On October 10, 2024, the government announced the introduction of the Employment Rights Bill 2024, a landmark piece of legislation aimed at enhancing worker rights and implementing new policies. This initiative aligns with commitments made by the Labour government in its ‘New Deal for Working People’ and its 2024 Manifesto.

 

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The Bill seeks to strengthen various existing rights while also introducing important reforms. Key areas of focus include zero-hour contracts, fire-and-rehire practices, the qualifying period for unfair dismissal, sick pay, parental leave, probationary periods, flexible working arrangements, protections for new mothers, industrial action, and trade union recognition.

 

The Employment Rights Bill encompasses a wide range of the reforms outlined in the Labour Party’s New Deal. Alongside the Bill, the government has also published a policy document titled “Next Steps to Make Work Pay,” which provides an overview of the government’s plans and the next steps for implementing many of these measures.

 

It is important to note that the majority of the reforms will not take effect before 2026. Furthermore, the touted “right to disconnect/switch off” does not form part of the bill. Instead, it is included in the government’s Next Steps paper about reforms that it intends to implement in the future. We will do our best to keep you updated with the latest developments regarding the bill during its journey to become law.

 

A summary of the current state of worker rights, the promised changes, and the expected reform within the Bill is provided below.

 

Zero-hour contracts

 

Zero-hour contracts are employment agreements that do not guarantee a minimum number of working hours, leaving the employee without a required commitment to work. As a result, an individual’s work hours can be unpredictable and may fluctuate significantly from week to week. While those on zero-hour contracts do enjoy certain statutory protections, these are dependent on their employment status.

 

To enhance security for individuals in zero-hour roles, the Labour Party has committed to several key changes:

 

  • Prohibiting exploitative zero-hour contracts
  • Establishing a right to a contract that reflects the number of hours regularly worked, based on a 12-week reference period.
  • Ensuring that workers receive reasonable notice for any shift or schedule changes, along with proportional compensation for cancelled or shortened shifts.
  • Introducing measures to prevent employers from circumventing these protections
  • Ending one-sided flexibility by guaranteeing a baseline level of security and predictability in all jobs

 

The Bill will grant workers the right to guaranteed hours if they consistently work more than those hours. These guaranteed hours will be calculated based on a 12-week reference period. Employers will be obligated to offer guaranteed hours to workers at the start of their employment and at the conclusion of each reference period. Additionally, workers will have the right to bring claims to an employment tribunal if their employer fails to fulfil the obligation to provide guaranteed hours or if the offer does not meet the required standards.

 

Flexible working

 

Under the Employment Rights Act 1996, employees have a statutory right to request specific changes to their employment contracts, but they must have at least 26 weeks of continuous service to qualify. Recent legislative updates effective from April 6, 2024, made this right available from day one of employment. However, employers still have broad grounds to reject requests.

 

The new Bill will introduce a reasonableness standard for employers when denying flexible working requests. Additionally, employers will be required to provide a clear explanation to employees for their decision to refuse the request.

 

Protection for new mothers

 

Currently, dismissal due to pregnancy or maternity is classified as automatically unfair. This means that employees in such situations do not need the usual two years of continuous employment to file a claim with an employment tribunal. Women taking ordinary maternity leave are also entitled to return to their “same job” at the end of their leave, unless that position is no longer available.

 

The Labour Party’s Plan to Make Work Pay includes a commitment to enhance these protections further. It proposes making it unlawful to dismiss a woman for up to six months after she returns to work, except in specific circumstances.

 

Paternity leave

 

Employees are currently entitled to take paternity leave to support a mother or adopter in caring for a new child, but they must have at least 26 weeks of qualifying employment to be eligible.

 

The new Bill will establish paternity leave as a ‘day one’ right, allowing all eligible employees to access it immediately upon starting their job.

 

Fire and rehire

 

Employers currently have the option to terminate an employment contract (with appropriate notice) and offer immediate re-engagement on new terms. The Conservative Party previously introduced a statutory Code of Practice regarding dismissal and re-engagement, emphasising meaningful consultation and alternative solutions. However, the Labour Party has pledged to eliminate “fire and rehire” practices altogether and to reform the existing Code to provide stronger protections against misuse.

 

Under the new legislation, a clause in the Bill will amend the Employment Rights Act 1996. It will render a dismissal unfair if it occurs because an employee refused a contract change or if the employer attempts to rehire someone under altered terms for substantially similar duties. This provision will not apply if the employer can demonstrate that the contract variation was necessary to address significant financial difficulties affecting the business, and that avoiding such changes was not reasonably possible.

 

Unfair Dismissal Qualifying Period

 

Currently, under section 108(6) of the Employment Rights Act 1996, the right to claim unfair dismissal typically requires at least two years of continuous employment, though there are exceptions.

 

The Labour Party has committed to abolishing this two-year qualifying period, making the right to claim unfair dismissal effective from day one of employment. The Bill will repeal the relevant section of the Act, removing the two-year requirement. However, there will be a new ‘initial period of employment’ or ‘probationary period’ during which employers can dismiss employees for specified reasons, provided they follow a defined procedure. The length of this initial period and the procedural details will be determined through consultation.

 

Sick Pay

 

Currently, Statutory Sick Pay (SSP) is available to employees who are too ill to work for at least four consecutive days and earn above a weekly threshold of £123.

 

The Labour Manifesto pledged to eliminate the qualifying period for SSP, making it a ‘day one’ right, and to remove the lower earnings limit.

 

The Bill incorporates these commitments in clauses 8 and 9. The government will also consult on the percentage replacement rate for those earning below the current SSP flat rate before implementing it as an amendment to the Bill. Additionally, the new Fair Work Agency will oversee the enforcement of SSP.

 

Parental leave

 

Parents, whether biological or adoptive, currently have the right to take up to 18 weeks of unpaid leave to care for their child until the child turns 18. However, this right is only available to those who have worked for their employer for at least one year.

The new Bill will establish parental leave as a ‘day one’ right, allowing all eligible parents to access it immediately upon employment.

 

Bereavement leave

 

Employees currently have the right to take Parental Bereavement Leave (PBL) following the death of a child, provided they meet specific parental relationship criteria and notice requirements. While PBL is a ‘day one’ right, it is currently limited to employees.

 

The new Bill will expand this right to include any “bereaved person,” allowing leave for the death of any individual, as long as they fulfil the relevant conditions outlined in the regulations.

 

The Bill also establishes a new single enforcement body known as the Fair Work Agency. They will be responsible for minimum wage and statutory sick pay enforcement, the employment tribunal penalty scheme, labour exploitation and modern slavery and enforcement of holiday pay policy.

 

Our thoughts

 

In summary, the introduction of the Employment Rights Bill 2024 marks a significant advancement in worker rights, aligning with the Labour Party’s commitment to improving working conditions. The proposed changes—such as the regulation of zero-hour contracts, the elimination of fire-and-rehire practices, and the introduction of ‘day one’ rights for sick pay and parental leave—aim to provide greater security and fairness for all employees.

 

The Bill’s enhancements to protections for new mothers, flexible working rights, and the reduction of the qualifying period for unfair dismissal reflect a progressive shift toward a more equitable workplace.

 

It is a good idea for employers to pay attention to the new changes. A principal reason for this is that, for employers who plan to sponsor overseas employees in the future, these will form part of their responsibilities.

 

While these reforms will not be introduced straight away, overall, these reforms are a positive step forward, fostering a more supportive and just environment for workers across the country.

 

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