Employment Rights Bill
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Employment Rights Bill
The media has been closely covering the government’s newly published Employment Rights Bill 2024 (‘the Bill’). Amongst all the reports, discussions and debates, it can be difficult to understand the practical impacts of the Bill on employers, employees and workers alike.
In this edition of the Rix & Kay blog, we cover the key provisions of the Bill and what they mean for you as an employer or employee, on a practical level.
At this stage, many of the provisions are entering consultation. This means the final new Employment Rights Act could look somewhat different to the current Bill.
Unfair Dismissal & Statutory Probationary Period
Under existing employment legislation, subject to important exceptions, employees are prevented from bringing a claim of ‘Unfair Dismissal’ until they have worked for their employer for two years. During this two-year period, (save for exceptions for e.g. discrimination and whistleblowing and trade union considerations) essentially an employer can dismiss an employee, without relying on a ‘fair’ reason to dismiss, by serving notice (either statutory or contractual).
The Bill will remove this two-year period so that employees can claim Unfair Dismissal earlier in their employment where their employer has dismissed them without using a Fair reason. However, employees may not be able to claim Unfair Dismissal from day one, as the Government also intends to introduce a statutory Probationary period. There is no current law to say that employers must have probationary periods. Whilst the length of the proposed new probationary period is yet to be decided on, the proposal would give employers some flexibility in dismissing staff during this period – that is, they are likely not to be facing Unfair Dismissal employment tribunal claims for a dismissal during this time.
This part of the Bill is in Consultation.
Our Comments
At this stage, we can say the devil will be in the detail. The impact of this provision will depend on the length of the new statutory probation period and any new rules relating to it. There is talk of either a statutory 6 month or 9-month probation period. What remains to be seen is whether this probation period will effectively just shorten the current 2-year period rather than remove it altogether.
The impact on employers will also depend on how flexible they are allowed to be during this probationary period and what a ‘Fair’ reason for dismissal during this time could be.
Fire and Rehire – ‘termination and re-engagement’
Readers may recall the high-profile stories and cases involving P&O Ferries and Tesco. These stories saw public outrage as staff were fired without consultation with unions and some who agreed to do so, were rehired with contracts containing much less generous terms. Many abruptly lost their jobs with little compensation after long years of service. Such dismissals can under existing law, be fair if employers consult and if they have evidence for their business case to make the changes.
This controversial practice may be banned under the proposed Employment Bill. A dismissal with the sole intention of making unilateral changes to a person’s employment terms, will be automatically unfair in most situations. And, there will be no need – as there is now – for a qualifying period of employment in order to bring the claim.
Our Comments
Employees will welcome this change which will provide security to existing contractual terms under which a person is employed. That said, employers may also take comfort in the fact that if the dismissal is due to a financial necessity wherein the future of the business is at risk, a fire and rehire dismissal may not be unfair. Proving to an employment tribunal that financial necessity and the existence of the business are at risk, may not be so easy for employers.
Controversially though, this economic necessity provision could undermine the security that the Bill aims to give to employees, by giving employers a way to continue this practice.
Zero-Hours Contracts
In opposition the Labour party had vowed to end exploitative zero-hours contracts. Under this Bill, ‘qualifying workers’ have the right to guaranteed hours and employers will be obligated to make an offer of ‘guaranteed hours’.
In addition to this, there will be a requirement for employers to provide reasonable notice to zero hours workers of shift schedules, shift changes and shift cancellations. There will also be a requirement for employers to compensate workers where shifts are cancelled.
Our comments
Crucially, this Bill does not ban employers taking people on under zero-hours contracts (‘casual’ contracts). It appears that the Government has listened to stakeholders and understand the flexibility that these contracts can offer to both parties and will therefore keep them available to employers (in certain situations). It is the potentially exploitative nature of the contracts which is likely to be removed.
The Bill aims to provide workers with certainty about their hours – and therefore pay – when they want this from their job, whilst recognising that this may not work for all workers with unpredictable schedules.
Employers won’t have the luxury of choice when it comes to guaranteed hours under zero hours contracts as this is likely to be a right of the worker. As such, some employers may be concerned that their workforce may be less flexible. Some employers will need to review their scheduling practices to ensure their rotas can continue to meet the needs of their business.
