Key Changes to Expect Following the Employment Rights Bill

Key Changes to Expect Following the Employment Rights Bill

On 10^th October 2024, the Labour Government announced its much-anticipated Employment Rights Bill, which is aimed at enhancing workers’ rights in the UK. This Bill is a part of Labour’s broader agenda to implement their “Plan to make work pay: Delivering a new deal for working people,” which was a key component of their 2024 manifesto.

The Employment Rights Bill includes several transformative measures. Key provisions include:

• employees will have protection from unfair dismissal from day 1, but the Government will launch a consultation on allowing ‘lighter touch’ dismissal during probationary periods of up to 9 months. It is anticipated that a ‘lighter touch’ will include some sort of basic procedure prior to dismissal;

• exploitative zero-hour contracts will be banned, with workers given a right to request guaranteed hours, receive reasonable notice of shifts and be paid for shifts cancelled at short notice;

• the practice of ‘fire and re-hire’ will be banned and dismissals for refusing a contract change will be automatically unfair. There will be limited exceptions, such as where there is a genuine business need to avoid serious financial hardship and thorough consultation has taken place;

• employers will have full liability for harassment by third parties;

• an employer’s refusal of a flexible working request will also have to be reasonable, in addition to the current requirement that the reason be from a limited list of specified grounds. Employers will also be required to explain in writing to the employee why the employer believes the refusal is reasonable;

• employees will receive Statutory Sick Pay from day 1 (currently SSP kicks in from day 4);

• all employees will be entitled to bereavement leave, not just parents;

• allegations of sexual harassment will be considered to be a protected disclosure under whistleblowing legislation;

• contracts of employment will be required to include statements of union rights;

• collective redundancy consultation to apply to 20 or more across the business, not just in one establishment;

• paid paternity leave and unpaid parental leave will be available from day 1; and

• a new enforcement agency, the Fair Work Agency, will enforce certain rights, such as holiday pay.

The Bill does not include a number of other proposed changes which Labour had previously indicated it would introduce. However, the Government has committed implement these changes in future legislation. These ‘future changes’ include:

• ethnicity and disability pay gap reporting (similar to the current gender pay gap reporting requirements) for larger employers;

• a review of parental and carer leave provisions, to explore ways to enhance support for working parents;

• a ‘right to switch off’, governing when employers can (and, more importantly, cannot) contact employees out of hours; and

• introducing a single ‘worker’ status to remove the distinction between employees and workers.

The impact of these changes on employers has the potential to be significant. Employers will need to review and potentially overhaul their employment contracts and policies to ensure compliance with the new requirements. For instance, the shift to making flexible working the default will necessitate changes in how work is structured and managed. Employers should also prepare for the increased administrative burden associated with the expanded rights to sick pay and parental leave from day one of employment.

It seems likely that day 1 unfair dismissal protection will have the biggest day-to-day impact. It will mean that many employers will need to become better at managing workplace issues, such as probationary periods, performance issues and attendance problems. This will likely also mean that they will need to be better at training their managers on how to deal with a wide range of workplace issues.

To mitigate potential disruptions and ensure a smooth transition, employers should start by conducting a comprehensive assessment of their current employment practices. Engaging with legal advisors to understand the full implications of the new legislation and developing a compliance strategy will also be crucial.

The good news is that employers will have time to take the steps required to ensure their business remains compliant. This is because it is likely that most changes won’t take effect until the middle of 2026 at the earliest.

If you have any questions about the Employment Rights Bill or how your business can prepare for the forthcoming changes, please do not hesitate to get in touch with us on 0161 926 9969 or emploiyment@mlplaw.co.uk.