The Employment Right Bill – Key Measures

The long-awaited Employment Rights Bill has been introduced into parliament this month. It stretches to 158 pages.

Whilst it might be the biggest upgrade to workers’ rights in a generation, and a significant step towards delivering the Government’s plan to make work pay, most of the planned changes are unlikely to take effect for two years to allow a period of consultation.

The Employment Rights Bill will ban exploitative zero-hours contracts, end fire and rehire, and introduce basic employment rights from day one – like paternity and parental leave, and protection from unfair dismissal. It also introduces right to bereavement leave from day one.

The protection for unfair dismissal, will be accompanied by a statutory probation period of up to nine months (despite a previous suggestion of six months) for new hires, during which staff can be dismissed under a ‘lighter touch’ process. It is a big change from the existing two-year qualifying period.  As this Bill is subject to a series of consultations, the nine-month proposal could yet change.

Key Changes Introduced by the Employment Rights Bill

The Employment Rights Bill proposes several landmark changes, including:

Statutory Sick Pay from Day One

The right to statutory sick pay from the first day of illness, ending the current three-day waiting period, and removing the lower earnings limit of £123 per week. Currently, statutory sick pay is paid for up to 28 weeks at the rate of £1116.75;

Day-One Rights for Paternity and Bereavement Leave

Currently fathers have to be employed for 26 or 52 weeks respectively to receive the benefits, and there will be a new statutory right to bereavement leave;

Employer Duty to Prevent Sexual Harassment

A duty requiring employers to take “all reasonable steps” to prevent sexual harassment, rather than just “reasonable steps”. It will also make employers responsible for protecting workers against harassment by third parties, a measure which was removed from the Worker Protection Act 2023.

Right to Flexible Working by Default

This change reflects the post pandemic emphasis on work life balance and acknowledges the growing demand for adaptable working arrangements. Where employers say no they will have to demonstrate the decision is reasonable against a list of specified grounds for refusal, similar to those that currently exist. Employers may need to gather more objective documentary evidence in order to refuse a request. Flexible working includes but not limited to compressed hour, flexible start and finish times and working from home.

Protections Against Unfair Dismissal for Contract Variations

It will be automatically unfair to dismiss an employee for refusing a contract variation but would still be lawful where an employer is at risk of financial collapse;

Ban on Exploitative Zero-Hours Contracts

Workers on zero or short-hours contracts will have to be offered a contract based on the hours worked in a 12-week reference period, receive notice of shift patterns and entitlement to payment for short-notice cancellation. Research shows 84% of zero hours workers would rather have guaranteed hours. Workers who prefer having a zero-hours contract will be able to remain on those terms if they want to;

Sexual Harassment as a Protected Disclosure

Allegations of sexual harassment will be covered as a protected disclosure;

Changes to Collective Redundancy Consultation

Consultation will be required when 20 employees are affected now across the whole business rather than just at one establishment.

Exclusions from the Bill

Among the measures excluded from the bill is the introduction of a single category of worker. Currently there are broadly three categories – employee, worker and self-employed. The difference is significant, as workers are entitled to basic employment rights such as holiday pay, minimum wage while independent contractors are not. Notwithstanding, Uber BV v Aslam [2021], many gig-economy providers still seek to classifying workers as self-employed, denying them access to sick pay and other benefits.

The “right to switch off”, which would have prevented employers contacting staff outside working hours, has also been left out, and will instead be subject to an agreed code of conduct.

There is no reference to a requirement for large employers to report their ethnicity and disability pay gap.

Timeline for Implementation

Whilst some of the changes may come into effect soon after the Bill has been enacted (sometime next year), the majority of the planned changes are unlikely to take effect until 2026. Employers will therefore have time to take stock and work out what these reforms will really mean for their business. Proactive employers may however wish to carry out an audit to assesses which policies and contractual terms they may need to keep under review and update in due course.

For more information

To ensure compliance with these upcoming changes, employers are advised to review and update their policies and procedures where necessary. It is also crucial that HR teams and line managers are informed of the new regulations and provided with appropriate training. If you require further information about these changes or wish to discuss any employment-related matters, please do not hesitate to contact our Employment team on 01708 511 000.