, introduces a positive duty on employers to take “reasonable steps” to prevent sexual harassment of staff in the workplace. This will be amended by the ERB to require employers to take “all reasonable steps”. A successful claim of sexual harassment where there has been a failure to comply with the duty will come with an uplift in compensation of up to 25%.
Click here to listen to one of our partners talking about the new duty on employers regarding sexual harassment here
Flexible working
Under current legislation, employees can make two requests per year for changes to their working arrangements, which must be dealt with in a reasonable manner by employers. The ERB does not appear to have enhanced the rights around flexible working, other than to suggest that employers need to provide clearer reasons for their decision, something they are already advised to do in any event.
Collective redundancies
The obligation to consult on a collective basis when 20 or more employees are dismissed by reason of redundancy used to apply when those redundancies were at “one establishment“. The ERB seeks to introduce this obligation when redundancies of more than 20 are contemplated across the entire business.
Next steps…
At the same time as the ERB was published, the Government also published a policy paper which sets out the next steps it intends to take following publication of the bill. This confirms that many of the policies set out in the ERB will be developed through regulations and, in some instances, Codes of Practice, once the bill receives Royal Assent.
Consultation is expected to begin in 2025 and the reforms are not expected to take effect any earlier than 2026, so we will be watching closely as the outcomes of the proposed consultations become clear.
For more information on how the Employment Rights Bill is likely to impact on your organisation, or to discuss any other aspects of employment law, feel free to contact our team