The Employment Rights Bill and how it impacts your organisation

Written by Alex Hurt, solicitor in our Employment and HR services team.

The government has unveiled significant changes in employment law through the much-anticipated Employment Rights Bill. Introduced on October 10th, the Bill outlines 28 individual reforms that could reshape employment rights in the UK, including critical provisions around zero-hour contracts, ‘fire and rehire’ practices, and protections against unfair dismissal from the very first day of employment.

For the housing sector, where flexible staffing models and temporary contracts are often essential, these reforms are set to bring new challenges and risks. Many of these changes could affect how housing providers recruit, manage, and retain their teams, with a number of implications for part-time and flexible roles in this sector.

Key reforms in the Employment Rights Bill

The Employment Rights Bill seeks to address a wide range of employment issues. Here are some of the core provisions that could impact housing organizations:

Day-one right to claim unfair dismissal

Currently, employees need two years of continuous service to qualify for unfair dismissal protection. This Bill aims to make unfair dismissal a right from the first day of employment. For housing providers, this could mean a review of hiring practices, as teams need to be sure of new hires sooner than before. A maximum nine-month statutory probation period, subject to consultation, could give employers a limited window to assess fit before the full protections kick in.

Ending fire and rehire practices

Numerous controversies around ‘fire and rehire’ tactics have led to this proposed ban. Under the new regulations, employers would be prevented from dismissing employees and rehiring them on less favourable terms. This will likely impact any restructuring processes, encouraging housing associations and contractors to seek other avenues for cost reduction or role adjustment.

Moving away from zero-hour contracts

Zero-hour contracts, often seen in roles that require flexibility, are under scrutiny. The Bill proposes that workers on zero-hour or low-hour contracts who maintain regular hours for a defined period will be entitled to a guaranteed-hours contract. For housing organizations, this could reduce the flexibility in roles that vary in demand, such as maintenance support or community services, and may lead to greater reliance on part-time or fixed-term contracts.

Improving flexible working rights

By making flexible working the default option where practical, the Bill could reshape how housing sector employers structure roles, particularly in non-operational functions. Flexible working has become an increasingly attractive option, and under these new reforms, housing providers may need to accommodate more remote work options or adjust shifts to align with these default flexible work conditions.

Enhanced protections for new and expecting parents

The Bill also extends protections for pregnant employees and new mothers, covering the period of pregnancy, maternity leave, and six months post-return to work. This measure may mean that housing employers will need to carefully plan for potential staffing adjustments to cover these protected periods.

Minimum wage and statutory sick pay adjustments

The Bill proposes tackling the cost-of-living crisis by addressing minimum wage rates based on factors beyond age, as well as removing minimum earning thresholds and waiting periods for statutory sick pay. For housing providers managing tight budgets, these changes could influence salary and benefit structures across teams, especially among lower-paid roles.

New enforcement body: The fair work agency

The introduction of a Fair Work Agency is a key feature of the Bill, with this body combining existing powers to enforce rights like holiday pay. Housing providers may see increased scrutiny around employment practices, prompting more proactive compliance checks to avoid potential penalties.

Employment Rights Bill: Second reading

The Employment Rights Bill returned to the House of Commons to have its second reading on 21 October 2024. Whilst speaking in Parliament the Deputy Prime Minister announced that under the landmark bill “almost 9 million employees will benefit from protection against unfair dismissal from day one”.

Alongside the second reading numerous consultations were published including:

• Collective redundancies: This consultation will explore proposals to change the current cap on the protective award and increase the minimum consultation period for the largest scale redundancies.
• Zero hours contracts & agency workers: The government’s analysis shows that 2.4 million people in the UK work irregular patterns like zero or low hours contracts or agency workers. This consultation will look at how to extend the protections in the Bill for these workers.
• Statutory sick pay: This consultation is looking to review the options for calculating the appropriate reduced rate for lower earners.

Future plans – Employment reforms on the horizon

Beyond the Employment Rights Bill, the government has announced a broader vision with the ‘Plan to Make Work Pay,’ including upcoming reforms that will be of interest to housing sector leaders.

Two-tier employment status framework

A significant reform could involve moving from the current three-tier employment status (employee, worker, self-employed) to a simplified two-tier system. This shift would directly impact employment classifications and benefits, likely necessitating policy adjustments within housing sector organizations.

The right to switch off

Another forward-looking measure is the proposed ‘right to switch off,’ which would limit employers’ ability to contact employees outside of their working hours, except in emergencies. Given the occasional around-the-clock nature of housing support, this could impact on-call roles and require adjustments in communication practices.

Reporting on ethnicity and disability pay gaps

Expanding the Equality (Race and Disparity) Bill to include ethnicity and disability pay gap reporting is a further step toward transparency. Housing sector employers would need to gather data and implement any changes to address discrepancies in pay, ensuring an equitable approach across all roles.

What this means for the housing sector

These proposed reforms represent some of the most significant shifts in employment law for years. For the housing sector, where a mix of full-time, part-time, and temporary staff is often essential, the Bill may require adjustments to current employment practices. With enhanced rights and protections for employees, housing providers might find it beneficial to conduct a full employment law audit to ensure readiness for these changes.

As consultations unfold, housing organisations should stay informed about the evolving landscape of employment law. We remain committed to helping sector leaders navigate these changes with insights and guidance tailored to the unique needs of housing providers. We’ll continue to monitor these developments closely and provide updates as further details emerge.