Further to our update earlier in the month, the Bill has now been published and is a staggering 158 pages long.

Referred to as “the most significant reforms to employment rights” – we have summarised the main points of the Bill below, to make it easier for you to jump to the sections most relevant to your business.

Key points to note now:

  • We don’t yet know when the provisions of the Bill will become law, but they won’t happen overnight. It is suspected that consultation on the provisions in the Bill will begin in 2025 and will take effect no earlier than 2026.
  • The ability to raise a claim for unfair dismissal will become a day one right, subject to a “lighter touch” process during initial / probationary periods.
  • It will be more difficult for employers to refuse flexible working requests – refusals will need to be more considered and justified.
  • Zero hours workers are to have more rights – re guaranteed hours and changes to working shifts.
  • Sick pay is to be more accessible
  • Employers will have an increased responsibility to prevent discrimination – requiring to take proactive steps and have an action plan in place.
  • Fire and rehire tactics will be more difficult or employers to use.
  • Trade Union rights are to be strengthened – eg. making recognition easier.
  • Many reforms have been omitted for now, such as: the right to switch off, a move toward a simpler two-tiered system for employment status and a review of the parental leave and carer leave systems.

 

In more detail:

  • Day One Rights

Unfair dismissal will become a day one right (where an employee has actually started work), as the Bill removes the current two-year qualifying period. However, note:

