It’s finally here! The new Labour government promised to introduce legislation to reform employment rights within 100 days of taking power and lo and behold they have published the Employment Rights Bill along with a Next Steps paper to explain how they’re planning to fulfil their manifesto promise to ‘Make Work Pay’.
The Bill is extensive, and touches on a lot of areas of employment law, however importantly it is not expected that the majority of these changes will come into place before 2026.
The largest swathe of legislative changes relate (expectedly) to Trade Unions and therefore boosts collective rights. These changes require employers to inform their employees within their contract (or written statement of employment particulars) that they may join a trade union as well as repealing previous legislation restricting strikes due to service levels and allowing electronic balloting. These rules will make it easier for trade unions to access workplaces and take industrial action in the face of disputes and simplifies the recognition process.
It is expected that these changes may be made more quickly.
The other changes proposed need a lot more detail before businesses can start to make plans, but it’s worth noting what is on the horizon:
Unfair dismissal will become a day 1 right.
The two-year qualifying period to claim unfair dismissal (other than discrimination or whistleblowing) starting will be removed and employees will have this right from the day the contract begins. It’s expected that there will be a 9-month initial probationary period during which an employee can be fairly dismissed for poor performance, misconduct, capability or some other substantial reason relate to the employee with a short process, to be determined. This 9-month period isn’t expected to apply to redundancy though, so consultation would still be needed.
Collective redundancy thresholds will be considered across the whole entity, not each establishment.
Current case law requires that employers making 20 or more redundancies in one establishment within 90 days must collectively consult, however they would not need to if they had less than 20 in each establishment being consulted with. The Bill takes the opposite course of action and states that separate establishments should not be treated separately, rather 20 or more across the whole business will require collective consultation
Fire and Rehire will become automatically unfair
It will be unlawful to dismiss an employee because they refused to sign a variation of contract from their employer, or to enable the employer to recruit the role under new terms. There are some very limited circumstances in which fire and rehire would be lawful included within the proposed Bill, in cases where the business would otherwise collapse, but it is likely to be very difficult to succeed in this defence.
Zero and low hours contracts rights will change
There have also been some changes proposed to zero hours and low hours contracts whereby it is proposed that a worker must be offered a ‘guaranteed hours contract’ which reflects the pattern they have worked over a certain reference period. Not offering this could result in a tribunal claim to cover financial losses to the workers of not being on a fixed hours contract.
As well as this, the Bill would specify what notice must be given to zero hours workers for a shift and the right to reasonable notice of a shift is cancelled or changed. It’s not yet clear what timeframe constitute reasonable.
Statutory Sick Pay (SSP) will be extended
Statutory sick pay will start from day 1 of sickness and the lower earnings threshold will be removed. It is possible that this reform will happen more quickly than 2026.
Further protection from 3rd party harassment
Currently, employers are not liable for 3rd party harassment of their staff except in cases of third-party sexual harassment which only becomes law this month. The new Bill makes employers liable for any harassment of their employees by third parties unless they have taken all reasonable steps to prevent this, similarly to the new legislation on sexual harassment. All reasonable steps might mean risk assessments, policies and procedures for reporting harassment etc. but the exact criteria are not yet established, and it may be left up to case law to determine.
Paternity, Parental and Bereavement Leave will be extended
Under the Bill, paternity leave (2 weeks leave for a new baby, paid at statutory paternity pay) and parental leave (18 weeks unpaid leave to be taken up to the child’s 18th birthday) will become day one rights, rather than having a qualifying length of service.
Parental Bereavement leave is currently 2 weeks paid leave (at the statutory pay rate) in the event of the death of a child or stillbirth. This will be extended to all bereavement for 1 week however it isn’t clear what limits there will be on the relationship with the deceased, i.e. if they must have been a family member or dependent etc.
Further review was also expected of carer’s leave and other parental leaves; however, this has not been included at this time.
Further protections for new mothers
Additional protection for new mothers will be added to the current protections in place against dismissal of pregnant employees or those on maternity leave for reasons related to pregnancy. It’s not clear what length of time the additional protection will be for.
Gender Pay Gap Reporting
Employers with over 250 staff will need to have stronger action plans on tackling the gender pay gap in their organisation and to support employees going through menopause. There will be a new requirement on employers to identify contract workers when publishing their gender pay reports.
It was also expected that there would be ethnicity and disability pay gap reporting, however it is now expected that these will follow in due course.
Strengthening of Flexible working legislation
Flexible working is mentioned in the Bill; however, it is still unclear what the changes may be as the wording of the Bill doesn’t provide for anything additional to what is already in flexible working legislation other than the requirement for refusal to be ‘reasonable’.
Other than those already mentioned, there were a couple of obvious omissions from the new Bill which were expected – notably the Right to switch off and a review, and simplification, of worker status. It remains to be seen whether these will be added later on.
As it’s expected that these changes will be consulted on and not brought into law before 2026, there aren’t any significant actions that employers can take now – but if you have concerns or would like more details on any specific elements of the Bill, the HR Overload team are here to help you.
Get in touch to see how we could help you.
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