The government has complied with its election promise to introduce employment legislation within 100 days of taking office in the form of the Employment Rights Bill. The Bill sets out a significant and ambitious agenda of employment law reforms, the key aspects of which we set out below.
We expect the majority of the reforms to take effect no earlier than 2026, as secondary legislation will be necessary to implement a number of the provisions. The government has also launched a number of consultations about how some of these reforms will be implemented in practice. There is scope for the Bill to be amended as it works its way through the parliamentary process.
Unfair dismissal rights from day one of employment:
Employees will no longer require at least two years’ service to be eligible to claim unfair dismissal. However, regulations will modify the normal dismissal process for dismissals that occur during a statutory probationary period (an “initial period of employment” likely to be nine months) and which relate to the individual’s conduct or performance. Notably, it appears that employees will have full unfair dismissal rights from day one if the employee is dismissed for other reasons, such as a TUPE transfer or redundancy. Employers will need to follow a full consultation and dismissal process before making employees redundant, even if they have not completed the statutory probationary period.
Employers required to take ALL reasonable steps to prevent sexual harassment:
The new proactive duty on employers coming into force later this month to take reasonable steps to prevent sexual harassment will be extended under the Bill to a requirement to take ALL reasonable steps. The Bill also provides for regulations to specify what constitutes reasonable steps for these purposes, reducing the employer’s discretion. The Bill provides that such steps may include, specifically, the carrying out of risk assessments, publishing certain plans or policies, and taking steps relating to the reporting of sexual harassment and relating to the handling of complaints.
Whistleblowing protection will also be extended to cover disclosures that sexual harassment has occurred, is occurring or is likely to occur.
New stand-alone protection from third party harassment:
Employers will be liable if they permit a third party to harass an employee.
Further undermining of fire and re-hire practices:
An employee will be considered unfairly dismissed for failing to agree to a variation of contract, unless “the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business.” The employer will also have to show that it could not reasonably have avoided the need to make the variation.
Wider application of collective redundancy obligations:
The threshold for the statutory requirement to consult collectively will apply to those dismissed across the employer’s organisation; it will no longer be limited to employees at the establishment in question. This will inevitably result in a far wider application of the collective redundancy requirements, including consultation and the 30 or 45 day moratoriums on dismissals. The same will apply to the trigger for notifying the Secretary of State of proposed dismissals.
The government has launched a consultation seeking views on a proposal to increase the maximum protective award for a failure to inform and consult on collective redundancies from 90 to 180 days or to remove the cap on the protective award entirely.
Greater predictability for those on zero-hours and other casual contracts:
The Bill confirms that the Workers (Predictable Terms and Conditions) Act 2023 will be repealed. However, it provides for qualifying workers to be given the contractual right to guaranteed working hours based on their regular working hours over a reference period, going further than the rights provided under the repealed Act. To the relief of many employers, the Bill caveats this right in the case of inherently short-term contracts or where workers are engaged for a specific task. The government has launched a consultation on the application of these measures to agency workers.
Greater protection for shift workers:
The Bill enshrines the right to reasonable notice of a cancellation or change to a shift, and provides for payment for cancelled, moved or curtailed shifts.
Strengthening of right to request flexible working:
Despite manifesto promises of making flexible working the default position, the Bill simply strengthens the existing right to request flexible working; rather than granting an absolute right to work flexibly. As well as identifying one of the statutory grounds for refusing a request, which remain unchanged, an employer will also have to show that it is reasonable to refuse the request on that ground. Regulations will also set out steps to be taken when consulting with an employee before refusing a request. It remains to be seen the extent to which this will enhance employees’ rights to work flexibly.
Extending right to receive statutory sick pay:
As expected, the Bill removes the three-day waiting period to receive statutory sick pay (SSP) and also removes the lower earnings limit for entitlement. The rate of SSP will be the lower of a specified percentage of weekly earnings or the statutory rate. The government is consulting on an appropriate percentage.
Stricter requirement for policies allocating tips and gratuities:
The Bill expands on the requirements of the recent Code of Practice and non-statutory guidance on the allocation of tips and benefits, introducing a statutory requirement for employers to consult with a recognised trade union or employee representatives before issuing a first draft of the policy. The employer will also be required to publish a summary of the views expressed in the consultation and to conduct regular reviews of their written policy.
Expansion of eligibility to take parental and paternity leave:
The right to take parental leave and paternity leave will be available to eligible employees from their first day of employment, and there will no longer be a requirement to take paternity leave before shared parental leave.
Expansion of eligibility to take bereavement leave:
The Bill expands on current provisions for bereaved parents to take leave, providing that any bereaved person (as defined) may qualify for such leave; and where an employee is eligible to take bereavement leave as the result of the death of more than one person, the employee is entitled to leave in respect of each person.
Greater protection for dismissal during pregnancy:
The Bill provides for regulations that expand existing protection from dismissal during or after a protected period of pregnancy, and following a period of statutory family leave.
Statutory requirement for equality action plans:
Employers with 250 or more employees will need to publish equality action plans showing the steps that the employers are taking in relation to their employees with regard to gender equality, including how they are addressing the gender pay gap and how they are supporting employees going through the menopause.
Right to statement of trade union rights:
The Bill provides a new right for workers to receive a written statement from their employer that they have the right to join a trade union. This statement must be given along with their contract of employment under section 1 of the Employment Rights Act 1996 at the start of employment and at “other prescribed times”.
Trade union access to the workplace:
Currently, trade unions have no general right to enter workplaces to recruit and organise members (subject to limited exceptions). The Bill sets out a new procedure whereby listed trade unions can request access to the workplace by union officials for the purposes of meeting, representing, recruiting or organising workers (whether or not they are members of a trade union) and to facilitate collective bargaining. Such access cannot, however, be for the purpose of organising industrial action.
Amendments to trade union recognition rules:
The Bill will simplify the process for union recognition, both in the initial application stage and at the ballot stage.. These changes are expected to make it easier for unions to secure recognition, particularly in combination with the new rights of access.
Duty to provide accommodation and facilities
The existing statutory rights to time off for various union activities are strengthened by the Bill , which introduces duties to provide ‘such accommodation or facilities as are reasonable in the circumstances’ to undertake those activities.
Lowering strike thresholds
The Bill lowers the ballot requirements for valid strike action making the test a simple majority of these who vote in the ballot, with no requirements for any level of turnout.
Protection from detriment on grounds of industrial action:
The Bill protects workers from being subjected to a detriment by their employer, where the sole or main purpose was to prevent or deter the worker from taking protected industrial action or penalising the worker for doing so. This amendment is in response to a Supreme Court decision earlier this year that held that the absence of such protection was incompatible with the European Convention on Human Rights.
Protection from dismissal extended
Currently, employees can claim unfair dismissal if they are dismissed for taking industrial action at any time within a protected period of 12 weeks after the action began. Under the Bill, this 12-week protected period will be removed, so employees will be protected against dismissal for taking part in industrial action for the full length of the strike action.
Sarah Taylor
Frances Rollin