Employment Rights Bill – published but unlikely to be in force until 2026

Date updated: Thursday 10th October 2024

As predicted, the Employment Rights Bill (the Bill) was laid before parliament on Thursday 10 October 2024, in line with the Labour Government’s commitment to introduce such legislation within 100 days of taking power.

The Department for Business and Trade’s press release states that the reforms will “help deliver economic security and growth to businesses, workers and communities across the UK”, and describes the approach as “pro-business, pro-worker”.

The Bill contains primary legislation required to deliver some of the proposals set out in Labour’s ‘Plan to Make Work Pay’, including 28 individual employment law reforms which the Government say will give unions and workers “stronger rights to redress the power imbalance in the workplace”.

The Bill is over 150 pages long and we are currently analysing it in detail. In summary, the key measures include:

Unfair dismissal will be a day one right. Currently, employees need two years’ service to submit a claim of ordinary unfair dismissal, but this qualifying period will be removed. The Government will consult on a new statutory probation period (which they have labelled as an “initial period of employment”) for new hires, where an employee’s suitability for the role will be assessed. It is suggested by the BBC that the initial period of employment may be nine months. Existing day one rights, such as the right to not be unfairly dismissed for whistleblowing and discrimination, will remain. This is a radical change to the law; the shortest service requirement since the right to not be unfairly dismissed was introduced just over 50 years ago, has been six months.
Restrictions will be placed on fire and re-hire dismissals – dismissal of an employee for refusing a contract variation will be automatically unfair, unless the employer can show that the reason for the change to the employee’s contract was to prevent serious financial difficulties which would impact on employer’s ability to carry on the business as a going concern, and the variation could not be reasonably avoided. This is a very limited exception and requires consultation, including with trade unions.
Collective redundancy consultation – employers will need to count all staff across all locations when assessing whether the trigger point for collective consultation has been reached. Currently, the obligation for collective consultation bites where there will be 20 dismissals within 90 days at one establishment.
Enhanced protection from dismissal – employees will get enhanced protection from dismissal while pregnant, on maternity leave and within six months of returning to work after such leave, except in specific circumstances. There is also provision for enhanced protection from dismissal following a period of statutory family leave.

The Government intends to end what they term “exploitative zero hours contracts”.
The Workers (Predictable Terms and Conditions) Act 2023 will be repealed.
Those engaged on zero or low hours contracts will gain the right to: reasonable notice of shifts; payment for cancelled, moved and curtailed shifts; and the right to a guaranteed hours contract if they work regular hours over a defined period.

The right to request flexible working will be amended. On a first read of the Bill, the changes are not significant. The key change is that, where an employer refuses a request for flexible working, it must specify the statutory grounds it relies upon and explain why it is reasonable for the employer to refuse the request on those grounds.

The Government will re-establish the School Support Staff Negotiating Body (SSSNB) in order to provide a negotiating body exclusively for school support staff, which will replace the National Joint Council in negotiations. The SSSNB will be tasked with introducing a national terms and conditions handbook. We understand that it is intended that the provisions will apply to all state maintained schools, including academies, and note that ‘support staff’ is broadly defined. This will curtail the freedoms of academies to determine pay and conditions for most support staff, and we understand that the Government intends to consult before publishing secondary legislation to further define the remit of the SSSNB and support staff in academies in particular.

The law on minimum service levels for strikes (relevant to sectors such as education, transport, health, and fire and rescue) which was introduced by the previous government, will be repealed.
The process for statutory recognition of trade unions to be simplified and thresholds may be lowered.
The right for trade unions to access workplaces (in a regulated manner, on appropriate notice) will be introduced.
The obligation to notify workers in writing (in the s.1 statement) of their right to join a trade union.
Additional protections and rights for trade union representatives.
Changes to balloting for industrial action and picketing.
Workers shall be protected against detriment for taking part in industrial action.
Requirement for unions to give notice of industrial action reduced to seven days.
Ballot thresholds imposed under the Trade Union Act 2016 shall be repealed, namely: (i) 50% turnout requirement, and (ii) 40% support requirement in important public services.
Reduced requirement of what unions must include on voting papers and information to be given to members of ballot results.

