All the changes proposed by the Employment Rights Bill 2024

Sick Pay

The Bill removes the current three-day waiting period before a worker is entitled to receive Statutory Sick Pay (SSP). Consequently, the Bill proposes that SSP should be payable from the first day of sickness. In addition to this, the Government is proposing to remove the current Lower Earnings Limit (currently £123 per week), which an employee needs to earn, in order to qualify for sick leave.

The Department for Work and Pensions (DWP) has released a new consultation on the proposed measures for changing Statutory Sick Pay. The consultation is asking what percentage of average weekly earnings should be paid, with reasons; for those earning under the current rate of SSP.

The current rate of SSP is £116.75 per week. Consequently, an employee who earns less than that, could be paid a percentage (e.g. between 60% and 80% of their normal pay depending on a decision following the consultation process); when absent due to sickness from the first day of absence.

Bereavement Leave

The Statutory Parental Bereavement Leave provisions provides 2 weeks leave (with Statutory Bereavement Leave Pay) for parents in the event of the death of their child (under 18).

However, there is no other entitlement to bereavement leave in respect of the loss of an adult. Consequently, the Bill introduces an entitlement to one-week unpaid Bereavement Leave for ALL. We await the regulations for the detail including the definitions of who would be entitled to Bereavement Leave, having regard to the connection with the person who has died.

Family Friendly

The Bill provides day-one rights for paternity, parental and bereavement leave.

Consequently, where Paternity leave can currently only be taken after 26 weeks of employment; the new Bill allows for a father to take paternity leave from the first day of their employment.

Similarly, Parental leave can currently only be taken after 12 months of employment; and the new Bill allows for a parent to take parental leave from the first day of their employment.

Significantly, there is no change to the Shared Parental Leave provisions.

Flexible Working

There has been a lot of publicity suggesting the Bill introduces an automatic right for workers to work flexibly. Currently an employee has the right, from the first day of employment, to make two flexible working applications in a 12-month period – this has not changed.

The business reasons upon which an employer could refuse a flexible working application has similarly not changed, and they remain:

• The burden of additional costs
• An inability to reorganise work amongst existing staff
• An inability to recruit additional staff
• A detrimental impact on quality
• A detrimental impact on performance
• A detrimental effect on ability to meet customer demand
• Insufficient work for the periods the employee proposes to work
• A planned structural change to your business

Whilst an employer must deal with an employee’s request for flexible working in a reasonable manor, it can be reasonable for an employer to refuse a request for a contract variation due to one of the above reasons. The Bill gives an employee the right, however, to claim that the employer has not acted reasonably. This means that an employer has to show that the procedure has been followed and provide an explanation for the refusal.

Therefore, at face value, this may not be such a significant shift from the current position relating to flexible working; but would appear to simply require an employer to provide clear reasons for the refusal. The penalty for not dealing with a flexible working request reasonably remains at a maximum of 8 weeks’ pay.

Pregnancy

The Bill strengthens protections for pregnant women and new mothers at work by making it unlawful to dismiss them within 6 months of their return to work except in specified circumstances.

Zero-hours Contracts

The Bill sets out a number of provisions:

i. The right to a guaranteed hours contract

The Bill provides that workers on a zero-hours contracts (or a low number of guaranteed hours) must be offered a guaranteed-hours contract at the end of every “reference period”.

The guaranteed-hours contract should reflect the hours the individual regularly work over a reference period. A reference period has yet to be defined, but a12- week period has been indicated.

If the number of regular hours worked increases over the subsequent reference period, a new guaranteed-hours contract will need to be issued.

There is, however, no obligation on a worker to accept the offer of a guaranteed-hours contract.

The Bill provides workers with a right to bring a complaint before the employment tribunals if they are entitled to a guaranteed-hours contract offer but have not received one. Potentially the compensation could be for hours not offered, which should have been offered in a guaranteed-hours contract.

Zero-hours Contracts

The Bill sets out a number of provisions:

ii. Right to Reasonable notice of being required to work a shift

Further protection has been provided for workers on zero or low-hour contracts in the form of a requirement to be given reasonable notice of changes in shifts.

“Reasonable notice” has yet to be defined; but would be ‘presumed’ reasonable (not deemed reasonable), which means that an employer can argue that shorter notice is reasonable having regard to the nature of the business and all the circumstances.

Compensation for transgression is yet to be defined.

Zero-hours Contracts

The Bill sets out a number of provisions:

iii. Right to Reasonable notice of a shift cancellation

Similarly, “Reasonable notice” has yet to be defined, but should not exceed 7 days.

