The Employment Rights Bill is currently undergoing detailed scrutiny by the members of the House of Lords as it goes through the Committee Stage. Covering 28 areas of employment law, the legislation presents the biggest and most transformative change in employment rights in a generation. Many of the most complex details are still to be confirmed in secondary legislation.
The Government wants the Bill to be passed before Parliament’s summer recess which begins on 22 July. When the Bill is passed and it receives Royal Assent, there will still be a lot that is not fully known. Details of the new probationary period, zero hours contract reforms and other elements will only be finalised following further consultation.
The Government has promised an implementation plan and to phase in the changes but it remains unclear how this will work. The Telegraph recently reported that Labour’s “1970s Bill could send Britain over the edge” by having the opposite effect to what is desperately needed and thwarting growth.
Planned Changes & Action Points to Be Aware Of
Unfair Dismissal Reform
Planned Change
What Does This Mean in Practice?
Action Points
The 2 year qualifying service requirement for unfair dismissal claims will be abolished.
This is a drastic change meaning that many more workers will have unfair dismissal rights.
All workers will have unfair dismissal protection from day 1.
It will be important to ensure that all new starters have a probation period in their contracts and that there is a process to ensure that the employee’s performance is regularly reviewed during this time.
There will be a statutory probation period during which the employer can terminate the employment or serve up to 3 months’ notice to terminate the employment for performance or conduct reasons following a dismissal process.
Employers will need to review disciplinary and dismissal policies and procedures and ensure that conduct and performance issues are proactively managed by managers.
The length of the probationary period and the dismissal procedure will be subject to consultation but it has been indicated that a 9 month period is favoured and a process that involves a meeting with the employee.
Consultation will also take place on whether reduced compensation should apply to unfair dismissal claims during the probationary period.
The unfair dismissal changes will not come into effect until Autumn 2026 and the current 2 year qualifying period will apply until then.
Harassment Reform
Planned Change
What Does This Mean in Practice?
Action Points
To reinforce the duty to take reasonable steps to prevent sexual harassment at work.
The new duty to take reasonable steps to prevent sexual harassment at work which has been in force since October 2024, will become a duty to take “all” reasonable steps to prevent sexual harassment. Regulations will set out what steps employers must take such as carrying out risk assessments and implementing harassment policies and procedures.
Employers who have already put in place reasonable steps to prevent sexual harassment at work so as to comply with the duty introduced in October 2024 will be well placed when the duty is extended. If you haven’t already put measures in place in response to the duty to prevent sexual harassment, it is essential to do so.
Whistleblowing protection for sexual harassment complainants.
A complaint of sexual harassment at work will be treated as a protected disclosure under the whistleblowing legislation.
This may limit the effectiveness of confidentiality clauses in settlement agreements as it is not possible to prevent a worker from making whistleblowing disclosures.
The introduction of protection from third party harassment.
Employers will be liable for harassment of any kind by third parties including customers and suppliers unless they take steps to prevent it.
The new third party harassment law will extend to all types of harassment and employers will need to ensure that they have appropriate measures in place such as appropriate wording in contracts with clients and suppliers.
Family Rights Reform
Planned Change
What Does This Mean in Practice?
Action Points
Paternity leave and unpaid parental leave are to become a day 1 right.
The current qualifying periods of 26 weeks for paternity leave and one year for unpaid parental leave will be abolished so that employees will be able to take leave from day 1.
Employees will be able to take paternity leave following a period of shared parental leave which they cannot currently do.
Removal of the qualifying periods for these rights will entitle many more employees to take these types of leave.
Paternity leave is for a maximum of 2 weeks and many employees do not take parental leave as it is unpaid so this change is not anticipated to significantly affect employers.
There will be a new protection from dismissal during pregnancy, maternity or adoption or shared parental leave or within 6 months of returning to work.
Employers need to ensure that appropriate processes and training are in place to ensure that they do not fall foul of these laws.
A new right to bereavement leave.
Parental bereavement leave (introduced in April 2020) will be extended to cover other family bereavements. This will give employees the right to at least one week of bereavement leave following the death of a family member. This will also cover miscarriage.
Employers who do not currently have policies in place should take action to introduce these in preparation for the new rights.
Flexible Working Reform
Planned Change
What Does This Mean in Practice?
Action Points
Existing rights to be strengthened by making flexible working the default where this is “practical”.
Employers will still be able to refuse flexible working requests on specified business grounds as is currently the case but there will be a new requirement for any refusal to be “reasonable”. Employers who reject a flexible working request will not only have to state the grounds for refusal but also explain why the refusal is reasonable.
The Government pledged to make flexible working the default for all roles with employers required to accommodate this as far as is reasonable. Thankfully for employers, the planned changes are not as far reaching as this as requests can be refused provided that it is reasonable to do so. It remains to be seen how this will be interpreted in practice by tribunals and Government guidance.
Employers need to review their flexible working policies ahead of these changes and ensure that managers are trained in the new law and how to handle flexible working requests.
Fire & Re-Hire Reform
Planned Change
What Does This Mean in Practice?
Action Points
The practice of changing terms and conditions by dismissing and offering to re-engage on new terms is to be banned.
It will become automatically unfair to dismiss an employee for refusing to agree to changes to their employment contract. It will also be automatically unfair to dismiss an employee where the reason is to re- engage them or someone else on new terms. A limited exception will apply where the change is in relation to financial difficulties likely to affect the ability of the business to continue as a going concern.
This is an important change as it means that employers have far less flexibility when seeking to change terms and conditions of employment. It will no longer be possible to force through changes to terms and conditions.
