Not just a big day for employment lawyers

Thursday, 10th October 2024 – hailed by many employment lawyers as their “Christmas morning” – marked the publication of the Employment Rights Bill. The UK Government has called it the most significant overhaul of employment law in a generation. While the Bill does propose sweeping changes, it falls short of some of the more ambitious reforms outlined in Labour’s manifesto.

The new Government was under pressure with its pledge to bring changes to employment legislation within its first 100 days. We’ve all been there, setting or receiving unrealistic deadlines, and it was no different for the Government in this monumental challenge. However, it was thankfully realised that rushed legislation is bad legislation, and the Bill was presented on day 98, but with time before implementation to consult and make any changes.

Change to unfair dismissal time limits

The first key change, and one that will impact all employers, is the proposed change to give employees greater protection from unfair dismissal. Apart from a few exceptions like whistleblowing dismissals and discriminatory dismissals, an employee currently cannot claim unfair dismissal until they have two years of service. However, this change will allow all employees the right to claim unfair dismissal from day one of their employment.

A statutory probationary period has also been proposed, during which an employee wouldn’t have the same rights to bring a claim as an employee out with this period, but we will need to see what the outcome of the consultation on this is before fully understanding how it will be applied.

The Government has said that these changes will provide security to all employees and ensure it’s not just “a luxury for the privileged few”.

It won’t be impossible for employers to get rid of staff who aren’t up to the job, in the same way that just now it is not impossible to dismiss an employee with over two years’ service who isn’t performing. What there will be is more procedure to follow; policies and procedures will need to be updated to reflect this, and training undertaken by employers.

Zero-hours contracts

One of the big headline points within the Bill is the end to “exploitative” zero-hours contracts. It appears to be an indication of more security for those working under such contracts. The Bill sets out an aim to give workers the right to guaranteed hours if they work regular hours over a 12-week period. This could be tricky for some employers, particularly those in the hospitality industry who may have workers carrying out a lot of work in the run-up to Christmas, for example. Workers on zero-hours contracts will also be entitled to “reasonable” notice ahead of any changes being made to their shifts, as well as compensation if a shift is cancelled or ended early.

The reality is that many workers and employers rely on the flexibility afforded by zero-hours contracts, and there is a concern that by introducing more complexities in relation to this type of contract that they will just stop being used.

Sick pay

A significant change in the Bill is that the waiting period and lower earnings limit to receive statutory sick pay will be removed.

Currently, to qualify for sick pay, employees have to be sick for more than three days in a row and earn an average of at least £123 per week. Under the plans, employees will be entitled to statutory sick pay from the first day they are ill and those earning under £123 per week will also be eligible.

Flexible working

One of the hot topics over the past few years has been flexible working. Flexibility comes in all different shapes and sizes, and it doesn’t just apply to remote or hybrid working. Campaigners, working parents and those with disabilities will be happy to see that flexible working is to become the “default where practical” for all workers, with employers required to say yes to requests from staff from their first day starting in a job unless they can prove it is “unreasonable”.

Employees can already request flexible working from their first day in a job, but an employer can refuse an application if they have a good business reason for doing so. It is unclear if there will be a big shift from current rules and there appear to be many reasons available to employers to refuse flexible working in the new Bill.

Bereavement leave

We previously had the introduction of parental bereavement leave and this Bill has extended it to be a day-one right, although leave is still limited to two weeks following the loss of a child and one week for other types of bereavement leave. As with other parts of the Bill, we await further information on the details, but this can be seen as a positive for employees suffering from losses.

Fire and rehire

Initially it was thought that Labour would abolish the practice of ‘fire and rehire’; then they said they would restrict it. Fire and rehire is a process where employees are dismissed on good terms and brought back on less favourable terms. If a business needs to cut costs, it may try to change its workers’ terms and conditions, for instance by cutting pay or changing shift patterns. If the workers don’t agree, the employer could dismiss the affected workers and hire them back on worse terms and conditions.

The new Bill proposes to ban the practice in most circumstances, but a company could still use it if there was a risk around its ability to carry on its activities.

Conclusion

Certain proposals included in Labour’s Make Work Pay plan were not featured in the Bill, including its proposed ‘right to switch off’ – stopping employers contacting their staff out of hours – which has been delayed to a later date. We will wait to see what the Government proposes in terms of regulations or legislation to some of the parts missing from the Bill, which were proposed in election documents.

When this legislation comes into force, it will have a huge impact for employees and employers. There will be costs for businesses associated with a number of the changes, but the reality is, a lot of good employers are doing most of what has been proposed in any event. What will be interesting to see is when the new legislation comes into force, and how it will be welcomed by all those affected.

Written by Marianne McJannett, Head of Employment, Bellwether Green Solicitors