A guide to the new Employment Rights Bill: What businesses need to know

Following the general election, the new Government committed to publishing its proposals for employment law reform within 100 days. With a few days to spare, the highly anticipated Employment Rights Bill was published on 10 October 2024.

It is described as the biggest upgrade to rights at work for a generation, and here is an overview of the key proposals.

Unfair dismissal

The proposal to confer day-one unfair dismissal rights has been controversial. Currently, two years of service is required.

There will be a new statutory probation period. This will give employers time to assess someone’s suitability properly. During that period, employers will be able to adopt a “lighter-touch and less onerous approach” when dismissing someone who is not right for the job.

The Government prefers a nine-month statutory probation period and will consult on this during 2025. However, the reform of unfair dismissal will not be before autumn 2026.

In certain circumstances, there is already extensive protection from unfair dismissal from day one, such as dismissals relating to whistleblowing or for health and safety reasons.

Zero-hours workers

It is reported that 84% of zero-hours workers would rather have guaranteed hours. If someone works regular hours over a defined period, they will have a right to a guaranteed-hours contract, but workers can remain on zero-hours contracts if they prefer. They will also have the right to reasonable notice of a shift and the right to payment for cancelling a shift or changing it at short notice.

Fire and re-hire

The Government has said that “ending unscrupulous employment practices is a priority”. This includes ending firing and rehiring on new terms and conditions, often less favourable. It will be automatically unfair to dismiss someone who refuses to agree to a variation of their contract except in certain circumstances. For instance, if the variation ensures the business can continue as a going concern where there is “genuinely no alternative”. This could be difficult to evidence in many cases.

Supporting working families

Flexible working will be the default for all workers unless the employer can show it was reasonable to reject a request on specified business grounds. Currently, there is a right to parental bereavement leave, and there will be a new general right to bereavement leave. There will also be improved protection for pregnant women and new mothers returning to work. Finally, parental leave and paternity leave will become a day-one right. Currently, one year’s service and 26 weeks’ service, respectively, are needed.

Statutory sick pay

The lower earnings limit and current waiting period of three days before SSP is paid will be removed so that SSP is available from the first day of sickness absence.

Protection from harassment

We have written about the new duty that comes into force on 26 October 2024, which requires employers to take reasonable steps to prevent sexual harassment of their workers.

The Bill extends this so that employers will be obliged to take all reasonable steps. Future legislation may also specify what constitutes reasonable steps, such as publishing plans or policies.

Protection from third-party harassment, which was removed from the Equality Act 2010 in 2013, will be reinstated.

Finally, sexual harassment disclosures will count as “qualifying disclosures” for whistleblowing purposes.

Collective redundancy

The obligation to collectively consult arises when 20 or more employees are dismissed “at one establishment.” The Bill makes it clear that the obligation will apply when the threshold is reached across the whole organisation, not at a particular establishment.

Equality at work

Large employers (over 250 employees) will be required to produce action plans on how to address their gender pay gaps and how they will support employees going through the menopause.

Industrial relations

The Bill contains numerous provisions, including an obligation on employers to provide workers with a written statement about their right to join a trade union. The Government will also repeal the previous Government’s trade union legislation, including the controversial (and never used) provisions relating to minimum service levels.

Enforcement

Currently, multiple enforcement bodies report to different Government departments, but a new Fair Work Agency will combine these.

What happens next?

The Bill did not refer to topics such as the right to “switch off” or ethnicity and disability pay gap reporting. These were mentioned in a separate document published on the same day that outlines the government’s longer-term plans.

The Bill’s second reading takes place on 21 October 2024. Various consultation exercises will take place throughout 2025, and we can expect a great deal of scrutiny of the Bill in the months ahead.

Read more:
A guide to the new Employment Rights Bill: What businesses need to know