What companies need to know

After the general election, the new government promised to publish its labor law reform proposals within 100 days. With a few days to spare, the long-awaited Employment Rights Bill was published on October 10, 2024.

It’s been described as the biggest upgrade to workplace rights in a generation, and here’s a look at the main proposals.

Unfair dismissal

The proposal to grant unfair dismissal rights on day one is controversial. Currently, two years of employment is required.

There will be a new statutory probationary period. This gives employers time to properly assess someone’s suitability. During that period, employers will be able to take a “lighter and less burdensome approach” to dismissing someone who is not suitable for the job.

The government prefers a statutory probationary period of nine months and will consult on this in 2025. However, the reform of unfair dismissal will not take place until the autumn of 2026.

In certain circumstances, comprehensive protection against unfair dismissal exists from day one, such as dismissals for whistleblowing or for health and safety reasons.

Zero-hour workers

Reportedly, 84% of zero-hour workers would prefer guaranteed hours. If someone works fixed hours for a certain period, they are entitled to a guaranteed hours contract, but employees can continue to work on a zero-hours contract if they wish. They are also entitled to reasonable notice for a service and the right to payment for canceling or changing a service at short notice.

Fire and rehire

The government has said that “ending unscrupulous labor practices is a priority.” This includes ending layoffs and re-entering new employment conditions, which are often less favorable. It will automatically be unfair to dismiss someone who refuses to agree to a change to their contract, except in certain circumstances. For example, if the change ensures that the company can continue while there is “really no alternative”. In many cases this can be difficult to prove.

Supporting working families

Flexible working will be the standard for all employees unless the employer can demonstrate that it was reasonable to decline a request for specific business reasons. There is currently a right to parental leave, and there will be a new general right to bereavement leave. There will also be better protection for pregnant women and new mothers returning to work. Finally, parental leave and paternity leave will become a day-one right. Currently, one year of service and 26 weeks of service are required respectively.

Statutory sick pay

The lower wage limit and the current waiting period of three days before SSP is paid will be abolished, so that SSP is available from the first day of illness.

Protection against harassment

We’ve written about the new duty that comes into effect on October 26, 2024, requiring employers to take reasonable steps to prevent sexual harassment of their employees.

The bill expands this so that employers are obliged to take all reasonable measures. Future legislation may also specify what constitutes reasonable steps, such as publishing plans or policies.

Protection against harassment by third parties, which was removed from the Equality Act 2010 in 2013, will be restored.

Finally, sexual harassment disclosures will count as “qualifying disclosures” for whistleblowing purposes.

Collective dismissal

The obligation to engage in collective consultation arises when twenty or more employees are dismissed ‘at one location’. The bill makes it clear that the obligation applies when the threshold is reached for the entire organization, and not for a specific location.

Equality at work

Large employers (over 250 employees) will need to draw up action plans on how they will tackle the gender pay gap and how they will support employees going through the menopause.

Labor relations

The bill contains numerous provisions, including an obligation for employers to provide employees with a written statement of their right to join a trade union. The government will also repeal the previous government’s trade union legislation, including the controversial (and never used) provisions regarding minimum service levels.

Enforcement

Currently multiple enforcement agencies report to different government departments, but a new Fair Work Agency will combine these.

What happens next?

The bill made no reference to topics such as the right to “switch off” or reporting pay differences across ethnicity and disability. These were set out in a separate document published on the same day, which outlines the government’s longer-term plans.

The second reading of the bill will take place on 21 October 2024. Several consultation exercises will take place throughout 2025 and we can expect a lot of research into the bill in the coming months.

Hannah Waterworth

Hannah Waterworth is an employment lawyer in Blake Morgan’s employment, pensions, benefits and immigration team.