Employment Rights Bill 2024

The ERB was introduced into Parliament on 10th October after an increasing level of media attention just ahead of the manifesto commitment to provide draft legislation within the first 100 days of the Labour government coming to power.

It is a large bill which contains 28 reforms to employment law. However, contrary to some of the more excitable reports, many of these will not come into force immediately. Indeed there remains significant amounts of consultation with employers to be undertaken and details filled in by regulations. The government intends to commence consultation in 2025 with the majority of the reforms starting to come into effect during 2026. Arguably the most eye catching reform, making the ability to claim unfair dismissal a ‘day one’ right rather than following 2 years continuous employment as at present, is scheduled to come into force in the autumn of 2026.

Therefore whilst there is always a need for employers to be aware of changes to the employment law landscape which they will need to adapt to, there is certainly no need to panic at this stage.

The key changes which are proposed include:

Making unfair dismissal a ‘day one’ right – The government propose that although there will be the right to claim unfair dismissal from the start of the employment relationship, there will be a different standard of reasonableness to assess fairness or otherwise of dismissals occurring during an initial period of employment. This has been referred to as a statutory probationary period during which it would appear that a more light touch to the management of performance or conduct concerns may be undertaken. It is currently suggested that that probationary period will be 9 months long although this will be the subject of consultation in the coming period. Again subject to consultation the proposal is that there will be a requirement to meet with the employee to discuss the concerns regarding performance or conduct and that compensation for successful claims arising during this initial period may be calculated in a different manner. 

Redundancy - there is a proposal to extend enhanced protection in redundancy situations to a period following return to work after maternity leave and also extend it to return from adoption and shared parental leave. 

In collective redundancies (where an employer proposes to make 20 or more employees redundant within a 90 day period) it is proposed to remove the reference to ‘one establishment’. This means that rather than at present where the proposed redundancy in each branch or ‘establishment’ is considered in order to decide whether the collective consultation obligations have been engaged, consideration would be given the whole business. This would inevitably result in collective consultation obligations being triggered more frequently than at present. 

Zero hours contracts – those employed on a zero hours contract will have the right to a contract guaranteeing them a fixed working pattern if they have, in practice, worked that pattern of hours over a specified reference period. 

It is also proposed that employees whose scheduled shifts are cancelled, moved or curtailed at short notice will be entitled to a payment from the employer to compensate for that late notice. The amount of the payment to be made and the period of prior notice which must be given in order to avoid liability for the additional payment will be set in regulations. 

Statutory Sick Pay – the current regime is that the first 3 days of absence are unpaid and those employees earning below the lower earnings limit for National Insurance contributions are not eligible to receive SSP. Both of these restrictions are to be removed and so SSP (currently paid at £116.75 per week) will be paid from the first day of absence. The Bill contains provisions for those low paid employees who previously would not be entitled to SSP at all to be paid less than then statutory rate of SSP, possibly in a similar manner to that which applies when calculating statutory maternity and other payments for low paid employees, by limiting it to a certain percentage of their normal earnings.

Fire and Rehire practices – these will be outlawed by making the dismissal of an employee for refusing to agree to a change in terms and conditions of employment automatically unfair. 

Flexible working arrangements  - the current regime of requesting flexible working arrangements, which have been a ‘day one’ right since April 2024 will be strengthened by making flexibility the default position where it is ‘practical’ to do so. It is proposed to change the current obligation to deal with a flexible working request in a reasonable manner, to one which is to make a reasonable decision. Employers will need to identify which of the current grounds for refusal apply and (this is the new bit) why the employer considers that the decision is reasonable in all of the circumstances. 

Paternity, parental and bereavement leave – will also become a ‘day one’ right. Statutory bereavement leave will be available on the death of a wider category of individuals than at present when it is limited to the death of a child under 18 or stillbirth after 24 weeks of pregnancy.

All in all, there are some chunky reforms being proposed here, but the final form that they will take is far from certain and there will be time for employers to consider and make appropriate preparations before they come into force. We will be on hand to assist with any changes to your current processes which may be required as the Bill comes into law, but in the meantime ‘keep calm and carry on’ may be the best approach.