The new Employment Rights Bill: what employers need to know
In this first in a series of posts focusing on the new Employment Rights Bill, Andrew Davidson provides an overview of the bill as published.
During its election campaign, Labour promised to legislate on its “make work pay” plan within 100 days of the general election.
Yesterday, 97 days after being elected, the government fulfilled this promise by publishing an extensive package of reforms to workers’ rights through the Employment Rights Bill. This has been billed as the biggest overhaul to employment law in a generation and the potential impact on all aspects of employment is very substantial.
The bill includes 28 individual employment law reforms, including measures on zero hours contracts, fire and rehire practices, and reducing qualifying periods to increase “day one” employment rights. However, bringing in so many reforms at once leaves many details unclear and there has already been significant pushback from business concerned that these changes could make it economically challenging to operate. Ultimately, while the proposals are now being laid out in more detail, the practical impact on both employers and employees cannot yet be fully assessed.
Alongside the legislation, the government has published a “next steps” document providing more details on the Employment Rights Bill and outlining proposed future reforms, including:
- A “right to switch off” for employees
- A commitment to end pay discrimination by making it mandatory for large employers to publish their ethnicity and disability pay gaps
- A move towards a single status of “worker” to include employees and workers, and
- A review of the systems of parental leave and carers leave
What are the key proposals in the Employment Rights Bill?
The proposed measures include:
Day One Rights for Employees
Protection from unfair dismissal will become a right from the first day of employment. To address business on this point there will be a period during which it will be easier to justify dismissal. They are consulting on their preferred option of allowing for a 9 month probationary period in this regard.
Fire and Rehire
Dismissing an employee for refusing a contract variation will be automatically unfair, aimed at curbing fire and rehire practices. There will be a limited exception where restructuring is necessary to remain viable but it is not yet clear how this will be defined.
Zero hours contracts
Workers will have the right to a guaranteed hours contract based on a 12 week reference period, reasonable notice of shifts, and payment for shifts cancelled at short notice. The proposals also include tightening the ban on exclusivity clauses already in force.
Flexible working
This will become “the default” for all workers, from day one, with employers required to approve requests unless they can prove it is unreasonable.
Sick pay
Removal of the waiting period and earnings limits for a worker’s entitlement to Statutory Sick Pay.
Family friendly changes
Alongside a new right to bereavement leave, paternity and parental leave will become “day one” rights.
Fair Work Agency
Creation of a new employment law enforcement agency though its powers are yet to be determined
Trade union and collective Rights
The bill repeals recent legislation which restricted industrial action (e.g. minimum service levels), provides a new right of access for unions to workplaces, simplifies the statutory trade union recognition process and allows for electronic balloting
Adult social care sector
The proposal is to introduce a new Framework for “Fair Pay Agreements” in adult social care sector
Is there going to be an immediate impact?
The short answer is no. Most of the changes set out in the Bill, once it has received parliamentary approval, require secondary legislation and some will require consultation before implementation. In many cases this is likely to take around two years.
What should employers do now?
Employers should ensure that they are familiar with the proposed measures in the bill and we recommend that employers read the “next steps” document now to prepare.
Watch this space also for our further updates as these changes progress.
Contact us
Andrew Davidson is the head of our national employment team. If you have any questions or concerns relating to the topics discussed in this article or have an employment law question we can help you with, get in touch with us today.