Statutory Sick Pay
The current Statutory Sick Pay (SSP) regime sees SSP kick in on day four of absence. The Bill will remove this wait and see the right to have SSP from the first day of absence.
In addition, under the current rules there’s a minimum income required, to qualify for SSP. This Bill removes this qualification.
Our Comments
Employers are likely to have concerns that this change could increase costs and increase short-term absenteeism amongst staff with all the implications of this. Our view is that if employers actively manage sickness absence well, issues with staff taking time off when they aren’t sick could reduce. Having a well-drafted sickness policy and training Managers will protect the business from repeat absences and prevent abuse.
Harassment
A key provision of this Bill will see a requirement for employees to take all reasonable steps to prevent harassment against employees. This includes employer’s liability for harassment by third parties, including customers and clients. Harassment is not limited to sexual harassment. It includes unwanted behaviour which is linked to age, disability, gender reassignment, race, religion or belief, sex and sexual orientation.
Our Comments
Employers should be aware of this responsibility and take precautions to avoid liability for harassment. Employers who operate in any customer facing settings, where there is a high footfall of third parties (customers) coming into contact with employees, should ensure they have measures to detect and prevent harassment of their staff. This is also a health and safety measure. Harassment by one of these customers could see an employer liable. Employers could look to their conditions of customer / third party, service as a starting point and include provisions banning third party harassment of their staff.
Flexible Working – requesting flexible working
The Bill introduces a modest change to the current requests for flexible working legislation. Under the proposed Bill, an employer can only refuse a flexible working request where it is reasonable to do so. Where an employer does reject a request, they would need to confirm the reason for refusal and the reason why it was reasonable to refuse this request.
Our Comments
This is only a mild departure from the existing position. Employers should continue to take flexible working requests from employees seriously. Employers will need to give additional thought as to whether it is reasonable to refuse a request. For example, if a job can be performed from home without negative impacts on the business, it may not be reasonable to refuse a request for a home working arrangement. The proposals don’t change an employer’s potential liability for indirect sex discrimination where a refusal of a request made by a woman to accommodate child care responsibilities may not be justifiable.
Other things to consider
In addition to the key provisions above, the Employment Rights Bill also seeks to change;
- Trade Union Membership – including a right of access to the workplace for trade union representatives and a requirement for workers to receive a statement that confirms the worker’s right to join a trade union.
- Bereavement leave – The current framework around parental bereavement leave will be extended to cover all eligible bereaved persons
- Parental and Paternity Leave – the right to parental and paternity leave will exist from day 1 of employment.
- Collective redundancies – a change to the requirement for consultation before a collective redundancy.
- Establishment of the Fair Work Agency taking over some of the powers currently held by HMRC, the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and the powers of the Director of Labour Market Enforcement.
Summary
This Bill is the most consequential change to employment rights in a generation. Employers will eventually need to update their working practices and policies to accommodate the changes and ensure they are compliant. The noises that we hear are that the Government will be giving employers a long lead in time to prepare for the new rules.
A lot will depend on the coming consultation period and the series of Statutory rules that will set the detail of the Bill, once enacted. Rix & Kay will continue to monitor the changes as they develop so keep an eye out for future blogs.
Contact Us
This blog was written as a collaborative effort between Jordan Ismail and Elaine Abbs.
For any questions regarding the contents of this blog or Employment Law, please contact Jordan Ismail (JordanIsmail@rixandkay.co.uk) or Elaine Abbs (ElaineAbbs@rixandkay.co.uk) for further guidance.
If you’re seeking support with your HR needs, contact our GatekeeperHR team via gatekeeperteam@rixandkay.co.uk.
About the Authors
Elaine Abbs is an Employment Law Solicitor, with over 30 years’ experience supporting businesses, organisations and professionals. With experience across a range of industries, Elaine has built a loyal following and a solid reputation within Employment Law.
Jordan Ismail is a Trainee Solicitor, currently working within both the Employment and Corporate & Commercial team. Jordan Ismail is a member of Jurismus – the junior division of Eurojuris – and has been shortlisted as LawNet’s Trainee of the Year.