Overhaul of employment law – Employment Rights Bill 2024

10 October 2024

On 10 October 2024, the draft Employment Rights Bill 2024 (Bill) was laid before Parliament by the government.

The 28 new measures contained in the Bill (some only applying to the public sector) have been dubbed as the most substantial employment law changes for the past 30 years. The government’s aim is to boost pay, productivity and deliver economic security and growth to businesses, workers, and communities across the United Kingdom.  For operators though, it will be an important time to review and adopt potentially quite different procedures and practices in their businesses.

What’s changing?

Below is a summary of what is changing:

• Unfair dismissal will become a day one right, subject to a statutory nine-month probationary period.
• Paternity leave and parental leave will also become day one rights.
• Statutory Sick Pay can be claimed from first day of sickness absence.
• Employers will have less scope to refuse flexible working.
• Sexual harassment rules.
• Right to guaranteed hours contracts for zero and low hours workers who regularly work more hours will be granted.
• ‘Fire and re-hire’ controls will be introduced.
• Redundancy rules.
• Gender pay gap and menopause rules.
• New mothers and pregnant women will have enhanced protections.
• Trade union laws are being amended.

Unfair dismissal

One of the most notable reforms is that employees will benefit from more rights from day one of their employment.  These are known as “day one rights.”

Under the new legislation, employees will be able to bring a claim for unfair dismissal from  day one.  The current two-year qualifying period for unfair dismissal claims is being removed. The government is however, set to consult on a new statutory probation period of nine months, during which employers will have greater flexibility to dismiss. Employers will remain able to dismiss for capability, conduct, illegality or for some other substantial reason.

Parental and bereavement leave

Parental bereavement leave changes to bereavement leave, meaning it is extended to apply to all employees and paternity and parental leave will also become day one rights.

Statutory Sick Pay

The Statutory Pick Pay (‘SSP’) waiting period will be removed, meaning SSP will be payable from the first day of sickness absence instead of the third.

Flexible working

The  changes to flexible working means that it is a day one right and there are stricter rules to follow for employers. Employers will only be able to refuse the request on one of the statutory grounds to do so and only when reasonable. The refusal must be explained, and this must include why the employer considers it reasonable to refuse the application.

Sexual harassment

Notably employers will become liable for third party harassment (not just sexual harassment) in the course of employment, and the duty to take reasonable steps to prevent sexual harassment will become the duty to take all reasonable steps.

Zero hours contracts

The Bill sets out the right for workers on zero-hour contracts to guaranteed hours if they work regular hours over a defined period. The duty will be on the employer to offer the guaranteed hours and workers will be entitled to notice of any change in shifts and will be entitled to compensation for any shifts cancelled or cut short at short notice.

Fire and rehire

Dismissal due to failure to agree to a contract variation (‘fire and rehire’) will be automatically unfair if the reason for the dismissal is to enable the employer to rehire the employee or employ another person under a varied contract of employment which is substantially carrying out the same duties as the employee did prior to the dismissal. We originally thought this would be abolished completely, but that is not the case.

Redundancy

Collective consultation will be required where an employer is proposing to make redundant 20 or more employees across the whole business rather than at a single establishment.

Gender pay gaps and menopause 

Large employers (employers with 250 or more employees) will be required to create action plans on addressing gender pay gaps and support employees through the menopause.

Pregnancy and new mothers

Protections against dismissal has been strengthened for pregnant woman and new mothers. The Bill sets out a ban on dismissal of women who are pregnant, on maternity leave and during the six months after they return to work unless there are specific circumstances.

Trade unions 

The Bill has set out that ‘The Strikes (Minimum Service Levels) Act 2023’ will be repealed, and that the blacklisting legislation will be extended to protect a wider range of people. A worker’s  Section 1 statement (which is a written document that outlines the key terms and conditions of employment between an employer and an employee or worker) must include statements that the worker has the right to join a trade union.

When will the measures come into force?

Changes could still be made to proposals before most of them take effect in two years’ time.  Many measures will be consulted upon next year.  This means that many of the measures are not likely to come into force until Autumn 2026

What’s next?

The government has expressed that a ‘Fair Work Agency’ will bring together existing enforcement bodies who will enforce rights such as holiday pay and support employers looking for guidance on how to comply with the law. This is said to be subject to consultation.

It has also been confirmed in a ‘Next Steps’ document  which you can find here that (subject to consultations) further reforms are likely as follows: the right to switch off aimed to prevent employees from being contacted out of hours; a strong 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; a move towards a single status of worker;  transition towards a simpler two-part framework for employment status; and reviews into the parental leave and carers leave systems.

Please contact the Backhouse Jones employment team here for more information.

This article was written by Gabrielle Scriven and Jo Dawson-Gerrard.