Preparing for the Employment Rights Bill
While trade unions and employers may be divided on the merits of the Employment Rights Bill, one point universally agreed upon is the breadth of change that the Bill will introduce. This presents a problem for employers looking to prepare for forthcoming changes: where to start?
The ambitious scope of the Bill is a major challenge for employers
The Bill seeks to implement the government’s ambitious Plan to Make Work Pay which targets exploitative zero hours contracts, a ban on the practice of fire and rehire and day one rights to unfair dismissal and statutory sick pay. As drafted, the Bill goes far beyond these headlines, introducing change into over 28 different areas of employment law.
And further change to the Bill is likely
The expedited timetable for the Bill has meant that provisions have been drafted without prior consultation to assess their workability. As a result, amendments to the Bill are expected as it makes its way through the Parliamentary process, with Royal Assent expected in summer 2025. This has created uncertainty as to the nature of the reforms.
When will the rights come into effect?
In
Next Steps to Make Work Pay, the government indicated that the majority of reforms will not take effect before 2026. However, the timeframe for implementation of the rights introduced by the Bill is not the same across the board.
Changes to the turnout requirements for strike ballots and the notice requirements for taking industrial action, together with other trade union reforms will automatically enter into force two months after the Bill is passed. Other provisions are likely to be introduced in tranches depending on the extent to which further legislation is required to clarify the new rights.
While certain rights are fully developed in the Bill, others require extensive further consultation and the drafting of detailed regulations. A prime example is the new right for zero and low hours workers to be offered guaranteed hours. Numerous elements of this right require further specification, including key details such as the number of contractual working hours per week which would qualify a worker for the right. Consequently, the timeframe for implementation of the right to guaranteed hours could be several years in the future.
So where should employers focus their attention?
At the other end of the spectrum, some reforms will be ready for implementation immediately following Royal Assent of the Bill. Employers should begin considering what these rights mean for their workforce and taking steps to prepare for the change.
- Contract variations including fire and rehire: Employees will have new protection against unfair dismissal in circumstances where terms of their contract are varied without consent or where they are being dismissed and re-engaged on new terms. The protection applies not just where an employer is seeking to adjust pay, bonuses and benefits but also to operational changes, such as introducing new working patterns, relocating the workplace or implementing updated working practices, such as in response to the adoption of AI. Employers should review employment contracts and consider whether the terms allow for implementation of future plans once the new protections are introduced.
- Collective consultation: The Bill will make a change to the threshold for collective consultation, such that the obligation will apply when an employer is proposing to dismiss 20 or more employees across the entire entity, rather than per individual establishment. Employers who operate over multiple sites with a single employing entity should review internal processes to avoid inadvertently triggering collective consultation, where unrelated redundancy exercises are being conducted at different sites. They should also consider how they might co-ordinate cross-site consultation processes.
- Sexual harassment and whistleblowing: The new duty to prevent sexual harassment will be upgraded by the Bill increasing the burden on employers from taking reasonable steps to taking all reasonable steps. Employers should review the measures implemented and consider whether additional steps should be taken. For further information on the duty, see our EmploymentLinks blog.
The Bill also amends the whistleblowing regime to make disclosure of sexual harassment a new category of protected disclosure. Employers should anticipate an increase in reporting of sexual harassment via whistleblowing channels and consider how their whistleblowing policy dovetails with their sexual harassment policy.
- Third party harassment: The Bill imposes new liability on employers in respect of third-party harassment occurring in the course of employment. The protection applies in relation to all protected characteristics, not just sexual harassment. An employer will be liable where it failed to take all reasonable steps to prevent the third party from harassing the employee.
Employers will need to undertake a risk assessment similar to that required in respect of the duty to prevent sexual harassment. This exercise should entail considering the particular risk points that the organisation faces, identifying where employees might be exposed to third party harassment and producing an action plan of steps to address the risks. The focus should be on preventing harassment occurring since liability is not contingent on previous instances of harassment.
- Flexible working: The statutory flexible working regime will be tightened up by the Bill. A new requirement that the grounds for rejecting a request must be reasonable will be inserted into the existing regime. This means that employers will need to justify the reason given for turning down a request and ensure that the employee is provided with an explanation. This change reflects best practice but employers should check and update flexible working policies as needed.