The New Employment Rights Bill – what it means for employers

The Employment Rights Bill, published on the 10th October 2024, is the flagship proposal by the new Government promising to ‘make work pay’. The Bill outlines the most significant and far-reaching changes to employment law for decades. In this article we review the proposals and the implications for employers including the most recent amendments to the Bill published last week.

What are the headlines?

Everyone is talking about – Unfair Dismissal – A “Day One” Right

Employees will have the right to bring a claim for unfair dismissal from the first day of employment and will no longer have to wait to be employed for 2 years before bringing a claim.

There will be an exception to this right in the initial period of employment, or what we would commonly refer to as a probationary period. In the probationary period the employer will need to carry out a ‘proportionate assessment of the employee’s suitability for a role’. At the time of writing, it has been confirmed that this period will be between 3 and 9 months.

The Government plans to consult extensively on this proposal but as a minimum it has said that employers will need to meet with employees to explain the performance issues before deciding to dismiss. Whilst this will be a lighter touch than the usual unfair dismissal, you will need to be able to show good, objective evidence of the employee’s unsuitability for the role, provide appropriate training and opportunities to improve.

This probationary period will relate to the employee’s suitability for the role and will not therefore apply to redundancy dismissals where full unfair dismissal rights will apply from day one.

Although the law will not come into force for 2 years you will need to start preparing as any new employees who start employment in the next couple of years will not have to wait the full 2 years to bring a claim if the new legislation comes into force in 2026 as planned. A new employee starting in Autumn 2025 will only need a year’s service as the new law would start in Autumn 2026. Ensuring that you have effective probationary management in place will therefore be key.

Doubling the Tribunal Claim Time Limit

In the amendment paper last week, the Government confirmed its intention to increase the time for bringing an employment tribunal claim from 3 months to 6 months for all claims. This is a significant change which would give employees more time to submit a claim but on the plus side would give employers more time to settle before any claims are issued.

Fire and Rehire and Zero hours contracts

The Bill will mean that it will be automatically unfair to dismiss an employee for refusing a contract variation. Employers will only be able to change contracts using this method in cases of financial necessity that threaten business viability.

Those on zero or low hours contracts will have the right to a guaranteed hours contract if they regularly work a defined number of hours. There will also have to be reasonable notice of shifts and compensation for last minute cancellations of shifts.

Statutory Sick Pay, parental and other Leave

Employees will be able to claim statutory sick pay from the first day of sickness absence and the earnings threshold is removed.

The qualifying periods for paternity and parental leave will be removed, giving employees these rights from day one. Employees will also be able to take paternity leave after shared parental leave.

In addition to bereavement leave of two weeks for the loss of a child, the bill extends this to other individuals. The leave for other relatives will be for a shorter period of one week and the regulations, which are to follow, will determine which relatives the leave will apply to. If there is more than one bereavement in the year the employee will be entitled to leave on each occasion.

There will be a presumption in favour of flexible working and the Bill makes it harder to refuse these. The right to request flexible working is already a day one right but where an employer refuses a flexible working request on one or more of the specified grounds, they will now have to show that the refusal is reasonable.

Protection for maternity and pregnancy

Regulations implemented following the Protection from Redundancy (Pregnancy and Family Leave) Act 2023, extended existing protections so that they now begin on the day the employer is first notified of the employee’s pregnancy and end 18 months after the date of the child’s birth or after the date of adoption for parents taking adoption leave. 

The Bill proposes further enhanced protections for pregnant women and new mothers, including protection from dismissal during pregnancy and maternity leave. Employers will be unable to dismiss a woman who is pregnant or on maternity leave and during the initial 6 months period on return to work – except in specific circumstances.

Gender Equality Plans

The amendments have also included a new statutory obligation to produce equality plans related to gender equality (including gender pay gap and menopause) for organisations with 250 or more employees. As well as gender pay gap reporting these employers will have to explain what steps they are taking to help women experiencing the menopause.

Sexual Harassment

The new law on sexual harassment came into force on the 26th October 2024 and employers must take reasonable steps to prevent sexual harassment. The Employment Rights Bill proposes to change this law and make it stronger. Employers will have to show that they have taken all reasonable steps to prevent the harassment.

The Bill also makes it clear that the employers will be responsible for third party sexual harassment, see below.

Third Party Harassment

There is a significant change to the law on harassment. The Bill says that employers will be held responsible for harassment of their employees by third parties (related to any protected characteristic) where they haven’t taken all reasonable steps to prevent it. What will amount to all reasonable steps where third parties are concerned, remains to be seen.

Non-Disclosure Agreements

The amendment paper provides that any non-disclosure agreements which seek to prevent workers from disclosing details of harassment (including sexual harassment) will be void.

Future reforms

The Government has said that it will publish a ‘Next Steps’ document which will outline future reforms, including:

• A ‘right to switch off’ to prevent out-of-hours contact, except in emergencies.
• A commitment to tackle pay discrimination by expanding the Equality (Race and Disparity) Bill to mandate large employers to report on ethnicity and disability pay gaps.
• A move towards a simpler two-part framework for employment status.
• Reviews of parental leave and carers leave systems.

Do I need to panic?

The short answer is no! The Government has said that the new laws are likely to come into force in Autumn 2026 so you have time to prepare for these changes.

The Government plans to consult extensively on the proposals and some of those consultations have already started.

All of the consultations provide a crucial opportunity for you as employers, to influence the development of the Employment Rights Bill. The responses could shape the final form of the legislation. Don’t think that you are too small to make a difference – if you want your voice to be heard, review the proposals and provide your feedback to ensure that your perspectives are represented.

There will be consultation more widely on the implementation of other measures, so you will have the opportunity to feedback and shape the development of these changes.  There is therefore time to prepare but if you would like to discuss how we can help you get ready for these changes, please contact Lisa Reynolds in our team on 07771 316 123