Welcome back to our monthly briefing for HR teams and in-house employment counsel – bringing you this month's employment law highlights in an easy-to-read package. We're focusing this month's update to the much-anticipated Employment Rights Bill, introduced in Parliament on 10 October.
Employment Rights Bill – all change
The new Government has promised to introduce its flagship employment reform programme in its first 100 days and, while the Employment Rights Bill was indeed presented to Parliament on time, most of the far-reaching changes to the UK employment law regime that it heralds will take much longer to come into effect. That is to be welcomed, as it signals a commitment to consultation that should be the hallmark of workable legislation. Links to the consultations that have already been commenced are below.
Other changes, flagged in the pre-election "New Deal" policy paper, have not made their way into the Bill, and will need to be developed in other ways. Importantly, those include the right to switch off, mandatory ethnicity and disability pay gap reporting, harmonising the national minimum wage age bands, and developing menopause guidance, TUPE reform, and looking at whether the tripartite categorisation of employee, worker and self-employed is fit for purpose.
Although the Bill contains important reforms affecting trade unions and collective matters, this briefing focuses on the items all employers – unionised and not – will need to grapple with in the coming months.
Unfair dismissal
Perhaps the most widely-trailed reform is the abolition of the qualifying service requirement for unfair dismissal. Although the length of the period has varied over time since the introduction of the unfair dismissal system in the 1970s, some degree of service has been a consistent element. The Bill sweeps that away entirely, so represents a significant change to established practice. The potentially fair reasons for dismissal (incapacity, misconduct, redundancy, illegality and "some other substantial reason") remain in place, as will the requirement for procedural fairness. In order to allow employers a reasonable time to test new hires, however, the Bill also introduces the concept of an initial probationary period, in which the procedural requirements will be streamlined. Regulations will deal with the detail here, both as to the length of the initial probationary period (which the Government's Next Steps document suggests will be nine months) and as to the procedure (which the Next Steps' document states ill be lighter touch). Until those details become clearer, the implications of the new regime for employers is hard to gauge with any degree of certainty. These changes are not anticipated to take effect until Autumn 2026.
Fire and rehire (dismissal and re-engagement)
As we have noted in previous briefings, press and Parliamentary focus on firing and re-hiring has been a key theme over recent years. The Bill seeks to change the dial, making the practice unfair save in very limited circumstances, instead of pleading with employers and stressing that it should be a last resort. The legislative structure is striking: a dismissal because the employee does not agree to a proposed variation of contract is automatically unfair, unless the employer is in such dire straits that it can show the variation was to "eliminate, prevent or significantly reduce, or significantly mitigate" financial difficulties serious enough to be "affecting, or likely in the immediate future to affect, the employer's ability to carry on the business as a going concern". That is a high threshold indeed.
Bereavement, paternity and parental leave
The changes under this heading are more straightforward: the existing arrangements on bereavement are to be strengthened, parental leave and paternity leave are to be made available to all employees regardless of service and paternity leave is to be made more flexible by becoming available before or after shared parental leave,
SSP
Changes to the statutory sick pay regime are equally simple – although potentially costly. At present, SSP is only payable from the fourth day of absence. The Bill alters that, so that it is payable from day one.
Zero-hours contracts
The position is different for the proposed changes to zero-hours contracts, which are extremely complex. The Sunak administration brought forward a plan to give zero-hours and casual workers a new right to request a predictable working pattern. That has been shelved, and replaced by a new right to be offered guaranteed hours where a worker works regular hours over a defined reference period of (probably) 12 weeks. The shift in emphasis from the worker requesting predictability to the employer being required to offer it is stark. Again, much of the detail will come in secondary legislation, which will need road testing to ensure it does not create more problems than it solves. A consultation is already open on the interplay between these new guaranteed hours arrangements and agency workers. The other new right introduced by the Bill is for a payment where a shift is cancelled or moved at short notice. Employers who use zero-hours arrangements will need to ensure that they pay close attention to the final structure here.
Sexual harassment
Employers will know that the new duty to take reasonable steps to prevent sexual harassment in the workplace comes into effect on 26 October. We have described in previous briefings the coverage of the new duty, in particular the difference between taking reasonable steps (the formulation used in the legislation) and all reasonable steps (the original formulation as presented to Parliament). The Bill reintroduces the word "all" to end the semantic debate over whether it mattered in any event. Furthermore, the Bill also makes clear that harassment by third parties is caught, potentially widening the scope of the new duty for many employers.
It is clear the Government wants to make a statement with the Bill, bringing in new protections and strengthening existing ones. It will be interesting to watch both the progress of the Bill through Parliament and, perhaps more importantly, the various consultation processes on the different elements that form this far-reaching 158-page document.
Useful links
- The Bill
- The Government's "Next Steps" document
- The Government's factsheets on the Bill
- Consultation papers on:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
