Announcing the Employment Rights Bill

Written by Alex Hurt, Solicitor in our Employment Law department.

The government has revealed their long-awaited labour reform plans through the publishing of The Employment Rights Bill.

The Bill itself introduces a total of 28 individual employment law reforms covering changes on zero-hour contracts, ‘fire and rehire’ practices, as well as providing protection from unfair dismissal on day one of employment for all employees.

These wide-ranging changes come after Labour today issued a press release outlining, what it believes to be, “the most significant reforms to employment rights.”

The announcement

The government has revealed that the bill will look to:

• Make unfair dismissal a ‘day one’ right – The law currently requires employees to have two years continuous service prior to qualifying for the right to claim unfair dismissal. This potential reform is accompanied by a maximum nine-month statutory probation period (which is to be consulted on) to allow employers to assess new hires prior to qualifying for the right
• Put an end to fire and rehire practices
• End zero-hour contracts which are deemed to be ‘exploitative’ – now, should those on zero and low hours contracts work regular hours over a defined period, they will be given the right to a guaranteed hours contract
• Tackle the cost of living when establishing the minimum wage rate and removing the current age bands
• Remove the requisite three-day waiting period and lower earnings limits for statutory sick pay
• Improve flexible working by making it the default for workplaces where it is practical to do so
• Increase protections for pregnant women and new mothers by extending their protection from dismissal during pregnancy, while on maternity leave and within six months of returning to work
• Repeal the Minimum Service Levels legislation relating to strike action, which was introduced by the previous Conservative government
• Introduce rights to paternity, unpaid paternal and bereavement leave from day one
• Bring in a new enforcement agency, the Fair Work Agency, which will combine existing enforcement power and enforce rights such as holiday pay

In terms of the most significant reforms, the changes which potentially pose the greatest departure from the status quo for employers include the introduction of:

1. Making it automatically unfair to dismiss an employee for refusing a contract variation. There will only be a very limited exception for employers should there be a genuine need to avoid financial difficulties. In any event making such a variation would require full consultation by the employer with the employee
2. Full liability for third party harassment

Future plans – The ‘plan to make work pay’

It has been announced by Lucy Powell, the Leader of the House of Commons, that the second reading of the Employment Rights Bill will be on the 21st of October 2024.

The government has also announced that it will publish a ‘next steps’ document which will highlight the reforms it is looking to bring further into the future. Following a period of consultation these future reforms will look to include:

• The significant step of moving to a two-tier framework for employment status. Employment status under current legislation operates under a three-tier framework with individuals classified either as an employee, a worker or a self-employed contractor.
• The ‘right to switch off’, restricting an employer’s ability to contact employees outside of their regular working hours barring exceptional circumstances.
• A requirement for larger employers to report their ethnicity and disability pay gap as part of an expansion to the Equality (Race and Disparity) Bill.
• Further reviews of the parental leave and carers leave systems.

With the introduction of these sweeping reforms, we are anticipating significant changes for employers and individuals alike.

We will continue to provide further updates as more details come to light and the consultation process unfolds.