Key employment law changes under the Employment Rights Bill 2024

What do you need to know about changing employment law?

On 10 October 2024 the Labour government published its much-anticipated Employment Rights Bill, containing proposals to significantly reform workers’ rights.   

Below is a summary of the key changes that are proposed under the Bill.

Right to claim unfair dismissal from day one of employment

Of all the reforms proposed, this is certainly the most headline grabbing.   Currently, only employees with 2 years’ service can bring a claim for unfair dismissal.   The Bill proposes to reduce the qualifying period to 1 day.  

On the face of it, this may appear alarming for businesses.  However, under the proposals, employers will be allowed to operate a statutory probationary period, during which they will be able to dismiss an employee who is not suitable for the job by following a basic procedure.  

The Government intends to consult about the length of the probationary period, which it is currently suggesting should be 9 months.    The basic procedure that employers will be required to follow under the statutory probationary period is likely to consist of inviting the employee to a meeting to discuss concerns about their performance before deciding whether or not to dismiss.    The employee will also have a right to be accompanied by a trade union representative or work colleague to such a meeting.  

If an employer decides to dismiss an employee after the expiry of the statutory probationary period, the  employer will need to show (as it does now for those with 2 years’ service) that (a) the reason for dismissal is one of the five potentially fair reasons for dismissal (conduct, capability, redundancy, statutory restriction or some other substantial reason) and (b) that they acted fairly in dismissing for that reason.  

The change to the law is not anticipated any earlier than Autumn 2026 which means there is plenty of time for employers to plan and put the appropriate processes into place. 

Right to Statutory Sick Pay from day one of sickness

Currently, Statutory Sick Pay (SSP) is not payable for the first 3 days of sickness – known as “waiting days”.   The Government intends to get rid of the waiting days so that SSP will be payable from the first day of sickness absence. 

The Government also intends to remove the earnings threshold for entitlement to SSP.  Presently an employee’s normal weekly earnings have to be more than the “Lower Earnings Limit” in order to receive SSP.   Under the proposed changes, all eligible employees, regardless of their earnings will be entitled to SSP. 

Removal of qualifying period for Paternity Leave and Parental Leave

The Government intends to make the right to take paternity leave and parental leave a “day one” right.   Currently employees must be employed for 26 weeks’ to be entitled to take paternity leave and one year in order to take parental leave.   

Extension of Automatic Unfair dismissal rights to “fire and re-hire” situations

There are plans to extend the right to bring a claim for automatic unfair dismissal (where no qualifying period of employment is required) to situations where an employee is dismissed and offered re-employment on less favourable terms (commonly referred to as “fire and rehire”).

The Bill does not ban the practice of dismissal and re-engagement but provides that such dismissals will be automatically unfair unless an employer can show that (a) the reason for the variation was to prevent or significantly reduce financial difficulties affecting the business (b) that there was no reasonable alternative but to make the variation and (c) they acted fairly and reasonably when seeking to make the variation.   

It is believed that this proposal is likely to meet with the most resistance when it goes through the necessary consultation stage. 

Bereavement leave to be extended to all

Presently bereavement leave is only available to those who lose a child under the age of 18.  Under new proposals, this right will be extended to all employees who need to take time off work to grieve.  The details of the extended right are not set out in the Bill but will be set out in future Regulations.  

Expansion of Right to Flexible Working

In April 2024, the law was changed to make the right to request flexible working a “day one” right.   Employees were also given the right the make up to two flexible working applications a year (as opposed to one, previously).    

The Bill expands on this right by providing that an employer will only be able to refuse an application for flexible working if it is reasonable do to so.   It also places an obligation on an employer who refuses a flexible working application to state which of the 8 grounds for refusal they are relying upon (which is required under the present law) but also to explain, in writing, why they consider their refusal on the stated ground(s) to be reasonable.    

However, the 8 specified grounds on which employers can refuse applications remain unchanged and the compensation for failure to comply with the statutory rules continues to be capped at 8 weeks’ pay.  

Extension of protection on returning from maternity leave

Another new change that came into force in April 2024 was the extension of protection from redundancy to pregnant employees and employees within 6 months of their return to work period after taking maternity or adoption leave.   The Bill proposes to extend the protection further and make it unlawful to dismiss women who are pregnant, on maternity leave or recently returned to work after pregnancy/taking maternity leave, except in specific circumstances.    

Further changes to protection from harassment laws

As we know, from 26 October 2024, there will be a new legal duty on employers to take reasonable steps to protect workers against sexual harassment.    The Bill proposes to introduce further changes to this area including:

• An obligation on employers to take “all” reasonable steps to prevent sexual harassment – a higher threshold than that which employers will be required to meet from 26 October 2024.

• The ability to make regulations that specify what steps will be regarded as “reasonable” for the purposes of the proactive duty.

Further, and importantly, the Bill intends to amend the Equality Act 2010 to make employers liable for “third party” harassment and impose an obligation on employers to take all reasonable steps to prevent such third-party harassment.  The reference to third party is currently widely defined as anyone who is not the employer or an employee – so will cover, for example, contractors, customers or suppliers of the employer. 

Regulations on use of Zero hours contracts

Following through on Labour’s pre-election promise to ban “exploitative” zero hours contracts if elected, the Bill introduces new regulations which are aimed at restricting the use of zero hours contracts. The provisions in this area are, in contrast to other reforms contained in the Bill, lengthy and prescriptive.  In brief, however, the Bill provides for:

• The right for zero hours workers to be given a guaranteed hours contract if they have worked regular hours over a 12-week reference period. Workers can elect to remain on a zero hour contract if they wish to.  This goes further than the previous government’s proposal to give workers a “right to request“ predictable terms and conditions.

• A requirement for employers to give zero hours workers reasonable advance notice of a shift or any changes to a shift.

• A right for zero hours workers to claim compensation if they are not given reasonable notice before the start of a shift or a shift is cancelled or changed without reasonable notice.

Changes will take time 

The above is a summary of the main employment law reforms that the Labour government intends to implement.  However, as with any proposed changes to legislation, they will take time to become law. 

The presentation of the Bill in Parliament was just the first stage in the long legislative process.   As part of that process, the government will carry out a consultation process on the details of the various proposals, which will take some time, and will also likely result in various amendments.   There will therefore be plenty of time for employers to prepare for the changes and we will keep you updated of any further details as and when they are published. 

If you would like any support in preparing for the changes then please do not hesitate to to get in touch 01983 897003.