The Bill provides that in the event of an employer cancelling a shift on short notice, they must provide proportionate compensation to the worker. We await Regulations on how compensation is to be calculated, but the amount should be capped at what the employee would have been paid for the shift, had they worked it, but with a sliding scale depending upon the notice given to cancel.

Unfair Dismissal

Under the current law, workers must have been at their place of work for at least two years to qualify for unfair dismissal rights; however, this is being repealed by the Bill. Therefore, employees will be protected against unfair dismissal from the first day of their employment.

However, the Government Guidance sets out that during the initial period of employment (not yet defined but the government’s current preference is 9 months) there will be a “lighter-touch process” to dismiss an employee who is “not right for the job”. The length of the initial period of employment and the details of the “lighter-touch process” will be consulted over.

The lighter-touch process will apply to any dismissal where notice is given during the initial period of employment, even if the Effective Date of Termination is after the initial period of employment has expired. This means that during the “initial period of employment” an employer will be able to dismiss applying the lighter-touch process for conduct, capability, statutory ban, or for Some Other Substantial Reason related to the employee (not the workforce as a whole).

In the case of dismissal due to redundancy, the full fair procedure will need to be followed, irrespective of length of service.

Fire and Rehire

Where an employer dismisses an employee and then rehires them on new terms, following a failure to agree a contract change; this is known as “Fire and rehire”.

The Bill provides that a dismissal will be unfair if the principal reason for dismissal is either that:

• The employee refused to agree to a variation to the terms of their contract; or
• To enable the employer to recruit another person under new terms but with substantially the same duties.
• Therefore, this potentially is the end of “fire and rehire”.

What it could mean is:

• Any attempt to vary an employee’s contract could only take effect if the employee agrees.
• Harmonising terms and conditions could become a thing of the past.
• Reducing/diminishing benefits could be impossible.
• Changing shift patterns could be problematical if the employee refuses to agree.

Whilst you can have clauses in the contract such as flexibility clauses; or clauses relating to benefits being discretionary (not contractual); or reserve the right to vary the contract; there is no guarantee that an Employment Tribunal will accept such clauses to be valid and enforceable.

There is an exception in the Bill and that is in the very limited circumstances where fire and rehire practices will be acceptable and that is if businesses need to restructure to remain viable and there is genuinely no alternative other than to fire and rehire.

This means the fire and rehire principal could only be used to prevent total business collapse.

Protection from Harassment

Notwithstanding the recent changes that came into force at the end of October in relation to placing an additional duty on Employers to take proactive/positive steps to prevent sexual harassment in the workplace; the new Bill amends the duty on employers to prevent sexual harassment by changing the requirement for employers to take “reasonable steps” to “all reasonable steps”. This increases the duty of employers with respect to measures to prevent sexual harassment.

The Bill provides for regulations to be introduced which can specify the steps that are to be regarded as reasonable for the purposes of determining whether an employer has taken all reasonable steps to prevent sexual harassment.

The Bill also introduces a duty on employers to take all reasonable steps to prevent harassment of an employee by third parties.

Collective Redundancy Consultation

The Bill removes the requirement for 20 or more redundancies to be at one establishment for the collective consultation obligations to apply. This means that when deciding whether there are 20 or more proposed redundancies, the number of redundancies across the whole business and not at one location should be considered.

Principal Statement of Terms and Conditions of Employment

The Bill proposes a requirement for the Principal Statement to detail that that the employee has the right to join a trade union (irrespective of whether you recognise a trade union).

Tips and Service Charges

This builds on the recent legislation relating to the allocation of tips. The Bill requires employers to have a written tipping policy.

Whistleblowing

A qualifying disclosure is defined under current legislation as any disclosure of information that, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following:

• That a criminal offence has been committed, is being committed or is likely to be committed.
• That a person has failed, is failing or is likely to fail to comply with any legal obligation to which they are subject.
• That a miscarriage of justice has occurred, is occurring or is likely to occur.
• That the health or safety of any individual has been, is being or is likely to be endangered.
• That the environment has been, is being or is likely to be damaged, or
• That information tending to show any matter falling within any one of the above has been, is being or is likely to be deliberately concealed.

The Bill proposes to add to the above list:

• That sexual harassment has occurred, is occurring or likely to occur.
• At the second reading of the Bill in the House, it was proposed to add Bullying/harassment: we wait to see if this is added.

Labour Market Enforcement

The Bill provides the framework for Regulations to be introduced to set up a Fair Work Agency.