Rarely is a new piece of legislation as hotly anticipated as the Employment Rights Bill ("the Bill"). With Labour's Plan to Make Work Pay and their election manifesto foreshadowing the content of the Bill we knew there was a big shake up of workers' rights on the way. The Bill has not disappointed.
Significant changes
Day 1 right to unfair dismissal
Probably the most significant change is the removal of qualifying service for unfair dismissal protection. Regulations are to set out an "initial period" during which a modified version of the right will apply. According to the announcement that preceded the publication of the Bill the UK Government is to consult on a statutory probation period for new hires, intended to allow employers to properly assess an employee's suitability for a role, during which a full capability process would not be required to be followed prior to dismissal. A statutory probationary period of 6 months had been mentioned in the press recently but the paper "Next Steps to Make Work Pay" that accompanied the publication of the Bill confirms the UK Government's preference is 9 months.
The UK Government have said the unfair dismissal reforms will not take place any earlier than Autumn 2026.
Other day 1 rights
As expected the Bill provides for the removal of qualifying service for access to statutory maternity pay ("SMP"). Currently SMP is only payable to employees who have been continuously employed for at least 26 weeks by the 15th week before the baby is due. Employers can usually reclaim 92% of the SMP they pay to employees.
Additionally, paternity and parental leave will become day 1 rights (currently six months and one year's service is required respectively) and a new right to unpaid bereavement leave will also be available from the first day of employment.
The Bill also makes provision for universal access to Statutory Sick Pay ("SSP"). The current three "waiting days" will no longer apply, nor will the requirement to meet the lower earnings limit ("LEL") (currently £123) to be eligible for SSP. These changes to SSP will reportedly benefit over seven million employees.
Flexible working and family friendly rights
The right to request flexible working became a day 1 right with effect from April this year. The Bill seeks to strengthen this right further by making flexible working the default unless the employer can prove it's unreasonable. In addition to the removal of qualifying service for paternity and parental leave and the introduction of bereavement leave mentioned above, the Bill also introduces additional protections against dismissal for pregnant women and new mothers while pregnant, on maternity leave and for six months after returning to work.
Zero hours contracts and "fire and rehire"
For those on zero hours or low hours contracts, the Bill introduces a new right to a guaranteed hours contract if they work regular hours over a defined period. There are also new rights to reasonable notice of shift changes and payment for cancelled shifts at short notice. This is an area where we can expect unions and businesses to have fairly polarised views, and consultation may take some time.
As regards "fire and rehire" practices, the Government announcement described changes that will "shut down the loopholes" that allow these practices to continue. The Bill amends the law on unfair dismissal so that fire and rehire dismissal will be automatically unfair unless evidence of financial difficulties can be produced and the need to make contractual changes is demonstrated to be unavoidable.
Equality
As anticipated, the Bill provides for the duty to prevent sexual harassment in the workplace to require employers to take "all" reasonable steps to prevent such harassment. It also introduces protection from harassment by third parties. For these purposes the definition of a third party is "a person other than the employer or a fellow employee" and the duty extends to harassment based on all the protected characteristics other than pregnancy and maternity and marriage and civil partnership. Separately, the Bill also provides for sexual harassment allegations to be included under whistleblowing legislation.
The absence of mandatory action plans when reporting gender pay gaps is something that has been criticised since the reporting obligation was introduced. The Bill seeks to address this by requiring larger employers to create action plans on addressing their gender pay gaps rather than simply recording what the gap is. Larger employers are also to be required to create action plans on supporting employees through menopause.
Fair Work Agency
The Bill also sets in motion the creation of a new Fair Work Agency that will bring together existing Government enforcement bodies. The stated aim of the Agency is to give people a recognisable single source of help while also supporting employers and taking "tough action" against employers who do not comply with their legal obligations.
What else is included?
As expected, the Bill also repeals anti-union legislation including the Minimum Service Level (Strikes) Act. Other changes intend to give unions "greater freedom to organise, represent and negotiate on behalf of workers", allow unions easier access to workplaces and require employers to provide information about the right to join a trade union when providing a written statement of terms and conditions. The need to account for the cost of living when setting Minimum Wage ("NMW") levels and the removal of the NMW age bands are also provided for. Rules on collective redundancies are to be amended so the trigger point for collective consultation taking place will be 20 or more redundancies within the business as a whole rather than within one establishment.
Anything missing?
Given the volume of changes proposed by the Labour party prior to the election, there are of course some pledges that have not been implemented via the Bill including the proposed statutory right to switch off and proposals to simplify employment status. However, the accompanying Next Steps to Make Work Pay document provides further detail on the UK Government's future plans. Both the right to switch off and the move towards a single status of worker and a simpler two-part framework for employment status are included there. This document also includes proposals to review the parental leave and carers leave system and a commitment to make ethnicity and disability pay gap reporting mandatory for large employers.
What happens next?
The Bill being published is just the first step in the process of it becoming law. It will require to pass through the House of Commons and the House of Lords and although the Labour party has a significant majority in the House of Commons, the same cannot be said in the House of Lords. We can expect time to be spent on consultations, the production of related Codes of Practice and secondary legislation being used to bring many of the provisions of the Bill into force. All in all, with the exception of the repeal of some union related legislation it is likely that many of these new rights will not take effect in the workplace until 2026. However, employers who want to be involved in shaping these laws should engage with consultations as and when they are published.
This article is only intended to provide an outline of the new rights provided under the Bill. Look out for our next Employment Law Ebulletin which will provide a more in depth look at this new legislation.
