New Employment Rights Bill: A Comprehensive Breakdown

We do not know the commencement date for this legislation as yet.

Zero hours contracts

The Employment Rights Bill introduces a right to guaranteed hours that reflects the hours worked over a “reference period”. There will be a requirement for employers to offer a guaranteed hours contract after the reference period, but the worker will not be required to accept this. In addition, reasonable notice will need to be given of any change to working hours and compensation may be due if a shift is cancelled, moved or curtailed at short notice.   

The Government have confirmed that where work is genuinely temporary, there will no expectation on employers to offer permanent contracts.

Flexible working

The right to request flexible working is already a day one right, but it was thought that the Employment Rights Bill would provide a wholesale change to flexible working, where this would become the default unless it was not reasonably feasible to accommodate the request. Instead, the Employment Rights Bill references there still being set grounds for rejecting a flexible working request, which are similar to those currently in place. In addition however, as well as stating the ground for refusing an application an employer will need to explain why they consider that it is reasonable to refuse the application on that ground or those grounds.

Statutory Sick Pay

The “waiting days” prior to SSP being payable for those entitled, mean that SSP is only available from the fourth day of sickness. These waiting days are to be removed and SSP will instead be payable from day one. In addition, the lower earnings limit that was applied when looking at eligibility for SSP will be removed. However, it is worth noting the Employment Rights Bill does set out a lower level of sick pay for lower earners.

Tips and gratuities

There will be a requirement for employers to consult with representatives of an independent trade union recognised by the employer in respect of a tips policy, or representative appointed or elected by those workers. If there are no such trade union or worker representatives, workers who are likely to be affected by the policy will need to be consulted with. However, the Bill does say that these provisions will be required “before producing the first version of the written policy for a place of business”.

Where there is a policy, the policy must be reviewed at least once during the period of three years beginning with the first day on which the first version of the policy is made available (including where that day precedes the coming into force this section of the ERB) and after that, not more than three years after the completion of the previous review. When employers undertake this review, they must consult with the persons identified in the paragraph above.

If consultation has been carried out as required by the ERB, then the employer must make a summary of the views expressed in the consultation available in anonymised form to all workers of the employer at the place of business.  

Parental leave

The qualifying period of being employed continuously for a period of not less than one year to take unpaid parental leave will be removed, so this becomes a day one right.

Paternity leave

The requirement to be employed for a period of not less than 26 weeks ending with the week immediately prior to the 14th week before the child’s expected week of childbirth will be removed, so that this becomes a day one right.

Bereavement leave

Parental bereavement leave will be replaced with wider bereavement leave provisions, which will be specified in future Regulations.

Employers to take all reasonable steps to prevent sexual harassment and third party harassment

You may remember that there was previously to be a requirement on employers to take “all” reasonable steps to prevent sexual harassment in the workplace. This didn’t make it into the final version of the legislation which is due to come into force on the 26th October, as this was deemed to be too onerous on employers. However, the Employment Rights Bill will now require employers to take “all” reasonable steps to prevent the sexual harassment of their employees. In addition, employer liability for harassment by third parties in relation to all relevant protected characteristics will be added back into the Equality Act, after this was repealed many years ago.

It appears that we will also see some Regulations which may specify steps that are to be regarded as “reasonable” for the purposes of determining if an employer has taken, or failed to take, all reasonable steps to prevent sexual harassment of an employee. Things that may be included in the Regulations will be carrying out assessments of a specified description; publishing plans or policies of a specified description; steps relating to the reporting of sexual harassment and steps relating to the handling of complaints.

In addition, when looking at protected disclosures, a disclosure which qualifies for protection will now include “that sexual harassment has occurred, is occurring or is likely to occur.”

Right not to be unfairly dismissed

The two year qualifying period needed to bring a claim for unfair dismissal will be removed, so that this will become a day one right. The Government have confirmed that this reform will take effect no sooner than Autumn 2026.

Where a dismissal takes place during an “initial period of employment” (or notice is given within that period and the effective date of termination falls within three months of the initial period of employment) and is for the reason of capability, conduct, statutory contravention or SOSR, then section 98(4) ERA which sets out when a dismissal may be fair, can be modified. This effectively means that the Bill will allow employers to operate probationary periods during which there will be a “lighter touch” process for employers to follow to dismiss an employee who is not right for the job. The Government’s preference is for the probation period to be for 9 months. However, the Government will consult “extensively” on this, and how a statutory probation period will interact with the ACAS Code of Practice on Disciplinary and Grievance procedures. They also plan to consult on what a compensation regime for successful claims during the probation period will be.

