OCTOBER 2024 – UNITED KINGDOM
EMPLOYMENT RIGHTS BILL 2024
It is important that employers note the following:
Employment Rights Bill 2024
On 10 October 2024 the government published the Employment Rights Bill 2024 presented by Labour Government’s Prime Minister Sir Keir Stamer. The bill, namely Bill 11 of the 2024-25 parliamentary session, is the first phase of delivering the Labour Party’s Plan to Make Work Pay.
This bill will support employers, workers and unions to get Britain moving forward and fulfilling a commitment to introduce legislation within 100 days.
First, it is important to review some aspects of Labour’s Plan to Make Work Pay that may be introduced later or are omitted from the bill, including:
- Right to disconnect: The government will propose limitations for the employer’s ability to contact employees outside the scope of working through the Statutory Code of Practice instead of introducing the regulation through legislation.
- Equal pay: The bill does not address equal pay discrepancies or require companies to report on workplace pay gaps. Instead, Labour plans to expand the current equal pay regulations to include disability and race through a separate bill, the Equality (Race and Disability) Bill, which is still in the works. This upcoming bill may also make it mandatory for companies to disclose pay disparities related to these characteristics.
- Employment status: The government’s plan to merge “employees” and “workers” into a two-tier system of “workers” and “self-employed” has been delayed for further consultation and will not be included in the initial reforms.
Lastly, reviews of parental leave, carers leave and transfer of undertakings (protection of employment) regulations (TUPE), which are outside of the scope of the bill, will be addressed briefly in the Next Steps policy paper.
The bill, which will now progress through the UK Parliament and may undergo changes along the way, summarises significant proposed reforms in key areas that will impact employers. These include:
Claim unfair dismissal from day one
The bill proposes to remove the two-year waiting period for unfair dismissal claims, allowing employees to access employment tribunals from day one. This means employers must have a fair reason and follow a fair process for any dismissal, regardless of service length.
A probationary period will be introduced in the next phase, allowing a “light touch” dismissal process. A consultation will determine the details of this process, aligning with the Advisory, Conciliation and Arbitration Service (ACAS) Code. The government is considering a nine-month statutory probation and possible limits on compensation for claims made during this time.
Zero-hours contracts
The bill aims to allow workers on zero-hour or low-hour contracts to switch to contracts reflecting their actual hours worked, based on a 12-week reference period. Employers must give reasonable notice for shift changes and offer compensation for cancelled or reduced shifts. Further consultation will clarify details such as the definition of “low hours” and how the regulations will apply to agency workers.
Fire and rehire/Fire and replace
The bill will restrict the use of “fire and rehire” to change employee terms, making it automatically unfair to dismiss workers for refusing contract changes. This practice will only be allowed in limited cases, such as to avoid serious financial risks to the business.
Collective redundancy
The bill will require collective consultation for redundancies involving 20 or more employees across an entire organisation, not just specific sites. It also proposes removing the limit on the protective award for failing to follow consultation procedures, currently capped at 90 days’ pay. A public consultation will be held on these proposals.
Trade union rights
The bill intends to modernise trade union rights and reduce conflict around industrial action. These measures include:
- New employees will receive information about their trade union rights in their Section 1 statement (a statement required by the Employment Rights Act setting out the basics of the employment relationship, usually contained with other terms within in a contract or letter of engagement).
- Trade union representatives will gain new workplace access rights.
- Processes for trade union recognition will be made easier.
- Strike ballots and picketing processes will be simplified.
Protections against dismissal for participating in industrial action will be expanded to cover any loss. The bill will also remove restrictions on strikes in public services, restoring full rights to strike.
Flexible working hours
Starting 6 April 2024, all employees can request flexible working from day one. The bill makes flexible work the default unless employers provide written justification, as per legislation, for why it’s not feasible. The penalty for breaching flexible working rights remains at eight weeks’ pay.
Other key policy developments include:
- Day 1 rights: The bill proposes that unpaid parental leave, paternity leave and sick pay will all be available from first day of employment.
- Statutory Sick Pay (SSP): Employees are eligible for SSP from the first day of employment, removing the current waiting period of three days before becoming entitled to SSP. The lower earnings limit will be removed, so very low earners will also qualify for SSP.
- Bereavement leave: The bill proposes a new statutory bereavement leave scheme which will apply to all employees and not only to parents who have lost a child as per current legislation.
- Protection against sexual harassment: The bill, part of the Worker Protection Act effective 26 October 2024, introduces measures to strengthen employer responsibility in preventing sexual harassment. It enhances worker protections by making sexual harassment reports a protected form of whistleblowing and restores full protection against third-party harassment.
- Extension of maternity protections: The bill enhances maternity protection by granting employees maternity pay from their first day of employment and extending the prohibition on dismissals for new mothers to six months following their return to work.
- Equality action plan: The bill further proposes future regulations may require employers with more than 250 employees to produce equality action plans addressing the gender pay gap and supporting employees through the menopause.
- The Fair Work Agency: The bill seeks to establish a new single agency for the enforcement of the statutory employment law rights. It is intended to bring together existing functions relating to the enforcement of employment agency rules to enforce the national minimum wage (NMW) and the SSP and modern slavery issues.
- Fair pay agreements: The bill includes provisions for introducing sector-wide collective bargaining for school support staff and workers in adult social care which could determine pay and other terms and conditions for workers in these sectors.
In closing, it is important to remember that the Employment Rights Bill must be passed by both the House of Commons and the House of Lords before it becomes law. Consequently, some parts may be revised, reduced in scope or even eliminated altogether. No specific implementation date is set, and it’s likely the legislation will be introduced in stages, with different parts coming into effect at various times.
To view the Employment Rights Bill, 2024, follow the link.
