The Employment Rights Bill, recently introduced by the UK government, represents a significant overhaul of employment law, aiming to enhance workers' rights and provide a more balanced framework for both employers and employees. This guide will explore the key aspects of the Bill, its implications for employers, and the steps businesses should take to prepare for these changes.
Key provisions of the Employment Rights Bill
Unfair dismissal
Day one rights: One of the most notable changes is the introduction of unfair dismissal rights from the first day of employment. This marks a departure from the current requirement of two years' continuous service. Employers will need to adapt their hiring and probationary processes to accommodate this change.
Probationary periods: The Government’s preference is for a nine-month probationary period during which a "lighter-touch" dismissal process can be applied, allowing employers to assess an employee's suitability for the role. This period will be subject to further consultation to ensure it provides stability and security for both businesses and workers.
Flexible working
Default right: Flexible working is set to become the default position, with employers required to grant requests unless it is unreasonable to do so. The grounds for refusal remain similar to existing legislation, but employers must now provide a written explanation of why a request is refused and why the refusal is reasonable. This change emphasizes the importance of accommodating flexible working arrangements where possible.
Reasonableness requirement: The Bill introduces a statutory reasonableness requirement for refusing flexible working requests, which will likely make it more challenging for employers to deny such requests. Employers should review their current policies and ensure they have clear, documented reasons for any refusals.
Statutory Sick Pay (SSP)
Immediate entitlement: The Bill removes the lower earnings limit and the waiting period for SSP, allowing employees to receive sick pay from the first day of absence. This change aims to provide greater financial security for workers and reduce the administrative burden on employers.
Implications for employers: Employers will need to update their payroll systems and policies to reflect these changes. The removal of the waiting period may also require more proactive management of short-term sickness absence.
Family-friendly rights
Day one entitlements: The Bill introduces day one rights for paternity leave, unpaid parental leave, and bereavement leave. This expansion of family-friendly rights aims to support working families and promote a better work-life balance.
Protections for pregnant women and new mothers: The Bill strengthens protections against dismissal for pregnant women and new mothers, extending these protections to six months after returning to work. Employers must ensure their policies comply with these enhanced protections.
Zero-hours contracts
Guaranteed hours: Employers will be required to offer zero-hours workers a guaranteed-hours contract based on the hours they regularly work over a 12-week reference period. This change seeks to address the exploitative nature of zero-hours contracts while allowing workers to retain flexibility if they choose.
Reasonable notice and compensation: Workers on zero-hours contracts will be entitled to reasonable notice of shift changes and compensation for cancelled shifts. Employers must ensure they have systems in place to provide adequate notice and manage compensation claims.
Fire and rehire practices
Automatic unfair dismissal: The Bill introduces new statutory obligations around the use of fire and rehire practices. Dismissals will be automatically unfair unless they fall within a limited exception related to financial difficulties threatening the business's viability. Employers must adhere to a prescribed consultation process before implementing such changes.
Consultation requirements: Employers considering contractual variations through fire and rehire must engage in thorough consultation with employees and trade unions. This process should be documented and transparent to avoid potential legal challenges.
Collective redundancy consultation
Broader scope: The Bill removes the one-establishment requirement for collective redundancy consultation, meaning that 20 or more proposed redundancies within 90 days across a whole business will trigger consultation obligations. This change will likely increase the frequency of collective consultations for larger employers.
Implications for employers: Employers must be diligent in monitoring redundancy numbers across their entire business to ensure compliance with consultation requirements. This may necessitate changes to internal processes and record-keeping practices.
Harassment and equality
Enhanced protections: The Bill strengthens the duty on employers to take all reasonable steps to prevent sexual harassment, including third-party harassment. Employers will be liable if they fail to prevent harassment by third parties, and regulations may specify what constitutes reasonable steps.
Equality action plans: Large employers will be required to develop and publish equality action plans addressing gender pay gaps and supporting employees through menopause. This requirement aims to promote diversity and inclusion in the workplace.
Trade union rights and industrial action
Simplified recognition process: The Bill simplifies the union recognition process and introduces new rights of access for union officials. Employers must inform employees of their right to join a union and facilitate union access to the workplace.
Repeal of minimum service levels legislation: The Bill repeals The Strikes (Minimum Service Levels) Act 2023, which previously set minimum service levels during strikes. This change may impact industrial relations and require employers to reassess their contingency plans for strike action.
Practical steps for employers
Reviewing policies and procedures
Update employment contracts: Employers should review and update employment contracts to reflect the new rights and obligations introduced by the Bill. This includes provisions related to unfair dismissal, flexible working, and zero-hours contracts.
Revise HR policies: HR policies should be revised to ensure compliance with the new family-friendly rights, statutory sick pay provisions, and harassment prevention measures. Employers should also consider implementing training programmes to educate managers and employees about these changes.
Preparing for consultation and implementation
Engage with stakeholders: Employers should engage with trade unions, employee representatives, and other stakeholders to discuss the implications of the Bill and gather feedback on proposed changes. This engagement will be crucial for navigating the consultation process and ensuring a smooth transition.
Plan for implementation: Employers should develop a detailed implementation plan outlining the steps required to comply with the new legislation. This plan should include timelines, resource allocation, and communication strategies to ensure all employees are informed and prepared for the changes.
Monitoring and compliance
Establish Monitoring Systems: Employers should establish systems to monitor compliance with the new requirements, such as tracking flexible working requests, managing zero-hours contracts, and ensuring adherence to consultation obligations. Regular audits and reviews can help identify potential issues and ensure ongoing compliance.
Seek legal advice: Given the complexity and scope of the changes introduced by the Bill, employers may benefit from seeking legal advice to ensure they fully understand their obligations and avoid potential legal challenges. Legal experts can provide guidance on specific issues and help develop strategies for compliance.
Additional considerations
Future reforms and consultations
Right to Switch Off: The government has indicated plans to introduce a "Right to Switch Off," preventing employees from being contacted outside of working hours except in exceptional circumstances. Employers should stay informed about this potential reform and consider its implications for their business.
Single status of worker: The government is considering a move towards a single status of worker, which would simplify the current employment status framework. This change could have significant implications for employers, particularly those with diverse workforces.
Ethnicity and disability pay gap reporting: Large employers may soon be required to report on ethnicity and disability pay gaps, in addition to the existing gender pay gap reporting requirements. Employers should begin preparing for this potential obligation by reviewing their data collection and reporting processes.
Impact on business practices
Cost implications: The introduction of day one rights and other changes may result in increased costs for employers, particularly those with large workforces or high turnover rates. Employers should assess the financial impact of these changes and consider strategies to mitigate potential costs.
Workforce management: The Bill's emphasis on flexible working and family-friendly rights may require employers to adopt more flexible workforce management practices. This could include offering remote work options, adjusting shift patterns, and providing additional support for employees with caring responsibilities.
Cultural shift: The changes introduced by the Bill reflect a broader cultural shift towards greater employee rights and protections. Employers should consider how these changes align with their organizational values and culture, and take steps to foster a supportive and inclusive work environment.
The Employment Rights Bill represents a significant shift in the UK employment landscape, with far-reaching implications for employers. By understanding the key provisions of the Bill and taking proactive steps to prepare for its implementation, employers can ensure compliance and support a positive working environment for their employees.
This article was generated using Lex HR, an AI tool designed to assist HR professionals with employment law. If you find the content helpful, please explore Lex HR and sign up for a free trial to see how it can benefit your HR practices.
