Labour’s Employment Rights Bill: What changes have been announced and who is affected?

The Labour government’s new Employment Rights Bill (published on 18^th October 2024) introduces significant changes that aim to improve job security, expand worker protections, and increase flexibility for millions of employees across the UK. Katie Ash, Head of Employment Law at Banner Jones, breaks down some of the key changes and explains who will be affected.

 

Unfair Dismissal Rights from Day One

One of the most notable changes is the removal of the two-year qualifying period for unfair dismissal claims.

“This change marks a substantial shift in employees’ rights as they will be protected from unfair dismissal from the first day of employment,” Katie explains. This is only available where the employee has started work and not where a contract is withdrawn before the employee starts work.

To balance this, the Bill introduces a statutory probationary period, expected to last around nine months, allowing employers time to assess the employee’s performance and the opportunity to dismiss them fairly if required.

During the proposed statutory probationary period, the standard of reasonableness for dismissals will be modified. Employers will be required to carry out a procedure before dismissing an employee during this period, but this is described as being “light touch”, the specifics of which are yet to be provided.  Employers should renew any existing policies and contracts to ensure they are updated and in line with the new legislation. 

 

Flexible Working as the Default

Flexible working rules and regulations only changed recently in April 2024 and details of these can be found here. However, the Bill has added to these changes, making flexible working the default for employees where practical. While employers can still refuse requests, these refusals will now be subject to stricter criteria, ensuring they meet one of eight business reasons and pass a test of reasonableness.

This shift will make it easier for employees to challenge refusals, so it’s really important that businesses take all requests seriously, ensuring that they have fair and robust assessment criteria in place, and that everyone receives training around what that is” explains Katie.

 

Changes to Zero Hours Contracts

While zero hours contracts remain, the Bill introduces new protections with the aim of ending those zero hour contracts which are exploitative to workers. Workers will have a right to be offered a contract guaranteeing them hours which reflect the average hours they have worked over a particular reference period.  The reference period has been suggested as being around 12 weeks. Employers will also need to give reasonable notice of shifts and compensation for shifts which are cancelled or curtailed at short notice.

"This will directly impact workers in sectors like retail and hospitality, where zero-hour contracts have historically been commonplace" explains Katie. “Companies that also employ seasonal workers will want to get legal advice on what their responsibilities are under the new legislation too” advises Katie.

 

Strengthened Protections for Pregnant Women and New Parents

The Bill strengthens protections against redundancy for pregnant women and new mothers. It will now be unlawful to dismiss a woman during maternity leave and for six months after returning to work, except under specific circumstances.

“To a large extent this law is already in place” Katie says. Pregnant employees and new mothers cannot be discriminated against or treated unfairly and have the right to be offered a suitable available vacancy in the event that they are made redundant during pregnancy or within 18 months of childbirth / adoption placement. However, Katie explains “the additional legislation affords these employees greater protection during and after maternity leave, and employers will need to be aware of what the exceptions are before dismissing a pregnant employee or an employee who has recently returned from maternity leave.”

 

Rights to Bereavement, Paternity, and Parental Leave from Day One

Family-related leave rights, including bereavement, paternity, and parental leave, will be enhanced and available from the first day of employment. This eliminates the current 26-week qualifying period and means that employees needing to take time off for family matters, including new fathers and those who experience a bereavement, are entitled to do so.

 

Statutory Sick Pay from Day One

The Bill reforms statutory sick pay (SSP), making it available from the first day of absence rather than after the current four-day waiting period. It also removes the minimum earnings threshold for eligibility. Consultation will take place to determine what an appropriate level of sickness payment should be for those earning less than SSP.

“This change particularly impacts lower-income workers, who will now qualify for SSP from day one of illness,” Katie clarifies.

 

Stronger Protection Against Harassment

The law on sexual harassment came into force on the 26th October and more information on this can be found here. However, the Bill will require employers to take "all reasonable steps," rather than just “reasonable steps” increasing employer responsibility for maintaining a safe working environment. Katie explains “the current law does not define what “reasonable steps” are, but we encourage employers to review the Equality and Human Rights Commission guidance on what factors might be taken into account.”

In addition, the requirement to prevent third party harassment occurring in the workplace has been included as a separate duty. Katie explains “whilst the new duty extends to preventing sexual harassment by third parties, currently the law doesn’t provide workers with the right to bring a stand-alone claim if they have been harassed by a third party whilst at work. This is important as employers will need to ensure they have robust systems in place to meet this requirement and take steps to prevent third-party harassment.”

 

Reform to Fire and Rehire law

The Bill also confirms the position regarding fire and rehire, deeming an employee to be automatically unfairly dismissed if they are dismissed because they refused to agree to a proposed variation to their contract, or because the employer wanted to hire a replacement or rehire the employee under varied terms and conditions to carry out substantially the same duties.

Katie says “there are, of course, some situations in which fire and rehire may be necessary and employers will need to ensure they follow the new statutory Code of Practice in relation to this law.”  Further information on fire and rehire can be found here.

 

Conclusion: A New Era for Worker Rights

The Employment Rights Bill marks a significant step forward for UK workers, offering broader protections and greater flexibility. "These changes provide important safeguards for employees, but they also mean businesses must update their practices in order to comply," says Katie Ash.

We would strongly urge employers to start preparing for the changes now to ensure a smooth transition. By being proactive, employers can demonstrate how their business is committed to the wellbeing of their staff, which can also have a hugely positive impact on recruitment and retention."

 

Key Takeaways for Employers:

• Unfair Dismissal: Protection from day one, with a statutory probationary period.
• Flexible Working: Easier for employees to challenge refusals.
• Zero Hours Contracts: New rights on shift cancellations and regular hours.
• Family Leave: Bereavement, paternity, and parental leave rights from day one.
• Sick Pay: Statutory sick pay from the first day of absence.

 

If you'd like some advice on how to put these measures in place, please contact our team at employment@bannerjones.co.uk

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