Employers should ensure that contracts are drafted with as much flexibility as possible.
Zero Hours/Casual Workers Reform
Planned Change
What Does This Mean in Practice?
Action Points
Zero hours/low hours workers will have the right to be offered a contract reflecting regular hours.
Zero/irregular hours workers will be given a right to notice of shifts and compensation for cancellation.
The new right to a contract will apply to workers on a zero hours contract/arrangement or a contract with minimum guaranteed hours. If the worker’s hours regularly exceed the zero/minimum hours over a 12 week reference period, then they will have to be offered a new contract reflecting regular hours. Employers will be required to give zero hours workers and irregular hours workers reasonable notice of shifts which the worker is either required or requested to work as well as reasonable notice of cancellations or changes.
Workers will have the right to receive a set payment where a shift is cancelled, changed or curtailed at short notice.
These rights will cover agency workers too. The hirer will be responsible for offering regular hours contracts and the agency will be liable for shift cancellation payments.
The new laws aim to ensure that zero hours or casual workers who in practice work fairly regular hours, can have a contract which reflects this. Also, all such workers will have increased reliability and certainty around their working arrangements. Employers who rely heavily on casual or zero hours workers may wish to review their arrangements to assess which workers may be entitled to a regular hours contract.
Also, if shifts are usually offered at short notice and/or regularly cancelled or curtailed, then it would be advisable to assess how this may be improved, to reduce the risk of exposure to compensation when the changes come into force.
Pay, Holiday & Sickness Reform
Planned Change
What Does This Mean in Practice?
Action Points
SSP will be available from day 1 and the earnings threshold will also be removed so that SSP will be available to all workers regardless of their earnings.
This will lead to an increase in wage bills.
Sick pay policies and contractual sick pay provisions should be reviewed.
The Low Pay Commission will take into account the cost of living when setting the rates of the National Minimum Wage (NMW) and National Living Wage and the age bands will be removed so that the same rate applies to all workers aged 18 and above.
Employers should review their records on holiday and holiday pay to ensure that they can demonstrate compliance. There will be flexibility as to how such records are kept but it may be more complex where holiday pay calculations include additional elements such as overtime or commission.
Employers will be obliged to retain records showing compliance with the rules on statutory holiday and pay for at least 6 years and failure to do so will be a criminal offence.
Collective Redundancy Consultation Reform
Planned Change
What Does This Mean in Practice?
Action Points
The collective redundancy consultation requirements will be expanded and the penalties for non- compliance will be increased.
The current threshold for collective redundancy consultation is where an employer proposes 20 redundancies or more within a 90 day period at a single site or establishment. This will continue to apply but a new additional threshold will be introduced based on the number of redundancies across the employing business as a whole.
The maximum penalty for breaching the collective redundancy consultation requirements will increase from 90 days’ pay to 180 days’ pay per affected employee.
The additional threshold will mean that the collective consultation duty is triggered more easily and more often. Employers are advised to have procedures in place to track redundancies and changes to terms and conditions, not only on a site specific basis but also across the entire business.
The increase in the penalty for non-compliance means the costs of failing to inform and consult properly on large scale redundancies will increase significantly.
Equality Reporting Reform
Planned Change
What Does This Mean in Practice?
Action Points
Requires large employers to publish menopause and gender pay gap action plans.
Employers with 250 or more employees will be required to produce a gender pay gap action plan to accompany their gender pay gap reports.
The Government plans to set out the details of these changes in regulations.
Requires large employers to publish ethnicity and disability pay gap figures.
Employers with 250 or more employees will be required to produce action plans as to how they support employees through the menopause.
Employers who do not have a menopause policy may consider introducing one.
Enforcement Reform
Planned Change
What Does This Mean in Practice?
Action Points
Increasing the time limits for employment tribunal claims.
The time limit for workers to bring a claim will increase from 3 to 6 months.
There will be a longer period of uncertainty for employers following an employee’s termination of employment before they discover whether they are to face a tribunal claim.
Establishing a new single enforcement body for workers’ rights.
A new Fair Work Agency will be established to enforce workers’ rights.
The Agency will have wide ranging powers including to require information, enter premises, enforce holiday pay and SSP, issue penalties, bring claims on behalf of workers and recover enforcement costs.
Trade Unions & Strikes Reform
Planned Change
What Does This Mean in Practice?
Action Points
Strengthening the rights of trade unions.
Strike ballot and notice requirements are to be relaxed and electronic balloting will be introduced.
Rules on minimum service level provision during industrial action are to be repealed.
Employers will have a new duty to inform employees of their right to join a trade union, to be included in the contract of employment.
Trade unions will be granted new rights to request access agreements from employers to allow access to the workplace for recruitment and organising purposes. Sector wide collective bargaining will be introduced in the social care and possibly other sectors.
Trade unions are likely to have a greater role in employee relations. It will be easier for trade unions to call strikes and other industrial action and harder for employers to manage strikes.
Employers need to update employment contracts to refer to the right to join a trade union.
We shall update you again once further details are known. If you require assistance and advice regarding the new Employment Rights Bill, we would be pleased to offer bespoke legal advice tailored to your particular organisation. Contact us for more information.
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Author
sarahrobinson@premier-legal.co.uk
Sarah Robinson is the Managing Partner and has specialised exclusively in employment law since qualifying as a solicitor in 1996.
Sarah has considerable experience of representing clients in many different industry sectors including insurance and financial services, corporate finance, technology, legal services, automotive, hotel and catering and media as well as the public sector.
Areas of particular interest include restrictive covenants, TUPE and advising in relation to discrimination.