Employees will have the right to unpaid parental leave from day one.
Employees will have the right to paternity leave from day one.
As set out above, there will be additional protection against dismissal for new and expectant mothers.
A right to bereavement leave will be introduced – this replaces parental bereavement leave.

Employers will need to take all reasonable steps to prevent the sexual harassment of their workers (currently the requirement is to take “reasonable steps”). Regulations may be introduced, specifying steps that are to be regarded as reasonable (such as carrying out risk assessments, publishing plans and policies, steps relating to reporting sexual harassment and handling complaints of sexual harassment).
Employers must take all reasonable steps to prevent a third party sexually harassing their employees (this is already in the EHRC guidance, but not in the current legislation).
Disclosures relating to sexual harassment will be “protected disclosures” for whistleblowing purposes.

Menopause action plan will be required for employers with 250+ employees.
Gender equality action plan may be required for employers with 250+ employees.
Removal of the current three-day waiting period and a change to the lower earnings limit for statutory sick pay.

A new state enforcement agency, the Fair Work Agency, will be established. It will have extensive powers to inspect workplaces and enforce compliance with employment law.

In addition to the legislation the Government has published, a ‘Next Steps to Make Work Pay’ document, which sets out the proposed time scales for the Employment Rights Bill and outlines the Government’s other plans for reforms which, subject to consultation, include the following:

The National Minimum Wage will be linked to the cost of living and age bands will be removed. The Government has already taken steps to achieve this.
Banning unpaid internships, except where they are part of an education or training course.
A right to switch off (this would prevent employees from being contacted out of hours, except in exceptional circumstances). This will be delivered via a statutory code of practice.
A commitment to end pay discrimination by expanding the Equality (Race and Disparity) Bill to make it mandatory for large employers to report their ethnicity and disability pay gap – due to be published in “autumn 2024 onwards”.
A move towards a single status of worker and a transition towards a two-part framework for employment status (self-employed or worker).
A review of the parental leave and carer leave system.
A Dying to Work Charter, supporting workers with a terminal illness.
An examination of TUPE regulations and practices.
Consultation with Acas regarding enabling employees to collectively raise grievances.
A commitment to paid travel time in sectors with multiple working sites.

Next steps

The above proposals are not included in the Employment Rights Bill – in some cases (such as the changes to National Minimum Wage age bands and the banning of unpaid internships) this is because powers already exist to enable the Government to deliver reforms. For other proposals, such as the ‘right to switch off’, the change is being made through a non-legislative route. As such, these changes may be made sooner.

Although the Employment Rights Bill includes radical proposals, described by Labour as a “once-in-a-generation” reform, the Bill will now need to progress through the two houses of Parliament before it is made law. MPs will consider the Bill at second reading on Monday 21 October 2024. A limited number of targeted consultations will be published in 2025, to inform the Government’s next steps. Further detail on the policies within the Bill will be provided through secondary legislation (regulations) and, in some cases, codes of practice. The Government has stated that the majority of reforms will take effect no earlier than 2026. Reforms of unfair dismissal (which is perhaps the measure causing most concern for employers currently) will not come into effect until autumn 2026 at the earliest. As such, employers will have time to review policies and working practices to prepare for the changes ahead.

For now, we recommend that employers review their current recruitment processes, including the use of probationary period clauses in employment contracts. In light of the upcoming changes to the right to not be unfairly dismissed, it will be paramount for employers to ensure that a rigorous recruitment process is followed; this could include skills-based assessments as well as interviews against an assessment criterion, and should certainly include receipt of satisfactory references. It would also be prudent to review capability and disciplinary procedures to ensure that they are Acas-compliant and straightforward to follow.

We anticipate that the reforms will lead to a significant increase in employment tribunal claims. If employers do not have insurance for employment tribunal claims, then this may be worth exploring now.

We will keep you updated on further developments and will be running webinars on the Employment Rights Bill in the coming week. You can register for our first webinar, which will be taking place on Friday 18th October, which will provide a practical update on the new Bill.