    • We do not yet know when this will come into force.
    • The Government intends to consult on, and introduce, a statutory “initial period of employment”, i.e. a probationary period. It is thought that this probationary period will be 9 months.
      • The Government intends to introduce “lighter touch” but “fair and proportionate” processes for dismissals during the probationary period, and where notice is given during the probationary period and expires after no more than 3 months.
      • Any dismissal for redundancy during the probationary period will be exempt from any “lighter touch” process.
    • A day one right for paternity leave and parental leave (for employees only) will be introduced.
    • A new right to bereavement leave will be established, with the Bill removing the word “parental” from “parental bereavement leave” (for employees only). Parental Bereavement Leave will remain at two weeks, whilst other Bereavement Leave will be limited to one week.
  • Flexibility
    • Employers will only be able to refuse flexible working requests on the basis that their reliance on one or more of the statutory grounds for refusal (which will be the same grounds already in the legislation) is reasonable, and they will have to set out in their response why the refusal is reasonable.
  • Zero Hours Workers
    • Employers will be obliged to offer zero-hours/low-hours workers a guaranteed hours contract at the end of a specified reference period (which is likely to be 12 hours).
    • Zero/low-hours workers will be required to be given reasonable notice of any changes to, curtailment, or cancellation of “qualifying shifts” (defined in the Bill).
    • They will also be entitled to proportionate compensation where certain shifts are cancelled or curtailed at short notice (to be further defined, with the Bill currently stating that short notice cannot be a period of more than 7 days) equal to the compensation they’d have earned had they worked the original shift.
    • Workers can make complaints to the employment tribunal within three months of any failure from their employer to provide reasonable notice/a compensatory payment for compensation, likely subject to a cap (further details to be confirmed).
  • Sick Pay
    • Sick pay waiting periods will be removed, meaning that employees will get sick pay from day one, not day four.
    • The lower earnings limit for statutory sick pay will be removed, meaning that even the lowest-earning employees will be entitled to sick pay.
    • SSP will be set as a percentage of pay, and will not be a set rate.
  • Discrimination
    • Employers with over 250 employees will be required to put in place “equality action plans” showing the steps they are taking in relation to gender equality, such as (i) addressing the gender pay gap and (ii) supporting employees going through menopause.
    • Employers will be required to take “all” reasonable steps to prevent sexual harassment (which will take the law in to force from 26th October this year a step further).
    • Employers will be liable for third-party harassment where (i) all reasonable steps are not taken to prevent third-party harassment or (ii) third-party harassment is permitted.
    • BUT note the new duty that will be in place from 26 October 2024, under S40A Equality Act 2010 – employers who don’t take reasonable steps (not all reasonable steps) to prevent third-party sexual harassment will be subject to an uplift of 25% to the compensation award. It is unclear how this wording will be compatible with the new duty to take “all” reasonable steps to prevent third party sexual harassment.
    • The disclosure of sexual harassment will be a qualifying disclosure.
    • The protections of expectant and new mothers will be bolstered (such as their dismissal will be restricted upon a return to work except for in certain, restricted circumstances).
  • Trade Unions
    • There will be a strengthening of the rights of trade unions, and of their members carrying out functions.
    • Provisions are to be put in place to remove unnecessary restrictions on trade unions, and a new framework will be put in place to enable trade unions to request physical access to the workplace.
    • Changes will be made to make it easier for unions to gain recognition. The Bill simplifies the statutory recognition process, and gives the Secretary of State the power to remove the barrier that 10% of workers in a bargaining unit need to be members to put in a recognition request, with the Bill allowing it to be made as low as 2%.
    • Where half the members in a bargaining unit are union members, recognition is to automatically be awarded.
    • Simple majority voting will also lead to recognition – the Bill removes the requirement for 40% of all workers to vote in support of recognition.
    • Employers will be required to inform employees that they have a right to join a trade union as part of their written statement of particulars of employment.
    • The Minimum Service Levels legislation will be repealed, which prevented agency workers from covering the duties of striking workers.
  • Enforcement
    • A single enforcement agency will be implemented, which will roll-up the current enforcement agencies, with it being responsible for enforcing labour market legislation.
    • The agency will have the right to inspect workplaces, issue fines/orders and assist employees in raising court proceedings, amongst other things.
    • The Bill gives the agency powers to administer penalties to those who commit any of the labour law offences covered in the Bill (i.e. a failure to pay holiday pay or minimum wage).
  • Fire and Rehire
    • Current fire and rehire practices will be restricted (not abolished, as was originally intended) with provisions being put in place to close loopholes that allow firms to engage in unscrupulous practices.
    • It will be automatically unfair to (i) dismiss an employee for failing to agree to a contractual variation, or (ii) replace the individual with someone, or re-engage them, to carry out substantially the same duties.
    • For such a dismissal to be lawful, employers will have to show (i) that the variation was to eliminate, prevent, or significantly reduce/mitigate financial difficulties it was facing at time, where such difficulties in the immediate future would have prevented them from carrying on the business as a going concern, and (ii) they could not have reasonably avoided the variation. This will be a very high threshold to meet, and it is thought that this will effectively outlaw the practice of dismissal and re-engagement.
    • Stricter penalties will apply to employers who breach their obligations regarding consultation on varying terms and conditions.
    • Additional measures will also be introduced relating to seafarer employment to ensure that a scandal like that of P&O Ferries is avoided.
  • Collective Redundancy
    • Provisions on collective redundancy will be strengthened, as the number of proposed redundancies (20 or more over a 90 day period) for collective consultation will no longer be limited to one establishment, and will apply across a whole business.
  • Pay
    • Minimum Wage to Rise – ahead of the Budget on 30 October 2024, the government announced it will raise the minimum wage from April 2025 as follows:
      • National living wage will increase from £11.44 to £12.21 an hour for those aged 21+ – this represents a 6.7% increase / £1,400 pay increase for eligible full-time workers.
      • Minimum wage for 18- to 20-year-olds will rise from £8.60 to £10 an hour – an increase of £2,500 per year.
    • The cost-of-living crisis will be addressed by provisions allowing the cost of living to be considered when setting minimum wage rates (and in July, the Low Pay Commission’s remit was adjusted to allow for this). “Discriminatory” age bands are also to be removed.
    • Pay and conditions in adult social care will be improved through a Fair Pay Agreement.

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The information contained in this article is for general use is not intended to be comprehensive or a replacement for obtaining specific legal advice about your situation. Using the information without consulting us or another professional adviser is at your own risk. McKee Campbell Morrison Ltd accept no responsibility and gives no representations or warranties, express or implied, that any of the information and materials on this site is complete, accurate or free from errors or omissions.