What you need to know about the Employment Rights Bill: key highlights

On 10 October 2024, the Government published its Employment Rights Bill, setting out its plans to deliver on promises made in its pre-election Plan to Make Work Pay. The Bill contains 28 different reforms which are intended to implement sweeping changes to employment law in Great Britain. Here we review some of the key provisions of this Bill and what this could mean for employment law and employers.

Unfair dismissal:

Employees must currently wait two years until they have protection from ordinary unfair dismissal. One of the proposed reforms in the Bill is to make this a day-one right. However, provisions will be made for a statutory probation period to apply where it is suggested that there may be a less onerous approach that could be followed to dismiss an employee who is not right for the job. The length of the probation period will be subject to a consultation, but recent reports suggest the Government will propose nine months for this.

Statutory Sick Pay:

Currently, employees need to earn at least the lower earnings limit (at the moment this is £123 per week on average, but it is reviewed annually) to get SSP and it is paid from the fourth day of sickness absence. Under the proposals in the Bill, these waiting days will be removed so that it is paid from the first day of absence and the lower earnings limit will also be removed so that more people will be entitled to receive SSP.

However, to avoid an employee that earns below the rate of SSP (currently £116.75 per week) receiving more pay when they are off sick, it is also proposed that in such a situation the employee should receive a percentage of the full SSP rate. The Government will carry out a consultation before deciding on how much this should be.

Fire and re-hire:

What the Government has deemed to be “bullying” fire and re-hire practices will be brought to an end.

“Fire and re-hire”, where an employer dismisses and re-engages an employee to push through changes to terms and conditions, will be an automatic unfair dismissal except where a business is in serious financial trouble affecting its continuation and the employer cannot reasonably avoid the need to make the change.

Sexual Harassment:

Employers will be required to take all reasonable steps to prevent sexual harassment in the workplace.

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Under the proactive duty in place from 26 October 2024, employers must take “reasonable steps” to prevent sexual harassment in the workplace. This obligation will be strengthened to taking “all reasonable steps”, putting greater obligations on employers to thoroughly assess the risks of sexual harassment that their employees face and put in place all reasonable steps to prevent those risks.

Liability for third-party harassment:

Currently, employers are not liable for third-party harassment (harassment from a client, customer, member of the public, etc), although under the proactive duty in place from 26 October 2024, employers must take reasonable steps to prevent third-party sexual harassment. By putting liability for third-party harassment once again on a statutory footing, if these proposals under the Bill do make it into law, employers could face claims for third-party harassment from their employees.

Zero hour workers:

Zero-hour workers will be entitled to reasonable notice of shifts and changes to their shifts as well as compensation for shifts which are cancelled, moved or ended early. Future regulations will set out how much notice will need to be given to employees and set the rate of compensation that will be applicable.

The Bill also proposes to introduce a right for those working on zero-hours or “low-hours” contracts to be offered a guaranteed-hours contract to reflect the hours they regularly work over a defined period. The Plan to Make Work Pay manifesto indicated the defined period would be 12 weeks, but this will now be subject to a consultation process.

Flexible working:

Flexible working will be made the default unless the employer can show it’s unreasonable.

Employers can currently decline flexible working requests if one or more of the eight specific grounds apply. Under the proposed rules, they will also need to show why it was reasonable to refuse the request in relation to that ground(s). As such, employers will need to review their existing documentation and practices in relation to flexible working to ensure this requirement is reflected in them, should this proposal make it into law.

Takeaway:

None of the proposals highlighted above will make it into law in the immediate future – the Bill will need to go through the usual parliamentary process before becoming law, which is not expected to be until 2026. However, it is still important that employers make themselves aware of what is potentially on the horizon so that should the changes come into law, they are ready to act on them.