Anna Elliot explains what the Employment Rights Bill means for HR.
Many of the reforms were heavily promoted in Labour’s Plan to Make Work Play in their election campaign. However, in recent months there has been increasing speculation about what might or might not be included in this Bill.
What was the Bill?
Notably:span class=”Apple-converted-space”> /span> The Bill’s proposals impact all employers, regardless of size and sector. Notably:
- Unfair dismissal With the removal of the qualifying period of two years, this will become a right from day one. This is the biggest change.
- Probationary Periods: The government prefers a nine-month probationary period.
- Flexible Working: This is to become the “default” for all, but employers will still be able to deny a request based on legal grounds. However, they must adhere to a reasonableness standard and provide a written explanation to employees when a request has been denied.
- Sexual harassment The new duty of employers to take reasonable measures to prevent sexual harassment, which came into effect at the end last month, will be amended so that an employer must take “all” reasonable measures. The introduction of vicarious liability will also apply to third-party harassment.
- Statutory Leave: The right to paternity, parental and maternity leave will be a day-one right. There will also be stronger protections against dismissal of those who are pregnant or on maternity leave within six months after returning to work. The Bill also includes “protected leave” for a week in the event of a death of a qualified individual.
- Statutory sickness pay:The lower earning limit for qualifying for statutory illness pay will be removed, and statutory sickness pay will be payable on the first day of sickness.
- Rehire and fire: “Fire-and-rehire” is only legal in limited circumstances.
- Workers with zero hours or low hours:Provisions are made for workers who work excessively and have a contract that guarantees a certain number of hours. They can request this contract and receive reasonable notice if there is a change in the working hours.
- Trade Unions:Provisions strengthen the collective voice through trade unions, by simplifying union recognition and bringing a new access right for union officials to recruit, meet and organise their members.
Remember that these proposals have not yet become law. Several of these proposals will be the subject of consultations (four consultation documents have been published already) and will be subjected to detailed implementing regulations, which may also be the subject of consultations.
What can HR do?
The government has stated that the majority of changes to the Bill won’t come into effect until 2026. In addition, unfair dismissal won’t become a right from day one until the Autumn of 2026. It is important that HR prepares for the proposed changes now, due to the importance and number of changes.
The government published the “Next Steps Paper” at the same time that the Bill was released. The government also published a “Next Steps” paper at the same time as the Bill. This shows that employers can expect to see the new government implement other reforms outside the Bill (outlined in its Make work pay pre-election paper). Low Pay Commission‘s mandate has been altered to allow the national minimum wage to reflect cost of living. There are also proposals to remove the “age bands” that surround pay rates. The government will also push forward other reforms centered around diversity and inclusion, including a review on family leave and caring rights. Further legislation on pay transparency rights and equal pay rights as well as provision for the publication of equality action plan on how to tackle gender pay gaps and Menopause. The government also stated that it plans to move forward with a Code of Practice, which is not legally binding, on the right to switch off.
Three key takeaways from HR
HR must be prepared to ensure that the proposals of the new government are implemented.
- Tracks the progress of other reforms that are being implemented in parallel. We expect to see more details in the consultation papers and draft regulation, which will be crucial in preparing for changes. Although reforms that are not part of the Bill, such as reporting on ethnicity pay gaps and disability pay gaps may not become law until some time in the future, employers should start planning their approach to these areas now.
- Assess the impact that each reform could have on your organisation (including the staffing costs, the risks, the employee relations, etc.). Will short-term absences increase with the elimination of the waiting period for statutory sick pay? Will there be an increase in requests for flexible work? Is there an increased risk that employees will move between employers in the same sector, or even within the same industry, as unfair dismissal becomes a right from day one?
- Take action to mitigate these impacts. What steps can be taken, for example, to ensure that short-term absences are managed carefully through policies, line managers and return-to-work interviews? Update policies and train managers on the “reasonableness requirement” in relation to requests for flexible working and the changes to the statutory processes when seeking to agree to a request. Consider loyalty incentives to reduce attrition when there is a high risk of employees switching between companies.
There will be plenty of work for HR in the next few years as proposed reforms go through the legislative process. Consultations are also being conducted. It is important to create a plan to assess the impact on your organization and to prepare for it when the reforms become law.
