Introducing an Employment Rights Bill within 100 days of taking office was one of the Labour government’s core pledges. The Bill was published today and includes many, but not all, of the policies in the “Plan to Make Work Pay” document produced before the general election.
From an employer’s perspective the key takeaway at this stage is “could have been worse”, especially in relation to the decision to make unfair dismissal a day one right. In addition, some of the most significant changes are not expected to take effect for at least two years, giving employers further time to prepare.
The Employment Rights Bill represents the most significant change to employment law for many years. The government is trumpeting 28 separate measures to improve employee rights, covering a wide range of policy areas.
However, we are still waiting for much of the detail about how the changes will operate in practice. There will be further consultations on a range of issues. In addition, many of the changes will not come into force until 2026.
What’s in the Bill?
The key measures in the Bill include:
- Day one protection against unfair dismissal. There will be a statutory probationary period, suggested as nine months, during which employers will be able to follow a “lighter touch” process to dismiss someone fairly for performance reasons. The government will consult on how that process should operate and the changes will not happen until Autumn 2026 at the earliest.
- Day one rights to paternity and unpaid parental leave. Statutory sick pay will be payable from day one of an absence, removing the current three day waiting period. Employees will not need to have wages above the lower earnings limit to qualify for sick pay.
- Introducing bereavement leave as a day one right.
- Making flexible working the default, so employers will have to agree to flexible working requests unless they can show that their refusal is reasonable.
- Giving pregnant employees, and those on or who have recently returned to work from maternity leave more protection against dismissal, by making it unlawful to dismiss them other than in specific circumstances.
- Requiring large employers with 250 or more employees to have action plans to address their gender pay gaps and to support employees during the menopause.
- Ensuring that workers on zero or low hour contracts can have a contract reflecting their regular hours over a defined period.
- Closing “loopholes” permitting fire and re-hire/ fire and replace by making such dismissals automatically unfair in some circumstances and consulting on removing the current cap on protective awards if collective redundancy processes are not followed.
- Strengthening protection against sexual harassment by requiring employers to take “all” reasonable steps to prevent such harassment, prohibiting third party harassment and extending whistleblowing protection to cover disclosures about sexual harassment.
- Repealing trade union legislation relating to minimum service levels and the tougher rules on strike ballots introduced in 2016, as well as simplifying the statutory recognition process and introducing a new right for trade union officials to access workplaces.
- Creating a “Fair Work Agency” (sometimes referred to as a single enforcement body), to enforce rights such as holiday pay, the minimum wage and statutory sick pay.
And what isn’t?
Not everything in the Make Work Pay plan has made it into the legislation. The government has also published a “Next Steps” document outlining reforms that will be taken forward in the future, subject to consultation. These include:
- A right to switch off;
- Mandatory ethnicity and disability pay gap reporting;
- A move towards a single worker status, removing the current distinction between employees and workers; and
- Reviewing existing parental and carer’s leave frameworks, in particular in relation to whether carer’s leave should be paid.
Next steps
The Bill will now make its way through Parliament. It has been reported that it is not expected to receive Royal Assent until the middle of next year. As noted, there will be further consultations on the detail of how many of the new rights will operate in practice during 2025 and the government has confirmed that the majority of the new rights will not be in force before 2026.
Employers should identify which aspects of the Bill are most relevant to their business and prepare to engage with government during future consultation exercises. In the meantime, they will be relieved that changes are still some way down the track and that the government has recognised the need for flexibility to dismiss for capability related reasons in the initial stages of someone’s employment.
[View source.]
