The Employment Rights Bill 2024

When the Labour Government came into power in July 2024, they pledged to introduce significant new legislation within 100 days (by 12 October 2024). The Employment Rights Bill (“the Bill”) was published on 10 October 2024 and some of the key changes in the Bill are summarised below.

There will be consultation on the Employment Rights Bill with trade unions and employer representatives before the Bill will be finalised. The Government doesn’t anticipate starting consultation until 2025, with the result that most reforms in the Bill will not take effect until at least 2026.

The Employment Rights Bill fails to mention some topics which were mentioned in the Labour Governments “Making Work Pay” Paper, including: a framework of single status worker, , the right to switch off and reviews of the parental and carer leave framework.

Dismissal

1. Unfair Dismissal
Unfair dismissal will be a day one right for employees. Currently the law ensures that an employee must have worked continuously for 2 years in order to bring an unfair dismissal claim.

It has been suggested that this new legislation will ensure that 9 million individuals in the UK will inherit new unfair dismissal rights which may be a concern for both Employers and Employment Tribunals.

There will be an initial period (probationary period) during which an employee will not yet benefit from full unfair dismissal protection. The duration of this period is not yet confirmed although this could potentially be up to nine months. It is not clear how the period will operate, although one likely outcome is that employers will need to follow a set process, potentially contained within a code of practice. The process needed to lawfully dismiss during the probationary period will be less than that required for any employee who has completed the period although it is likely to involve significant steps including a meeting and written reasons for termination.

2. Collective redundancy
It has previously been decided from case law that collective consultation applies in situations where an employer suggests making 20 or more redundancies over a period of 90 days within one establishment (for example, one site or one office). The Bill now ensures that when an employer is proposing making 20 or more redundancies, it is the number of redundancies considered across the whole business (i.e. across all sites or all offices) which is relevant to whether collective redundancy is applicable. Following the implementation of the Bill, collective redundancies will be more common.

3. Fire and Re-hire
Notably, the Bill will ensure it is automatically unfair to dismiss an employee due to the principal reason being that they reject the proposal to vary the terms and conditions of their employment contract. Similarly, it will be automatically unfair if the employer dismisses the employee and then re-hires the employee (or recruits another individual) under new terms of employment with substantially the same role and duties.

There is an exception which the employer could rely on whereby the termination and re-engagement and the variation of the individual’s contract is essential due to the financial instability of the organisation. In practice this exception will be extremely difficult to rely on.

4. Protection for pregnant and new mothers
There is a proposal within the legislation that there will be increased protection given to those who are pregnant and those who are new mothers. The individual will have enhanced protection from dismissal during pregnancy, and for new mothers for a specific period after returning from leave.

Employment Terms and Conditions

5. Exploitative zero-hour contracts
The Bill proposes to end exploitative zero-hour contracts. The guaranteed hours provision applies to zero hours contracts and minimum hours contracts. This ensures if employees are on zero-hour contracts, or minimum hour contract, they must be offered a contract to guarantee the worker a minimum hour contract.

6. “S1 Statements”
Under section 1 of the Employment Rights Act, employers are required to provide their workers and employees with a written statement of particulars of employment. The new Bill will require the statement to include reference to the fact the individual has a right to join a trade union.

7. Flexible working
Currently employees can make up to 2 applications per year to request flexible working arrangements. Employers are permitted to refuse the requests in accordance with one of the eight statutory provisions. Following the implementation on the proposals for Flexible Working, employers will now have to clarify (a) the reason(s) for any refusal of the application and (b) explain why their refusal on such ground (or grounds) is reasonable. Breaching these regulations, as per the current legislation, could lead to employers being liable for up to 8 weeks’ pay to the employee.

8. Paternity leave and Parental leave
Both paternity leave and parental leave will be day one rights under the Bill.

9. Bereavement leave
This statutory right is expanded to any individual who is bereaved. There is detail yet to be clarified in further statutory instruments as to the required relationship with the employee to qualify for this leave. If the bereavement leave relates to the death of a child, bereavement leave is a 2 week period, and for someone who is not a child, is one week. If more than one person has died, the individual is entitled to “leave in respect of each person.”

10. Statutory sick pay
Currently employees need to work 3 days before they gain entitlement to statutory sick pay. When the Bill is implemented, this 3-day qualifying period will not apply and payment will be available at the first point of sickness, regardless of their length of service. The lower earnings threshold will also be removed.

Equality

11. Duty to prevent third party Sexual Harassment
From 26 October 2024, employers have a duty to prevent third party sexual harassment.

Under the Bill, employers should take “all” reasonable steps to prevent sexual harassment of its staff by third parties. This can include for example, clients and customers. The requirement to take “all” reasonable steps is an onerous obligation on employers.

In the event an employer fails to take reasonable steps in accordance with this duty, the compensation awarded can be increased by up to 25%. Employers may wish to consider taking practical steps, for example undertaking risk assessments and creating, reviewing and circulating all policies and procedures.

12. Gender pay gap and menopause
There will be a heightened burden on employers with over 250 employers. There will be a requirement for them to have equality action plans in place relating to, for example, gender pay and providing support for individuals going through menopause.