The new government promised an Employment Rights Bill within its first 100 days. That has happened – on 21 October the Bill had its second reading in the House of Commons and the vote was 386 ayes and 105 noes. An unsurprising result. Consultation will follow as the bill moves to the committee stage.
Change will not happen overnight. The government’s stated intention is as follows - “We expect to begin consulting on these reforms in 2025, seeking significant input from all stakeholders and anticipate this meaning that the majority of reforms will take effect no earlier than 2026. Reforms of unfair dismissal will take effect no sooner than autumn 2026”. Employment Rights Bill 2024-25 – House of Commons Library (parliament.uk)
That said, you should prepare for change. The Bill itself is 150 pages long and should be read alongside the newly published ‘Next Steps to Make Work Pay’ document. The Bill and the Next Steps document can be found here: Employment Rights Bill and Next Steps to Make Work Pay.
This is what the bill says
Day one rights – several key employment law rights (including the right not to be unfairly dismissed and rights to sick pay and unpaid parental leave) will become ‘day one’ rights.
The statutory probationary period – the government will consult on a new statutory probationary period to enable employers to assess the suitability of new hires for light touch dismissal procedures for employers to adopt. The length of the probationary period or the ‘initial period of employment’ will be the subject of consultation, but the government favours nine months. The government also intends to consult on what a compensation regime for successful claims during a probation period might be, with consideration given to tribunals not being able to award the full compensatory damages currently available for unfair dismissal claims.
Sick pay – an end to waiting days. Entitlement to statutory sick pay (SSP) will start on the first day of absence, rather than the fourth day. SSP will also be available to those who earn below the Lower Earnings Limit.
Maternity and pregnancy protections – protections for pregnant employees and new mothers will be strengthened with the government promising to make it unlawful to dismiss such employees within six months of their return to work, except for in specific circumstances.
Paternity rights expanded – fathers and eligible partners will be entitled to statutory paternity leave from the start of employment, rather than having to wait until they have 26 weeks’ service.
Flexible working the default – a flexible working request may only be refused where it is ‘reasonable’ for the employer to refuse the application for one of the existing reasons. Thus, the existing eight reasons to decline still exist but employers will be required to explain which applies and why that refusal is justified and reasonable.
Zero hours contracts – workers on zero hours and, importantly, also those on ‘low hours’ contracts will have the right to move to a contract reflecting the hours that they regularly work, based on a 12-week reference period. Workers will have the option to remain on their existing contract if they prefer. There will be consultation as to what constitutes ‘low’ hours. Subsequent reference review periods will also be built in if additional hours become regular over time. Again, consultation has been promised as to how those periods will work.
Bereavement leave – a new right to bereavement leave will be introduced.
Removal of certain strike restrictions – repeal of minimum service levels legislation (introduced last year by the previous government) and industrial action ballot turnout requirements and extended minimum notice periods that were brought in under the Trade Union Act 2016.
New industrial relations reforms – in addition to repealing the above restrictions, the government has set out wide-ranging industrial relations plans including plans to simplify the statutory recognition process, introduce new rights of workplace access for trade union officials and new obligations for employers to inform workers of their right to join a union.
Fire and rehire – the Bill includes important new provisions addressing the practice of dismissing and re-engaging employees (often referred to as ‘fire and rehire’) and seeking to significantly restrict the circumstances in which such a dismissal would be fair. You should assume it will be an automatically unfair dismissal.
Sexual harassment prevention – the Bill extends the new duty on employers to take reasonable steps to prevent sexual harassment of their workers to cover ‘all’ reasonable steps. It also introduces a new Equality Act claim enabling workers to bring a claim against their employer where they are harassed by a third party and the employer failed to take all reasonable steps to prevent the third-party harassment.
Gender pay and menopause action plans – large employers (those with 250 or more employees) will be required to create actions plans on how to address their gender pay gaps and how they will support employees through the menopause.
Redundancy consultation – whether collective consultation is required in a redundancy situation will be determined by reference to the number of people affected across the business as a whole rather than the number of people affected at each establishment as is currently the case. You should work on the basis that any redundancy process will take longer to achieve.
The Fair Work Agency – the Fair Work Agency will be established to enforce certain employment law rights (including holiday pay and statutory sick pay).
Public sector contracts – the two-tier code for public sector contracts will be reintroduced and strengthened, with the aim of ensuring that outsourced workers are offered terms and conditions that are no less favourable to those transferred from the public sector.
But what didn’t make the cut?
No single test for status of worker – rather than put forward changes at this stage, the government intends to consult on its proposal to create a single status of worker which would see ‘employees’ reclassified as ‘workers’ and all workers awarded the full suite of employment rights.
The right to switch off – the Bill does not contain a ‘right to switch off’, which would have enabled employees to disconnect from work and limit any contact from their employer outside of working hours. The Next Steps document confirms this will be addressed through a Statutory Code of Practice and promises consultation with business and trade unions before introduction.
No equality reforms – equality reforms (such as expanded equal pay protections and pay gap reporting obligations) are expected to be included in a draft Equality (Race and Disability) Bill that will be published separately later this autumn.
Changes to NMW bands – the age bands which restrict National Living Wage (NLW) entitlement to those aged 21 and above are expected to be removed to ensure all adult workers are eligible for the NLW. The government says it will address this through non-legislative changes. Importantly, it has already asked the Low Pay Commission to take account of the cost of living when it recommends the rate of NLW for next year and has asked the commission to recommend a National Minimum Wage rate for 18 to 20 year-olds that narrows the gap to the main NLW rate.
Free employment law clinic
Goughs’ employment law experts Rebecca Dennis and Amber Ballans will provide realistic, pragmatic and accessible advice in a series of clinics on the following dates:
Clinic dates
- Wednesday 6 November
- Wednesday 11 December
- Wednesday 15 January
- Wednesday 26 February
The clinics will take place at Hotel Indigo Bath, 2-8 South Parade, Bath BA2 4AB
The clinics will offer:
- An opportunity to meet two employment law experts
- Pragmatic and realistic advice to aid your businesses growth without risk
- A conversational approach offering you the opportunity to ask questions and alleviate any concerns you may have
- Advice tailored to you and your business
Alternatively, click here to book an appointment with the specialist employment legal team at Goughs Solicitors.
