What will this mean for both employers and employees?
Between 2010 and 2024 there was relatively little new employment legislation, with most key laws, such as the Employment Rights Act 1996, dating from the 1990s.
More recently, there have been many private members’ bills introduced on various aspects of employment law. Many of these, on topics such as banning fire and rehire, regulating zero hours contracts or protecting pregnant employees from redundancy, did not make it through to a second reading. Others, such as the Parental Bereavement (Leave and Pay) Act 2018, became law in April 2020.
Substantial adverse effect means more than just a minor impact on a person’s life or how they can do things but which may fluctuate or change and may not happen all the time.
More recently, during the 2022-23 parliamentary session, a series of seven private members’ bills, all with government support, passed and became law, on topics including tipping, redundancy protections, family leave, flexible working and protection from sexual harassment at work.
Described as the biggest set of proposed reforms to workers’ rights in a generation, the Employment Rights Bill (“the Bill”), introduced to parliament on the 10 October 2024, will deliver the key legislative reforms set out in the Government’s Plan to Make Work Pay. The Bill is due to make several key changes including:
- protection from harassment
- fire and re-hire
- day one rights
- flexible working
- zero-hour contracts
The majority of the proposed reforms are expected to come into force in Autumn 2026. We shall explore some of the key ones below.
Day One Rights for Unfair Dismissal
Employees will have the right to claim unfair dismissal against their employer from day one. Currently in order to qualify for unfair dismissal rights an employee would need to have two years continuous service with their employer on the effective date of dismissal to bring a claim.
Under this new law, Employers will still be able to dismiss employees if they follow a fair and transparent process.
There will also be the introduction of a new statutory probation period for new employees hired that start their role after the new law comes into force. Employers will be able to introduce a 9-month probationary period to the usual 3 or 6 month period that already exists. This will allow Employers to properly assess the employee’s suitability for a role.
The introduction of the new probationary period will give employers more time to dismiss employees through this route without the need to go down the formal process and reassure employees that they have rights from day one.
Protection from Harassment – A ‘Preventative’ Duty
The Employment Rights Bill introduces a new preventative duty for employers to take all reasonable steps to prevent the harassment of their staff, on the grounds of any protected characteristic, by third parties.
Employers will need to take reasonable steps of adopting robust policies and procedures to prevent sexual harassment of workers in the course of their employment. If sexual harassment has taken place, employers will need to take action to stop it happening again. Employers will need to show the specific measures they have put in place to comply with the new duty and will therefore need to anticipate the risk of employees being sexually harassed by third parties as part of their risk assessment to avoid breaching the new duty.
Employers can only be held liable under the proposed changes if they fail to take reasonable steps to prevent the harassment.
Flexible Working
Employees will be able to make two flexible working requests rather than one in any 12-month period. Employers will need to respond to requests within two months rather than the original three. They will also have to explain the reasons for denying any requests, but employees will no longer need to explain the impact of their request.
The list of reasons employers can use to deny requests will remain the same. For example, employers will still be able to deny requests on factors such as cost to the business and impact on ability to meet customer needs etc.
The government is also introducing the “right to switch off” which will provide workers with the right to disconnect from work outside of working hours and not to be contacted by their employer so that homes do not become 24/7 offices.
Fire and Re-hire & Zero Hour Contracts
Zero-hour contracts also known as casual contracts is a type of contract that doesn’t guarantee any set number of working hours.
The introduction of Employment Rights Bill will give workers the right to a contract reflecting the number of hours they regularly work.
The main proposed changes will put obligations on the employer to:
- offer the employee guaranteed hours if they work regular hours over a defined period
- provide employees with reasonable notice of their shifts and changes affecting their shifts
- provide a proportion of pay to an employee for any shift which is cancelled or moved at short notice.
‘Fire and rehire’ refers to when an employer dismisses an employee and then rehires them on new terms. The new provisions will make it unfair to dismiss an employee where the reason for the dismissal is that an employee did not agree to an employer’s requested variation to their employment contract terms.
Other proposals
The Bill in total introduces 28 reforms to employment law:
- changes to paternity and parental leave – both will become day one rights removing the 26 weeks qualifying requirement
- a new unpaid leave entitlement for carers from day one of their employment
- Statutory sick pay will be strengthened by removing the lower earnings limit and removing the waiting period
Justin Madders, appointed Parliamentary Under-Secretary of State at the Department for Business and Trade on 9 July 2024, said:
“This bill will support employers, workers, and unions to get Britain moving forward and fulfilling a commitment to introduce legislation within 100 days. It will also update and modernise the legislative framework in relation to employment rights”.
The new bill brings substantial changes to the employment sector and will significantly impact not only employers and employees alike, but also the advice legal professionals provide.
