Employment Rights

Bill

The Employment Rights Bill is heralded as the biggest shake up of employment law for decades. Its provisions have posed some questions which Richard Gvero answers.

Q Does the Bill propose full unfair dismissal rights from Day One?

A Yes, subject to a statutory probation period of nine months during which there will be a relaxed regime for dismissal. There is no detail yet as to how the probation period will operate.

Q What other Day One rights are proposed?

A

Paternity and parental leave will become Day One entitlements for eligible employees. Statutory Sick Pay entitlement will also arise on the first day of illness.

Q Are zero hours contracts being banned?

A No, but it is proposed that employers will be obliged to offer to the employee a permanent contract reflecting or guaranteeing hours worked over a reference period, which is currently suggested should be 12 weeks. Employees can opt to stick with a zero hours arrangement if the flexibility suits them.

If not accepted, employers are required to repeat the offer at the end of each reference period (until accepted). Zero hours workers will also be entitled to reasonable notice and compensation should the employer wish to change hours or cancel shifts.

Q What is happening to the “fire and rehire” approach so favoured by some big employers?

A The Bill proposes that the dismissal of an employee for refusing to a unilateral change to their employment terms will be automatically unfair.

However, the Bill includes a limited exception so that if the business can show a genuine need for the change to avoid serious financial issues, it may be possible to justify the change. There would need to be extensive consultation in that event.

Q Does the Bill propose reintroducing employer liability for third party sexual harassment?

A Yes, it does and indeed, the duty will relate not just to sexual harassment but harassment in relation to all protected characteristics, including race, age and disability.

Q Does the Bill propose a single worker status removing the unclear distinction between employees and workers?

A No, although this had previously been indicated as a likely change, it does not appear in the Bill but is expected to resurface in the future being consistent with the Government’s overall approach to workers’ rights.

Q When is the Bill likely to become law?

A

The Bill is currently passing through Parliament and is subject to consultation. The Government has published supporting guidance called “Next Steps to Make Work Pay” which indicate that the Bill is unlikely to become law until 2026 and the enhanced unfair dismissal rights not until the autumn of that year.

Q What steps, if any, should a business take in preparation for the Bill becoming law?

A

Given the Government’s strong majority, most of the provisions of the Bill are likely to become law. Once we are clearer as to how the new law will look, it will be sensible to review employment contracts, policies and processes to ensure that your business is compliant once the Bill becomes law.