How to prepare for the Employment Rights Bill — 9 key recommendations for employers

Our experts consider the transformative Employment Rights Bill (the Bill) which promises to bring significant changes to UK employment law. 

This landmark legislation — described as the most substantial upgrade to worker rights in a generation — aims to reshape the relationship between employers, employees and trade unions.

Here, Lee Jefcott, Ali Hough and Claire Flavin provide insights on how businesses can prepare for some of the significant changes proposed under the Bill.

1. Day one employment rights

The concept of day one employment rights involves expanding certain rights that previously required a specific amount of service, such as unfair dismissal, paternity leave and parental leave. Unfair dismissal rights will be available from day one, subject to an “initial period of employment” (probationary period) and a light-touch dismissal process. The Government proposes a nine-month initial period of employment (which would be put to public consultation), potentially affecting 9m employees with less than two years of service. 

Employers should start considering the impact on their business, particularly regarding probation reviews.

2. Banning exploitative zero hours contracts

While the Bill doesn’t ban zero-hours contracts, it aims to eliminate one-sided flexibility by requiring employers to offer guaranteed hours contracts to eligible workers. Employers must offer a contract reflecting the hours regularly worked over a previous reference period (likely to be 12-weeks) for those on zero-hours contracts or contracts which only guarantee a low number of hours. The proposed changes, which are complex and subject to consultation, target industries like hospitality and retail where employees often work more hours than their guaranteed contract. Recent government amendments to the Bill as a result of consultation mean that agency workers will be covered, with the responsibility to offer the guaranteed hours contract to fall on the hirer (and in some cases on the agency). 

Employers should consider moving workers onto contracts which reflect the hours that they regularly work and review the use of agency workers. 

3. Reasonable notice of shifts, shift changes and cancellations

The Bill mandates employers to provide reasonable notice of shifts as well as shift cancellations and changes, with compensation for short-notice cancellations, movements and curtailments. The definition of reasonable notice will be determined in regulations and compensation is not expected to exceed the amount that the employee would have earned on the shift. 

Employers should monitor developments, especially regarding demand fluctuations and the impact on agency workers. Consultation on these changes has and will take place. Employers should consider starting to plan for implementation.

4. Flexible working

The Bill will not create an obligation to make flexible working the default but aims to encourage employers to properly consider requests for flexible working. Employers will have to act ‘reasonably’ if they refuse a request although more detail is awaited on the exact requirements. This contrasts with the present position in which employers still have considerable leeway to turn down requests provided that they have consulted with the employee.

Where requests are turned down, employers should focus more clearly on their reasons for refusal — would they stand up to scrutiny by an employment tribunal? Employers are going to be expected to explain any refusal in more detail and to consider any alternatives.

5. Time limits for tribunal claims

While the current time limit for bringing employment tribunal claims remains at three months, there is a proposal in the Bill (included after it had been originally published) to extend it to six months. This extension would apply to almost all employment tribunal claims.

Employers should anticipate an increase in claims and early conciliation/ settlement negotiations via ACAS before a claim is brought, leading to increased uncertainty following dismissals and increased workload. Keeping records for longer and preparing for potential changes to the time limit is advisable.

6. Fire and rehire (dismissal and re-engagement)

The Bill will make dismissal by reason of fire and rehire automatically unfair unless the employer can demonstrate that the variation of the contract was necessary due to such significant financial difficulties that would mean the business could not keep trading as a going concern or carry out the business activities. The employer would also need to show that it couldn’t reasonably have avoided having to make the variation. This is going to significantly reduce the ability of employers to make contractual changes to employment terms, even on an individual basis.

The new law will make termination and re-engagement very difficult and we would expect to see a reduction in the number of fire and rehire dismissals.

7. Preventing sexual harassment

The existing duty on employers to take reasonable steps to prevent sexual harassment at work will be strengthened to take ‘all’ reasonable steps. This is more than just semantics and will require a real focus on risk. In addition, the Bill will re-introduce liability on employers for the harassment of its employees by third parties such as customers, suppliers and the general public.

Employers should carry out a risk assessment across its business operations including the risk of harassment from third parties and consider ways in which the risk can be minimised.  Providing training to all employees, creating/ updating policies and ‘speak up processes’ and supporting employees who report harassment should all be considered and implemented.  

8. Collective consultation for redundancies

Where an employer proposes to make 20 or more redundancies at one establishment it must collectively consult about ways of avoiding redundancies, reducing the number of redundancies and mitigating their effect. The original Bill made it clear that ‘establishment’ would be considered to be across the entire workforce — thereby substantially increasing the applicability of this duty. However, in an amendment to the Bill there will now be a focus either on the place where the employees work or a threshold (yet to be set) across the workforce. This amendment addresses concerns about the potential widening of the duty and restores a level of orthodoxy.

However, where there is a breach of the duty the Bill says that the compensation will be increased to a maximum of 180 days’ pay (from the current 90 days).

Employers should note the increase in the financial penalty and ensure that all requirements are met when the changes come into effect.

9. Trade union changes

The Bill will introduce significant changes in respect of trade unions, in particular for non-unionised employers. It will be easier for trade unions to access workplaces, gain statutory recognition and take industrial action. 

Recent amendments to the Bill include:

• the existing mandate for industrial action being extended to 12 months (up from six)
• access to workplaces being extended to include virtual access
• notice of industrial action being increased from the current proposal in the Bill of seven days to 10 days
• the proposed repeal of the 50% ballot turnout requirement. 

Employers should think strategically about colleague engagement and be prepared for increased trade union activity.

Next steps to make work pay

Alongside the Employment Rights Bill, the Government has published a Next Steps to Make Work Pay document which deals with matters not listed in the Bill, such as the right to disconnect, single worker status and the creation of a Fair Work Agency to enforce workplace rights. 

It also sets out that it will use “existing powers and non-legislative routes” to deliver other commitments contained in the Government’s ‘Plan to Make Work Pay’ and introduce a draft Equality (Race and Disability) Bill.

When will the reforms take effect? 

The Government has indicated that it will “begin consulting on these reforms in 2025, seeking significant input from all stakeholders, and anticipate this meaning that the majority of reforms will take effect no earlier than 2026.” Some consultations have already taken place and have led to amendments to the Bill (including those mentioned above).

How should you prepare?

The Employment Rights Bill introduces several pivotal changes. To navigate them, businesses should consider the likely impact on their operations, particularly around unfair dismissal claims, probationary periods, risks of harassment claims and trade unions. Employers should also review their use of zero-hours and low hours contracts and consider moving workers on to contracts that more closely reflect the hours actually worked.

Employers should also prepare a robust risk assessment to identify areas where the business is exposed to claims of sexual harassment (including from the actions of third parties) and consider what steps should be put in place to reduce this risk.

Talk to us

We will be keeping a keen eye on developments. By staying informed and proactive, you can successfully navigate the new era of employment law and ensure compliance with the forthcoming changes.

If you need guidance — or if you have any questions about how changes to employment law might affect your business — our expert employment law team is able to assist.

Give us a call on 0333 004 4488, email us at hello@brabners.com or complete our contact form below.