Dismissal during pregnancy

The Employment Rights Bill contains proposals to strengthen protections for pregnant employees and returning mothers. The timescale for the new mother protection are not set out, but it is expected that this will be six months after their return to work.

Fire and rehire

An employee will be regarded as having been automatically unfairly dismissed either if they are dismissed because the employer sought to vary the employee’s contract of employment and the employee did not agree to the variation or to enable the employer to recruit another person (or rehire the employee) under new terms but with substantially the same duties. There is an exception if an employer can show that the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business, and, in all the circumstances the employer could not reasonably have avoided the need to make the variation.

If any of these reasons are cited by an employer, “matters that must be considered in determining the question whether the dismissal is fair or unfair” including if any consultation has been carried out by the employer with the employee about varying the employee’s contract; if the employer carried out consultation with a recognised trade union or employees who had authority to be consulted on about the dismissal; anything offered to the employee by the employer in return for agreeing to the variation.

Collective redundancy consultation

The “Woolworths” case considered whether the obligation to collectively consult on redundancies is triggered when 20 or more employees are dismissed across an entire business or at individual establishments. The European Court of Justice ruled that the requirement for collective consultation applies when an employer proposes 20 or more redundancies within 90 days at one establishment, not across the entire business. The Employment Rights Bill now reverses this position, so that the collective redundancy threshold will apply across an entire business rather than at one establishment.  

Public sector outsourcing

The Procurement Act 2023 will be amended to protect transferring workers on outsourcing contracts, and those working alongside them. A two tier workforce code of practice will also be introduced for outsourced workers.

Equality Action Plans

Future Regulations may require employers with 250 employees or more to develop and publish an “equality action plan” to show the steps that they are taking with regard to gender equality. The steps that these employers may be required to take could include addressing the gender pay gap and supporting employees going through the menopause. The Regulations may make provision about the content of a plan, the form and manner in which a plan or information is to be published, when and how frequently a plan or information is to published or revised and the requirements for senior approval before a plan or information is published.   The Regulations may require the plan to be published no more frequently than at intervals of 12 months. 

School support staff

There are provisions contained in the Employment Rights Bill, for a School Support Staff Negotiating Body (SSNB) to be established.

Within the SSSNB’s remit will be the remuneration of school support staff; terms and conditions of employment of school support staff; the training of school support staff and career progression for school support staff. The Secretary of State will refer any of these matters to the SSSNB for consideration or the SSSNB may consider a matter within its remit without it being referred to them via the Secretary of State in certain instances.

School support staff will mean persons who are employed by a local education authority in England, the governing body of a school maintained by a local education authority in England, under a contract of employment providing for the person to work wholly at one or more schools maintained by a local education authority in England, or employed by the proprietor of an Academy under a contract of employment providing for the person to work wholly at one or more Academies. They must not be a qualified school teacher.

Adult Social Care Negotiating Body

The Secretary of State may by Regulations, provide for there to be a Adult Social Care Negotiating Body.

Trade Unions and industrial action

Written statements:

The Employment Rights Bill includes an obligation on employers to give a worker a written statement that the worker has a right to join a trade union, which must be given at the same time as the employer gives the worker their section 1 statement. With regard to the content of the statement, the Secretary of State may prescribe the information that must be included in the statement, the form which the statement must take and the manner in which the statement must be given. For the purposes of this obligation only, “worker” and “employer” have the same meaning.

Access agreements 

An access agreement will be an agreement between a listed trade union and employer which provides for access to a workplace by one or more officials of the union for “any of the access purposes”. The access purposes are to meet, represent, recruit or organise workers (whether or not they are member of a trade union) and to facilitate collective bargaining. The access purposes do not include organising industrial action. A listed trade union may give an employer a request for access to a workplace by one or more officials of the union for any of the access purposes. An employer will be able to give the union a notice agreeing with the request or disagreeing with the request (in whole or part). There will be a prescribed response period and a prescribed negotiating period. If agreement is not reached, then the Central Arbitration may then make a determination that officials of the union are or are not to have access to the workplace. The CAC may also become involved if any terms of the access agreement are not adhered to.

