The Employment Rights Bill – what Charities need to know

The current rules of unfair dismissal mean that an employee must have at least two years’ continuous service before they can bring an unfair dismissal claim. There are currently various exceptions to this two year requirement, including for whistleblowing and discrimination claims. 

Under the draft legislation, all employees will have the right to claim unfair dismissal from the date they start work. 

The Government have confirmed that employers will still be able to operate probationary periods, and can dismiss fairly by reason of conduct, capability, statutory contravention, and “some other substantial reason”. Any dismissal in the probationary period will be subject to a modified dismissal process, although we don’t have any detail around that yet, save that the Government have said they expect it to be light touch and less onerous. We also don’t know how long the probationary period will be; the Government have suggested nine months, although this is subject to consultation. The Government have also indicated that there may be a limit on the compensation available where an employee is dismissed during their probationary period.

What this means is that an employee can bring an unfair dismissal claim from when they start work, but an employer will be able to defend that claim if they can demonstrate they had a fair reason and followed a fair probationary process. 

Looking forward, it is likely that employers may make their recruitment processes more robust, to include more detailed capability assessments, applying extra scrutiny to references and other regulatory checks, and ensuring that employees don’t actively start work until the employer is satisfied they are suitable. We are also likely to see development of more detailed probationary processes and policies, to mirror the statutory process, and greater training to line managers in properly managing and documenting performance and conduct during the probationary period. 

The Bill proposes a new right to claim unfair dismissal if an employee is dismissed because of their political opinions or affiliation. This would seem to overlap with existing Equality Act protection for religion and belief. It remains to be seen what impact this is likely to have in practice. 

There is a lack of detail on this change, but in essence the Government is looking to provide greater protection from dismissal during or following a period of family leave, including maternity, adoption and shared parental leave.

Where an employer is proposing to dismiss more than 20 employees at one establishment in a period of 90 days, the collective consultation requirements are engaged. The draft Bill provides that “one establishment” means the whole of the employer’s operations; no longer will “one establishment” mean a single workplace. 

This is likely to affect charities considering redundancy where they operate across multiple sites, as it is more likely that collective consultation will be required. This increases the procedural burden, as well as extending the period for which consultation must take place. 

There is major reform to the “fire and rehire” rules. 

Currently, where an employer is looking to change terms and conditions, if, following a period of consultation, agreement cannot be reached, then they can “fire” and then “rehire” on the new terms of employment. The right to “fire” and “rehire” will be significantly restricted to circumstances where there are financial difficulties that are likely to affect the employer’s ability to carry on business as a going concern in the immediate future.  

Whilst, in practice, we don’t see employers relying on “fire” and “rehire” very often, the significant restrictions are likely to adversely affect the employer’s negotiating position in the event that changes to terms and conditions are necessary. It is important to bear in mind that an employer can still seek to negotiate with staff with a view to changing terms and conditions by agreement.  

Whilst the Government has heralded the changes to flexible working as significant, in practice, the legislation does not support the headlines. 

Currently, an employee has a day one right to request to work flexibly. An employer can reject a request if it can show one of the eight statutory reasons applies. The Bill proposes that an employer will only be able to reject a request if one of the 8 statutory reasons applies and it is reasonable for the employer to reject the request. 

So, arguably, the draft Bill does not really constrain an employer when dealing with flexible working requests, although a new process for dealing with requests will follow under regulations. 

The Bill proposes removing “waiting days” so that SSP is payable on the first day of absence. There will be consultation on the amount of SSP that will be payable. 

Paternity and parental leave will become day one rights, and the current right to parental bereavement leave will be extended to all, not just parents. At this stage, we don’t have the detail of who will benefit from bereavement leave. 

On 26 October 2024, a new duty to take reasonable steps to prevent sexual harassment came into force. The Bill proposes to extend this duty to “all” reasonable steps. The Government has confirmed that regulations will follow to set out what “all reasonable steps” are, but they are likely to include assessments, publishing plans and policies, having processes for reporting sexual harassment, and having steps relating to handling complaints. 

In addition to the reform of sexual harassment rights, the Government also proposes that the Equality Act be amended to make clear that an employer will be liable for any harassment caused by a third party; that protection extends to harassment on the grounds of any protected characteristic. The employer will be under a duty to take all reasonable steps to prevent the third party harassment. 

There is significant ongoing change in this area, and the liability in respect of third parties may be challenging for charities, particularly when those third parties may be beneficiaries where, for a variety of reasons, it is difficult to exert any control over behaviours. Further, it may be difficult to prevent harassment of employees when dealing with the general public, for example as part of fundraising activities. Whilst there is a shift in liability for employers, it is important to remember that the duty only extends to take steps that are reasonable, although what is reasonable is likely to vary from case to case. 

For any charities funded by public authorities, significant change is on the horizon. The Bill proposes amendments to the Procurement Act 2023 to provide that, where services are or were previously performed by the public authority, if those services are outsourced then the staff working on that contract and any new staff recruited to that contract are entitled to the same terms and conditions as if they were employed directly by the public authority. This is likely to significantly impact the viability of outsourced public contracts, given the more generous terms and conditions of public sector employers. 

The draft provisions relating to zero hours contracts are very complex, and subject to consultation and further regulation. However, the headline point is that anyone working on a zero hours contract will have the right to request a minimum guaranteed hours after working for a certain period (yet to be determined).  There will be exceptions for staff recruited for a fixed term, specific task or temporary need. 

On shift work, a worker will be entitled to reasonable notice of shifts, and pay even if the shift is cancelled. 

The changes to zero hour contracts may impact on charities that rely on them due to fluctuating demand for services, for example. At this point we will need to keep an eye on how the legislation develops before looking at whether change is needed to working practices or contracts.

Get in touch with Stone King’s Employment Team for more information on the Employment Bill and how it might affect your charity.