As promised, the Labour Government has unveiled its much-anticipated Employment Rights Bill, within its first 100 days of coming into office.
The proposed measures were initially highlighted in Labour’s pre-election manifesto with the aim to deliver “economic security and growth to businesses, workers and communities across the UK”.
Employment reforms covered by the new Employment Rights Bill
The Bill and its accompanying Next Steps to Make Work Pay document, contain 28 employment reforms, some of which include:
- Unfair dismissal – one of Labour’s major proposals is to make unfair dismissal a day one right, by removing the two-year qualifying period. There are however caveats that the Government intends to legislate to “introduce fair and proportionate processes for dismissal” during probationary periods. It is unclear what the processes will look like, however the Government has been clear that “reforms of unfair dismissal will take effect no sooner than Autumn 2026” to ensure sufficient time for detailed rules to be confirmed and to allow time for employers to prepare.
- Family-friendly rights – to support working families with caring responsibilities. The Government will strengthen protections for pregnant women and new mothers returning to work and make paternity and parental leave a day one right.
- Flexible working – will become default from day one for all workers. Employers are required to accommodate the employee’s request as far as reasonably possible. Employers must explain in writing to an employee why any request is refused and why the refusal is reasonable.
- Bereavement leave – will be extended beyond parental bereavement leave to create a general right to bereavement leave. Further details will be confirmed later.
- Preventing sexual workplace harassment – the new preventive duty for employer to take reasonable steps to prevent sexual harassment in the workplace comes into effect on 26 October 2024. The Employment Rights Bill proposes to extend this obligation further for employers to take all reasonable steps to prevent sexual harassment, introducing liability for third party harassment on employers and entitling anyone who makes a disclosure about sexual harassment to protection under the current whistleblowing regime.
- Trade union reform – to remove restrictions on union activity and introduce a process for requesting access to workplaces.
- Fire and rehire only in very limited circumstances – the new Bill aims to end fire and rehire (and fire and replace), where an employer dismisses an employee and offers to re-engage them on new, and often less favourable contractual terms. The Bill will make it automatically unfair to dismiss an employee for refusing to agree a change in terms, or to replace them with another employee on varied terms to carry out substantially the same role.
- Zero-hours contracts – the reforms will seek to address "exploitative zero-hours contracts”, while recognising that some individuals will wish to retain the right to remain on these arrangements. Workers on zero-hours contracts and with a "low" number of guaranteed hours who work more than these hours will be entitled to guaranteed hours contracts, which reflect their regular hours of work over a 12-week reference period.
- Collective redundancy consultation – the scope of collective redundancy consultation obligations will be extended, such that it should apply where 20 or more redundancies are proposed across an entire business, rather than (as currently) only when such are proposed at one ‘establishment’ (i.e. workplace) within a business. The Bill proposes including a commitment to lift the cap on the protective award if an employer does not properly follow the collective redundancy process.
Reforms outside the Employment Rights Bill
Not all of the Labour Manifesto promises for Employment Law have been included in the Employment Rights Bill. For example, the ‘right to switch off’ which aims at restricting employers from contacting staff out of their contractual working hours. The Government however has reiterated its commitment to implementing additional reforms through alternatives routes.
What does this mean for employers?
The Bill is only in its draft form, so it is at the very start of the legislative process. In terms of practical steps for employers, change will take time. There will likely be a period of significant upheaval for employment law, and the final position may be different to from what is laid out in the draft Bill.
The Bill does not specify commencement dates for when the provisions will come into effect, and the majority of changes will take effect no earlier than 2026, with the Government expecting to start consulting about reforms in 2025.
How we can help
If you would like any advice in this area, including a review of your current policies and procedures in light of the new Employment Rights Bill, please do not hesitate to contact Chris Cook on 01727798089 or any member of our employment team.
