Welcome to the Autumn Employment Law Update. The Employment Law Update provides the legal notices that HR Professionals need to be kept aware of. If you want to ensure you don’t miss the latest Employment and HR you can subscribe to our Employment Law Update Newsletter.
October 2024 has seen the introduction of the highly anticipated Employment Rights Bill. The Bill includes 119 clauses set out over 158 pages. The Bill has been described by the Government as “pro-worker, pro-business”. In this employment law update, we discuss the key employment law changes proposed by the draft Bill.
Later in this employment law update, we discuss the new duty to prevent sexual harassment, which came into force on 26 October 2024.
The Employment Rights Bill
One important thing to note before we delve into the changes is that implementation of these reforms will take time. Before becoming law, the Bill will need to be considered and passed by both the House of Commons and the House of Lords. Currently, the Bill has passed through its second reading and is now at committee stage.
It is likely that implementation will be staggered with various aspects being brought into effect at different times. In the Government’s “Next Steps” document which was released alongside the Bill they have confirmed that “the majority of reforms will take effect no earlier than 2026. Reforms of unfair dismissal will take effect no sooner than autumn 2026.”
There are three significant changes which the Bill proposes, these are set out below. Following which is set out the other less significant but nevertheless notable changes.
Unfair dismissal
Currently with a few exceptions like whistleblowing dismissals, and discriminatory dismissals, an employee cannot bring a claim of ordinary unfair dismissal until they have 2 years of service.
Under the new Employment Rights Bill, the qualifying period will be removed meaning Employees will have the right to claim unfair dismissal from day one, as long as they’ve started work.
There will be a new statutory probationary period, the duration of which will be subject to consultation. Rumours suggest that the Government favours a nine-month period. During this period, a “lighter-touch process” can be followed. Nevertheless, even during the statutory probation period, employers will need to show that the reason for the dismissal is either for conduct, capability, illegality or some other substantial reason. Notably, this list does not include redundancy.
“Fire and Rehire”
There has been lots of debate surrounding fire and rehire practices in recent years, especially off the back of the P&O cruises scandal in 2022 which saw 800 workers dismissed and replaced by workers to do their roles on much less favourable terms.
This scandal prompted the UK’s first Statutory Code of Practice on ‘Dismissal and Re-engagement’ which came into effect in July 2024. The Code imposes expected procedures on employers wishing to use ‘fire and rehire’. The Code demonstrates that ‘fire and rehire’ should be a last resort following meaningful consultation with employees or their representatives. Labour have argued that the code of practice does not go far enough.
Currently provided it is handled correctly, fire and rehire is not unlawful.
Under the Employment Rights Bill, any dismissal will be automatically unfair if the principal reason for dismissal is either that the employee refused to agree to a variation of contract sought by the employer, or to enable the employer to recruit another person (or rehire the employee) under new terms but with substantially the same duties.
There will be only one exception which will be a very high threshold and therefore a hard defence to run. The exception will be that fire and rehire is the only option in order to prevent total business collapse.
Collective Redundancies
Currently employers must hold collective consultation where they are proposing 20 or more redundancies; the redundancies are in a single establishment; and they propose to make the redundancies within a 90-day period.
Where an employer proposes to make between 20-99 redundancies, they must engage in a 30 day collective consultation period. Where more than 100 redundancies are proposed, the collective consultation period increases to a 45 day period. During collective consultation employers must consult with trade union if recognised and/or employee representatives.
Under the Employment Rights Bill, reference to a single establishment will be removed. Meaning that redundancies held simultaneously in different locations of an organisation would be caught by the collective redundancy provisions.
Parental Leave
Currently employees qualify for parental leave after 1 years’ service. Parental Leave is unpaid and an employee is entitled to 18 weeks’ of parental leave for each child, up to the child’s 18th birthday (limited to a maximum of 4 weeks per year for each child).
Under the Employment Rights Bill, employees will have the right to take Parental Leave from day one of their employment.
Paternity leave
Currently employees qualify for paternity leave after 26 weeks’ service. Employees are entitled to take 2 weeks of leave which, subject to the April 2024 changes, can now be taken as a block or as 2 separate blocks of a week each. Paternity leave should be taken within the first 52 weeks after the birth.
Under the Employment Rights Bill, employees will have the right to take Parental Leave from day one of their employment.
Bereavement Leave
Currently, employees have a statutory right to 2 weeks of parental bereavement leave if their child dies. If an employee loses a loved one and the person who dies is not a child or dependant, there’s no legal right to time off.
Under the Employment Rights Bill, the entitlement to bereavement leave will be extended to anyone who is bereaved. Details of what relationship is required haven’t been made clear at this stage. Where a child passed away, the entitlement will remain as 2 weeks leave, for others entitlement will be to a week of leave.
Stronger protections for pregnant employees & returning mothers
Currently, under the Equality Act 2010, employees are protected against pregnancy and maternity discrimination.
In addition, pregnant employees and those on maternity leave have protections in redundancy situations. This protection is that employers must offer suitable alternative vacancies (if there are any) to pregnant employees and those on maternity leave as a priority. The period of this protection was extended in April 2024 to cover 18 months from the birth of a child to cover those returning from maternity leave.
The Employment Rights Bill will make it unlawful to dismiss pregnant employees or those returning from maternity leave within 6 months of their return, except in limited circumstances.
Flexible Working
Currently, employees can make up to 2 flexible working requests within a 12-month period. Employers must deal with these requests in a ‘reasonable manner’ and can refuse the request for one or more of eight specified reasons. The right to request flexible working has been a day one entitlement since 6 April 2024.
