The Employment Rights Bill, which was published on October 10, 2024, proposes to make significant changes to UK Employment Law, which will affect both employees and employers. It is said to be one of the most significant “overhauls” of UK Employment Law in decades.
Most of these reforms are set to be phased in over the coming years, allowing businesses time to evaluate their current policies and practices and try to get their workforce in order, ready for when the reforms are in effect. Kash Dosanjh, of leading Midlands law firm Wright Hassall, highlights some of the main proposed changes, their impact on employees and employers alike, and gives suggestions on how employers may wish to implement to make their transitions seamless and ensure their working practices are legally compliant.
Banning zero-hour contracts
Labour’s intention is to ban the use of “exploitative” zero-hours contracts. Workers will have a right to be offered guaranteed hours, based on the regular hours they work over a specific reference period, which is expected to be 12 weeks. However, workers can remain on zero-hour contracts should they wish to do so. Workers will also have the right to receive reasonable notice of a shift and the right to a compensation payment if a shift is cancelled or changed at short notice. These changes will allow employees to take charge of their schedule and decide whether they prefer flexible hours or a more stable schedule. It will also ensure some level of predictability with regards to their expected income. This is likely to improve job security and employee satisfaction, thus reducing staff turnover and absenteeism.
Businesses may need to adapt their practices, specifically those in certain industries that rely heavily on zero-hour contracts. Some small businesses utilise zero-hour contracts during peak seasons, whilst others, such as those in hospitality, utilise zero-hour contracts all year round. It is imperative that they are aware of this legal change and workers’ rights to in respect of their working hours. This is likely to result in an increased administrative burden for business and so businesses must ensure that they have the resources deal with this. Further, the financial burden on businesses will increase and so employers must review whether they are financially able to engage workers on a minimum number of hours.
Flexible Working
As more businesses try to phase their workforce back to pre-covid practices, employees will be ecstatic to know that flexible working is to become the default for employees. Employers can only refuse a flexible working request on limited grounds such as the burden of additional costs, detrimental effect on ability to meet customer demand and detrimental impact on performance, to name a few.
Flexible working fosters a culture of improved productivity, increased employee satisfaction and retention and allows a business to attract a wider talent pool and reduce overhead costs.
Most businesses are better equipped than they once were at operating a flexible work model, however, there are still some things a business will need to consider in the run up to when this right comes into effect such as:
- Ensuring adequate work coverage is in place for sectors that require on-site presence;
- Facilitate flexible and remote working by investing in appropriate technologies to enable employees to work productively;
- Ensure that home working, flexible working, data protection and cybersecurity handbook policies are up to date, setting clear expectations about performance and communication; and
- Consider shifting the focus from hours worked to deliverables achieved.
Unfair dismissal
Currently employees who consider that they have been unfairly dismissed need to have worked for their employer for at least two years before they can bring an unfair dismissal claim in the Employment Tribunal (subject to limited exceptions). This two-year limitation is to be removed, and employees will have the right to claim unfair dismissal from day one.
Consequently, the dismissal of any employee, regardless of their length of service will require employers to have a fair reason to dismiss the employee and they must follow a fair dismissal procedure.
This right will protect vulnerable workers, deter unethical practices, promote better practices when hiring workers and provide better job security for employees.
Further to this right coming into effect, it is likely that employers will deal with increased unfair dismissal claims The Government has proposed to bring in new statutory probation periods for companies, capped at 9 months, which will allow for a proposer assessment of an employee’s suitability for a role.
Despite this, employers may still feel that they have a reduced flexibility in managing terminations. This change will undeniably put additional HR and compliance burdens on employers, especially small businesses who may not have the legal knowledge or expertise to deal with complex employment law issues. They may wish to consult with an employment lawyer to ensure their practices are up to date, and compliant with the current legislation and how they can adjust ensure that they will be compliant with the upcoming legislation.
Sick Pay
Significantly, there will be a huge overhaul of the law relating to statutory sick pay (SSP). The three-day waiting period for SSP is expected to be scrapped, and so entitlement to SSP will now be from the first day of sickness absence, rather than the fourth. The earnings threshold (currently £123 per week) is expected to be removed.
This will provide a significant amount of financial support for lower-income workers who have no choice but to take sick leave when unwell. This could also lower the prevalence of workplace presenteeism. SSP is currently paid at £116.75 a week for up to 28 weeks.
Businesses will need to ensure that their internal processes are updated to ensure that workers and employees are paid SSP, as a minimum, from the first day of sickness. If any enhanced company sick pay policy is in force, then this will need to be factored in too.
Family Leave
We are expecting to see more generous provisions for family leave. There has been no mention of any reform to the law governing maternity leave and pay, however, we are expecting paternity leave and unpaid parental leave to become a day-one right. The Government has, however, promised a full review of all rights relating to different forms of parental leave. Employers are also expected to be required to have a formal policy for bereavement leave, which will be a huge benefit for workers who have sadly experienced a bereavement.
It is essential that businesses ensure that their policies are all up to date to ensure that they reflect current legislation once this comes into effect.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
