Employment Update
“Make Work Pay” – Introduction of the new Employment Rights Bill
Today the Government introduced its long-awaited Employment Rights Bill, perceived by many to be the biggest shake-up of employment law for a generation. The bill proposes 28 employment law reforms. Below we set out some of the key proposed changes and highlights for businesses.
Day one rights
Protection from unfair dismissal will be available from day one on the job for all employees. Employers will be able to fairly dismiss employees during an "initial period of employment" providing a straightforward procedure is followed (although note, this will not apply to redundancy dismissals). The duration of the initial period of employment is to be specifically consulted on but the Government has indicated its preference for it to be nine months. Written reasons for any dismissal will need to be provided.
In addition to unfair dismissal, paternity, and parental leave will be available from day one, as well as a new entitlement to one week's bereavement leave.
Flexible working
An employer’s decision to refuse a flexible working request for one of the eight prescribed statutory reasons must be “reasonable” and the employer must also provide an explanation as to why it is reasonable. Contrary to what has been reported in the press, employees would not have a “default right” to work flexibly but we do anticipate the numbers of flexible working requests (and associated disputes) to increase in the future.
Third party harassment
Employers will be obligated not to permit harassment of their workers by third parties and will be liable for the same. This applies to all forms of harassment (not just sexual harassment).
Sexual harassment
As we previously noted, from 26 October 2024, employers will have a new duty to take reasonable steps to prevent sexual harassment of workers. Under the proposed Bill, employers will have an increased duty to take all reasonable steps to prevent sexual harassment of their workers.
Ending 'Fire and Rehire' and 'Fire and Replace'
It will be (in almost all cases) automatically unfair to dismiss an employee for refusing to agree to a variation in their contractual terms, if the intention of the employer is to then re-engage them on the varied terms, or employ someone else to replace them on the varied terms.
In effect, this brings an end to the so-called practice of “Fire and Rehire / Replace”. However, such dismissals may be permitted where, following extensive consultation, the reason for the variation is to rescue the business from serious financial difficulties.
Banning zero-hour contracts
Workers will have a right to a contract that reflects the number of hours they regularly work and a right to receive reasonable notice of any changes in shifts, with proportionate compensation for any shifts cancelled or curtailed at short notice.
Strengthening Statutory Sick Pay
The existing waiting period (i.e. that sick pay is not payable until the fourth day of absence) and the minimum earnings threshold (currently £123 per week) for statutory sick pay will be removed, making statutory sick pay available to all workers from day one.
Strengthening protections for new mothers
It will be unlawful to dismiss a woman who is pregnant; has had a baby whilst on maternity leave; or is within six months of her return to work following maternity leave; except in specific circumstances which are not yet provided for in the regulations. The Bill confirms this protection will also be available to those on adoption leave.
Establishment of a new Single Enforcement Body
A new enforcement agency, the Fair Work Agency, will have the power to enforce workplace rights. The Government press release highlights holiday pay as an example. It is possible that there will be a crackdown on businesses who regularly pay commission, overtime and other payments intrinsically linked to employment duties, but do not factor these payments into statutory holiday pay.
Exclusions from the Draft Bill
A number of notable manifesto pledges have been postponed until later in Parliament and the Government has published a “Next Steps” document outlining potential future reforms. Interestingly, the Government has postponed plans to create a single status of “worker”, expand the Equality (Race and Disability) Bill to make it mandatory for large employers to report their ethnicity and disability pay gap, and give employees a formal “right to switch off” (although the latter is likely to be covered under a statutory Code of Practice rather than through legislation).