The Government said it would “change the law to make flexible working the default for all, unless the employer can prove it’s unreasonable”.
However, under the Employment Rights Bill, the proposed legislation only provides that the employer needs to state the grounds of refusing the application and explain why they consider it reasonable to refuse the application on one or more of the 8 grounds that already exist. There’s also no change to the penalty for breach, it’s going to remain 8 weeks’ pay.
Statutory Sick Pay (“SSP”)
Currently, SSP is payable from the fourth qualifying day. SSP is payable at the rate of £116.75 per week for up to 28 weeks. In order to qualify for SSP, employees must earn an average of at least £123 per week.
Under the Employment Rights Bill, employees will be able to claim SSP from day one rather than day four. In addition, the lower earnings limit removed and SSP level to be set at a percentage of pay.
Zero Hours Contracts
Currently, there are 1.3 million individuals employed under zero hour contracts. The Government proposed to ban exploitative zero-hour contracts.
Under the Employment Rights Bill, if a worker is working under a zero hours contract, the employer will be obliged to offer a ‘guaranteed hours contract’. That ‘guaranteed hours contract’ will reflect the number of hours the employee worked during the previous reference period.
In addition, zero-hour workers will also have a right to reasonable notice of a shift, cancellation of a shift, or changes to a shift.
Trade Union Rights
Currently, Unions can apply for statutory recognition provided they have at 10% union membership within the proposed bargaining unit and they have evidence that the majority of the employees are in favour of recognition.
Currently, for a ballot to be successful, at least 50% of eligible members must respond and at least 40% of eligible members must vote yes if they work for an important public service. 14 days’ notice is needed for industrial action and industrial action is subject to minimum service levels.
The Employment Rights Bill significantly strengthens the power of trade unions. Changes will include repealing Tory legislation as well as adding in rights and protections for unions and for employees who participate in union activities.
A key change is in relation to union recognition. Under the Bill the Secretary of State will have the power to lower the threshold for statutory recognition applications from 10% of the workforce to anywhere between 2-10%.
The Bill will also remove the requirement for a recognition ballot to have a turnout of at least 40% of the relevant bargaining unit in order to be valid. The Bill will also change the ballot requirements for industrial action to a simple majority of those who vote in it. 7 days’ of notice will be needed for industrial action instead of 14 days and the Bill will repeal the last Government’s Minimum Service Levels legislation.
In addition, under the Bill, employers will be required to give employees a written statement which states that the worker has the right to join a trade union. This statement is likely to be included in an employee’s contract of employment.
The Bill will introduce a new statutory right to access workplaces under access agreements which will be entered into between employers and the listed trade unions. Under an access agreement, unions will have the right to access workplaces for the purposes of meeting, recruiting or organising workers or facilitating collective bargaining (but not to organise industrial action). Employers will be under a duty to take reasonable steps to facilitate access and will only be permitted to refuse access entirely ‘where it is reasonable in the circumstances to do so’. Any disputes will be determined by the Central Arbitration Committee.
What’s missing from the Bill?
There are several things the Government promised it it’s manifesto, or it’s ‘Making Work Pay’ paper, but which don’t appear in the Bill. However, But the Government has committed implement these in the future within their “Next Steps” document. They include:
- The “right to switch off”.
- The requirement for large employers (those with more than 250) to report their ethnicity and disability pay gap.
- The move from the current 3-part framework of employment status (employee, worker and self-employed) to a 2-part framework (worker and self-employed).
- A review of the parental leave and carers leave (new statutory right to unpaid carer’s leave – 6 April 2024) provisions.
The employment law changes put forward in the Bill shall be subject to consultation. We shall provide updates as to the outcome of consultation as and when they become available.
Duty to prevent Sexual Harassment
The Worker Protection (Amendment of Equality Act 2010) Act 2023 came into force on 26 October 2024. The legislation introduces a new positive legal duty on employers to take ‘reasonable steps’ to prevent sexual harassment of their employees in the course of their employment.
If an employee succeeds in a claim for sexual harassment, an Employment Tribunal can consider whether the employer breached its duty to take reasonable steps to prevent sexual harassment and whether to uplift any award of compensation by up to 25%. The uplift will apply to any compensation that is awarded for the unlawful harassment, so could result in a substantial increase.
Under the Employment Rights Bill, the Government propose to go further and increase the new positive duty from reasonable steps to all reasonable steps. In addition, the new Bill will place liability on employers if they fail to take all reasonable steps to prevent harassment by third parties on their workforce.
In light of the new positive duty, employers should consider steps they can take. The Equality and Human Rights Commission have helpfully released some guidance which includes an 8-step guide for employers in respect of preventing sexual harassment at work. The 8-steps are as follows:
Step 1: Develop an effective anti-harassment policy
Step 2: Engage staff
Step 3: Assess and take steps to reduce risk in the workplace
Step 4: Reporting
Step 5: Training
Step 6: What to do when a harassment complaint is made
Step 7: Dealing with harassment by third parties
Step 8: Monitoring and evaluation.
National Minimum Wage
The Government have announced the annual national minimum wage increases to take effect from April 2025.
The increases are as follows:
- For those aged 21 and over minimum wage will rise from £11.44 to £12.21 an hour.
- For those aged between 18 and 20 minimum wage will rise from £8.60 to £10 an hour.
- For Apprentices minimum wage will rise from £6.40 to £7.55 an hour.
In addition, the accommodation offset will rise to £10.66 per day.
For further advice on recent employment law changes please contact the employment team at employment@dtmlegal.com or call 01244 354 800 / 0151 321 0000
