The New Employment Rights Bill – What is Changing?

Yesterday, two days before their 100-day deadline, the new Labour government published their Employment Rights Bill. The Bill is intended to strengthen and reform workers’ rights across the UK, providing the biggest overhaul of employment rights in decades. The Bill sets out 28 reforms, the headline being the scrapping of the two-year qualifying period for protection against unfair dismissal. A new extended probationary period, during which employees can be fairly dismissed, is proposed, but details are not yet available.

The government has confirmed that the majority of the reforms are not going to take effect until 2026, as consultations will need to be carried out in order to flesh out the details in secondary legislation.

The Employment Rights Bill: A Summary

The Bill is split into 6 Parts:

1. Employment Rights
2. Other matters relating to employment
3. Pay and conditions in particular sectors
4. Trade unions and industrial action, etc
5. Enforcement of labour market legislation
6. General

Here are some of the key points:

Part 1: Employment Rights

1. Zero hours workers: Significant amendments are to be made to Part 2A of the Employment Rights Act 1996 (ERA).
   1. The title of Part 2A is to be changed to ‘Zero-hour workers and similar’.
   2. The Part is to be split into five ‘Chapters’. Chapter 1 is to include the current section 27A ERA, which makes exclusivity terms unenforceable in zero hours contracts.
   3. Chapters 2 to 5 set out the conditions and requirements of the right for qualifying workers to be offered guaranteed hours. Workers will gain new rights to receive a contract that reflects their regular hours, and to notice or compensation if their shifts are cancelled.
2. Flexible working: Sections 80G and 80H of ERA 1996 are amended to:
   1. set out an employer’s duty to deal with an application for flexible working in a reasonable manner
   2. add a requirement that an employer can only refuse a request if it considers that a specific ground/s apply, and it is reasonable to refuse the request on that ground/s (the grounds are the same as specified in the current legislation).
   3. require the Employer to explain why the refusal is reasonable, in writing to the employee
3. Statutory Sick Pay: SSP is to take effect from day one and the removal of the Lower Earnings Limit. The weekly rate of SSP will be set at £116.75 or a prescribed percentage of employees’ weekly earnings (whichever is lower).
4. Tips and gratuities: Amendments as per the Employment (Allocation of Tips Act) 2023.
5. Entitlements to leave:
   1. Removal of the qualifying period of employment for entitlement to parental leave and to paternity leave (the requirement is currently 1 year for parental leave and 26 weeks for paternity leave).
   2. Removal of the restriction on employees taking paternity leave and pay following shared parental leave and pay.
   3. Change of ‘Parental Bereavement Leave’ to ‘Bereavement Leave’, entitling anyone, not just parents. A ‘bereaved person’ will be defined in the regulations which will be made by affirmative procedure.
6. Protection from harassment:
   1. introduction of employer’s duty to take ‘all’ reasonable steps to prevent sexual harassment of employees
   2. substantial provisions to cover harassment of employees by a third party
   3. Part 4A of the ERA 1996 (whistleblowing protection) is to be amended to explicitly include protected disclosures about sexual harassment
7. Dismissal:
   1. Removal of 2-year qualifying period for bringing claims of unfair dismissal
   2. Enhanced provisions for dismissal during pregnancy and statutory family leave
   3. Automatically unfair to dismiss an employee for refusing to agree to a variation of contract

Part 2: Other Matters Relating to Employment

1. Procedure for handling redundancies: the requirements to collectively consult, and to notify the Secretary of State, apply where the employer is proposing to make 20+ employees redundant. The reference to ‘one establishment’ will be removed for the purpose of counting whether 20 or more employees are affected, so the provisions will apply across the whole business if there are 20 or more redundancies proposed in total.
2. Duties of employers relating to equality: Equality action plans: may require employers with 250+ employees to produce action plans in relation to achieving gender equality

Part 3: Pay and Conditions in Particular Sectors

1. School support staff: provisions for introducing sector wide collective bargaining for school support staff
2. Adult and social care: provisions for introducing sector wide collective bargaining for Adult social care workers

Part 4: Trade Unions and Industrial Action

There are comprehensive amendments on the topic of trade unions and industrial action, but the key takeaway is a new Right to statement of trade union rights, which will require employers to provide workers with a written statement of the worker’s right to join a trade union

Part 5: Enforcement of Labour Market Legislation

Clauses 72 to 112 provide details on a new labour market enforcement agency.

If you have any questions on the Bill and what it could mean for you or your business, we would be happy to discuss this with you in further detail.