Conditions for trade union recognition

There will be a change in the percentage required for recognition. The requirement to show at the application stage that at least 50% of workers in the bargaining unit are likely to support recognition will be removed. There will also be power for the Secretary of State to reduce the requirement to show at the application stage that at least 10% of workers in the bargaining unit are members of the trade union. In addition, for the final ballot, if the majority of the workers voting support recognition, this will be sufficient for  recognition and the Union will be entitled to conduct collective bargaining on behalf of the bargaining unit.

Time off provided to trade union officials and learning representatives

An employer that permits an employee to take time off for carrying out trade union duties must where requested by the employee, provide the employee with accommodation and other facilities for carrying out the duties or undergoing the training for which the employee is taking time off for – this must be reasonable in the circumstances. An employee may present a complaint to an employment tribunal that an employer has failed to permit the employee to take time off or to provide the employee with facilities – the employer will need to demonstrate that the time off requested was unreasonable.

Time off for union equality representative

An employer must permit an employee who is a member of a trade union recognised by the employer and an equality representative of the trade union, to take time off during the employee’s working hours for the following purposes: carrying out activities for the purposes of promoting the value of equality in the workplace, arranging learning or training on matters relating to equality in the workplace, providing information, advice or support to qualifying members of the trade union in relation to matters relating to equality in the workplace, consulting with the employer on matters relating to equality in the workplace, obtaining and analysing information relating to equality in the workplace and preparing for any of these things.

These provisions will only apply where the trade union has given the employer notice that the employee is an equality representative of the union and the training condition is met in relation to the employee (the details of which are contained within Bill). The time off must be reasonable and the employer must again, provide the employee with accommodation and other facilities. A complaint can be presented to an employment tribunal if the employer has failed to permit the employee to take time off or provide the employee with facilities.

Repeal of provisions about minimum service levels  

Labour committed to repeal the “anti-strike” legislation, so it is unsurprising that the minimum service provisions will be repealed. By way of reminder this was a provision whereby minimum service levels were provided for during a strike in a “relevant services”.

Industrial action ballots

These will be simplified and workers will have protection from detriment for participating in lawful strike action. There will be consultation on what type of detriment should be prohibited.

Enforcement of labour market legislation

A new Fair Work Agency will be established which will deal with the enforcement of the National Minimum Wage, holiday pay, SSP and some aspects of modern slavery.  

Next steps

The Government have committed to publish a limited number of “targeted” consultations, where they will seek views on:

• The percentage replacement rate for those earning below the current flat rate of SSP.  

• How the provisions contained in the Employment Rights Bill around zero hours contracts can be appropriately applied to agency workers.

• How trade union laws can be updated so they are fit for the modern economy.

• How to deliver change to the current parental leave system.

• Employment status and a move towards a single status of “worker”.

• The removal of the cap of the protective award for compensation if an employer is found not to have properly followed the collective redundancy process.

Delivery of Make Work Pay Commitments via existing powers and non-legislative routes (Autumn 2024 onwards)

• There will be a Call for Evidence on unpaid internships by the end of the year.

• A working group will be launched where modern and secure electronic balloting for trade union statutory ballots will be examined. This will include cyber security experts and trade unions.

• The Government will “progress their commitment on paid travel time.”

• The Right to Switch Off will be taken forward through a Statutory Code of Practice.

• Removal of the age bands to “ensure every adult worker benefits from a genuine living wage.”

• Enacting the socio economic duty.

• Ensuring the Public Sector Equality Duty provisions cover all parties exercising public functions.

• Supporting workers with a terminal illness through the Dying to Work Charter.

Equality (Race and Disability) Bill (Autumn 2024 onwards)

There is a plan to extend the pay gap reporting to ethnicity and disability for employers with more than 250 staff; extend equal pay rights to protect workers suffering discrimination on the basis of race or disability; ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay; and implement a regulatory and enforcement unit for equal pay.

Longer term delivery (Autumn 2026 onwards)

• Parental leave review

• Carer’s Leave review

• Surveillance technologies and negotiations with trade unions and staff representatives

• Single “worker” status