The Employment Rights Bill: what do employers need to know?

The wait is finally over: the first draft of the Employment Rights Bill and the Next Steps to Make Work Pay policy paper have been published.  

What do employers need to get to grips with first?

Timeframe

• It is anticipated that consultation on the proposed reforms in the Bill will start in 2025 and that the majority of changes to the law will not come into force before 2026.

• The changes to unfair dismissal protections will not come into force before Autumn 2026. Until then, the current qualifying two year period will apply.

• In the meantime, other changes to guidance and practice outside of the law will be dealt with separately via existing powers and non-legislative routes from “autumn 2024 onwards”.  Therefore, we can probably expect updates in the near future about:
  • taking forward the “Right to Switch Off”;
  • the commitment to tightening the ban on unpaid internships;
  • progressing the commitments on paid travel time;
  • removing the age bands to ensure every adult worker benefits from a genuine living wage;
  • supporting workers with a terminal illness through the Dying to Work Charter;
  • modernising health and safety guidance;
  • enacting the socioeconomic duty;
  • ensuring the Public Sector Equality Duty provisions cover all parties exercising public functions;
  • developing menopause guidance for employers and guidance on health and wellbeing.

Key employment law reforms in the Bill

• Unfair dismissal: the two-year qualifying period will be reduced to make unfair dismissal a “day one” right. However, probation periods can be set (of up to six or more likely nine months) with a “lighter touch” process for employers to follow if they wish to dismiss during this period.

• Other “day one” rights: entitlement to paternity leave, unpaid parental leave, establishing bereavement leave, statutory sick pay (ending the three-day waiting period currently specified in the legislation).

• Establishing the Fair Work Agency –
  • to take action against employers who deliberately flout the law.
  • to bring together existing enforcement functions, including:
    • minimum wage and statutory sick pay enforcement
    • the employment tribunal penalty scheme
    • labour exploitation and modern slavery
  • to introduce the enforcement of holiday pay policy.
• Flexible working – the employer may only refuse a flexible working request if it’s reasonable to do so based on the grounds that are already applicable.
• Zero hours contracts: introduction of the right to a guaranteed hours contract which reflects the hours eligible workers regularly work over a reference period.

However, the policy paper does also state “Those who are offered guaranteed hours will be able to remain on zero hours contracts if they wish.”

• Fire and re-hire – where employees are fired for refusing to agree to a change in their contract of employment, those dismissals will be treated as automatically unfair unless the employer can evidence financial difficulties and demonstrate the need to make the change was unavoidable.
• Collective redundancy – consultation obligations to apply regardless of whether they are taking place at “one establishment” or across several. 
• Trade unions – comprehensive changes but in summary: Employers to confirm in writing to employees their right to join a trade union, improved access to the workplace for specified “access purposes”, simplification of the union recognition process as follows:
  • Removing the requirement at the application stage for a union to demonstrate that there is likely to be majority support for trade union recognition;
  • Removing the 40% support threshold at the recognition ballot stage.
  • Consulting on reducing the 10% application threshold for the Central Arbitration Committee to accept a TU recognition case.
• Sexual harassment – strengthening the forthcoming duty to prevent sexual harassment by requiring that “all” reasonable steps must be taken by an employer to prevent sexual harassment in the workplace, including by third parties, with regulations to specify what constitutes “reasonable steps”.
• Pregnant workers – making it unlawful to dismiss them within 6 months of their return to work except in specific circumstances.
• Gender pay gap and menopause action – larger employers (250+ employees) to produce action plans on how to address their gender pay gaps and on how they will support employees through the menopause.

Future delivery of reforms acknowledged as taking “longer to undertake and implement”

Other potential reforms which have been discussed have not been included in the bill and will be dealt with separately:

• Single worker status.
• Raising collective grievances.
• Review of the parental leave system.
• Carer’s leave.
• Strengthen protections for the self-employed through a right to written contract; extending blacklisting protections and extending health and safety protections.
• Surveillance technologies and negotiations with trade unions and staff representatives.
• Potential reforms to the TUPE Regulations.
• Health and Safety guidance and regulations.
• Social value in contract design, public procurement and proportionate public interest tests.
• Extension of the Freedom of Information Act to private companies that hold public contracts and extend the Freedom of Information Act to publicly funded employers.

We will continue to digest all of the documentation and will provide further analysis via HRLaw in due course.

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