What to expect under the UK’s Employment Rights Bill

A new bill put forth by the UK’s Labour Government is hoping to shake things up in what the administration said will be “the biggest upgrade to workers’ rights in a generation”, replacing so-called “out-of-date” employment laws. The Employment Rights Bill is currently in the committee stage in the House of Commons, and is still being debated and amended, meaning the exact form that it will take is currently uncertain. What can be determined are areas of employment that are being targeted, and anticipated upgrades that could come if the bill is implemented. Here is what we know so far…

Zero-hour and flexible working

As part of a prior Labour pledge to end “exploitative” zero-hour contracts, the bill proposes that workers will have the option to participate in such a model if they wish to, with no all-out ban intended. Yet it would introduce a right to guaranteed hours for a qualifying worker. This should come at the end of every reference period if the worker’s hours exceed the minimum number outlined in their contract, with an anticipated period of 12 weeks noted in the bill. Current exceptions apply to short-term labour needs, for which the bill suggests a “reasonable” fixed-term contract.

In regards to flexible working hours, the bill would require any refusal of such requests to be “reasonable”. Currently, businesses are allowed to deny such requests based on one or more of eight reasons listed in existing legislation, which will remain the same. However, if the bill is passed, it would be required to explain to the employee what the ground for refusal is. In addition, the right to claim flexible working has previously been classified as a day-one entitlement for employees, however, the bill has suggested that it should instead by the “default” from the first day of employment.

Unfair dismissal and redundancy

Under the current structure, employees need to work two years before gaining the right to claim unfair dismissal, with no rules about probationary periods existing. On request, employers also only need to give written notice for the dismissal. The bill proposes a new “initial period” for which an unfair dismissal would be allowed to be claimed, with a nine month preference currently being considered. It would also bring in a lighter approach to such procedures, and rules out redundancy as a reason for a dismissal.

In the case of a redundancy, the bill would require employers to count redundancies across all workplaces instead of the current structure that addresses the need for a process of consultation before making over 20 redundancies “at one establishment” within a period of 90 days. No changes will be made to the number of redundancies required to enforce a consultation.

Limitations will further be put on “fire and rehire” tactics, despite the Code of Practice being put into place on such practices in July. While still unlawful, the bill would rule such a procedure automatically unfair when related to a change in terms and conditions, either because the employee didn’t agree to such terms or because there was an attempt to employ another individual under the varied terms. The government is currently debating proposals to either increase or remove the cap of 90 days’ pay on protective awards for failure to consult in relation to collective redundancies in this context, with an award of interim relief to impacted employees of these practices also being discussed. New regulations regarding consultation processes by financially-impaired companies are also being outlined.

Sickness and maternity leave

A core part of the bill is to reform the current Statutory Sick Pay (SSP) structure, which is at this moment payable from day four of sickness, and can only be applied to employees earning above 123 pounds. The bill instead proposes to make SSP payable from day one of sickness and for the first three qualifying days, with the lower earnings limit to then be removed. In the case of menopause, for which there are currently no active obligations, new regulation would require employers with over 250 employees to create menopause “action plans”.

While for paternity leave, the bill would remove any length of service requirement (currently an employee is eligible if they are employed for 26 weeks), it will also introduce regulations for dismissals other than redundancies taking place during pregnancy, maternity leave or after a return to work. These regulations are currently not disclosed, however, it could be that a ban will be imposed on dismissing eligible women. Further leniency will be given to those requesting bereavement leave, introducing a day one right for such requests.

Discrimination and unionisation

In the current form, employers with over 250 employees are to publish annual gender pay gap reports, however, upon the bill’s implementation, such businesses would be further required to publish “equality action plans”, with regulations for these documents incoming. It will also be required to name the employers of contract workers. Reporting ethnicity pay gaps, disability pay gaps and equal pay rights are expected to be introduced under separate bills.

The government has also proposed a more stringent approach to sexual harassment, strengthening the requirements for employers to take “all reasonable steps” to prevent such instances, while further making employers liable for third party harassment unless yet-to-be specified steps were taken to prevent it. Sexual harassment will also be added to the list of qualifying disclosure.

Trade unions are a large part of what the bill would address, with more workplace access to be granted to such organisations if it goes into effect, including physical access where necessary. Terms of these arrangements are still to be determined. Reforms to statutory union recognition are also anticipated. This could include the removal of the current requirement for 40 percent of all workers in the bargaining unit to have voted for union recognition, and the possibility of reducing the required threshold for union membership to around 2 percent of the proposed bargaining unit.