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The government presented its much-anticipated Employment Rights Bill to Parliament on 11 October 2024 as the first phase of delivering its Plan to Make Work Pay. It is a considerable bill of 150 pages comprising 28 separate policies accompanied by a policy paper titled Next Steps to Make Work Pay which sets out the direction of travel in several key areas.
Many details still not clear
One important point for businesses keen to understand the practical implications of the Bill is that most decisions are yet to be taken, with much of the detail to be provided. This will be presented through subsequent regulations and codes of practice, with some areas subject to further considerations and consultations.
The policy paper confirms timescales; “we expect to begin consulting on these reforms in 2025, seeking significant input from all stakeholders, and anticipate this meaning that the majority of reforms will take effect no earlier than 2026.”
Some of the changes that could be progressed relatively quickly include day one rights, statutory sick pay, flexible working and trade union reforms so it is worth understanding these in a little more detail.
Day 1 employment rights
The Government has confirmed that the removal of the two-year qualifying period for employment rights (paternity and unpaid parental leave) and unfair dismissal, will take effect no sooner than Autumn of 2026. Until that time, the current qualifying period will continue to apply. The Government also confirms their preference for a nine-month probation period and light-touch dismissal process, although this will be subject to consultation.
Statutory sick pay
The Bill removes the lower earnings limit and the three-day waiting period for statutory sick pay. However, there will be further consultation on what the percentage replacement rate for those earning below the current flat rate of Statutory Sick pay should be.
Trade unions and industrial action
Many aspects of the trade union reforms will begin two months after Royal Assent. This includes measures related to strike ballots, allowing electronic and workplace ballots rather than postal ballots. There are also further simplifications to the law around statutory recognition thresholds to a simple majority vote with no minimum level of support.
Employers will also be required to inform new employees of their right to join a union through their written statement of particulars. A new protection for workers against suffering detrimental treatment for taking strike action is also introduced. Although it does not include the new right for trade unions to physically access workplaces, for which further regulations are required.
Flexible working
It is also clear that the Government has not legislated a 4-day week, as detailed in the media, but it has amended how the existing right to request flexible working operates. The right to request requires businesses to respond to reasonable requests on reasonable grounds within two months, rejecting requests on accepted grounds, which may be reviewed following consultation.
Zero hours and ‘fire and rehire’
Other high-profile reforms include the ban on zero hours contracts, which is to be enacted through a right to guaranteed hours of work. A ban on ‘fire and rehire’ is introduced, with new grounds for automatic unfair dismissal, although both require further details to be specified in future regulations.
Other measures
Reforms that do not appear in the Bill include the proposal to introduce a two-part framework for employment status. This is subject to further consultation before legislation is considered.
There will also be a separate Equality (Race and Disability) Bill that will be the vehicle for delivering the Plan’s ED&I reforms. The right to switch off will also be introduced through a statutory code.
Acting now
Whilst it is clear that we need to await further detail, businesses are advised to consider their probation periods and flexible working policies. Employers who aren’t unionised should prepare for a potential approach. Those who are unionised will need to revisit their arrangements and consider the new protections.
Support from ECA
The Bill will need to progress through both Houses of Parliament and could face amendments along the way. Secondary legislation and codes of practice will also be subject to further consultations.
This all gives time for us to provide ECA Members with more detailed guidance and practical support on implementation. If you have any questions or feedback, please contact employeerelations@eca.co.uk and check our Employee Relations website for further updates.