The Employment Rights Bill: what’s changing?

Publish date: 14 Jan, 2025

The Employment Rights Bill has now passed its second reading in the House of Commons; so, what can employers expect if the bill comes into force? Sarah Furness, employment law specialist at Hay & Kilner explains.

Unfair dismissal

Arguably the biggest change, the Bill plans to make protection from unfair dismissal a day-one right, subject to a statutory
probationary period, meaning that employees with less than two years’ service will be entitled to bring an unfair dismissal claim in some circumstances.

Although the details are still unclear, employers will potentially be permitted to dismiss employees within a statutory probationary period without giving rise to an unfair dismissal claim although some formal process is likely to be required. However, employees will potentially still be entitled to bring an unfair dismissal claim in their probationary period if the reason for dismissal is redundancy. The length of the statutory probationary period is likely to be up to nine months, however this is subject to further government consultation. Although a substantial change to the law on unfair dismissal, this is not expected to come into force until October 2026.

Zero hour contracts

To prevent “exploitative” zero-hour contracts, the Bill introduces a right for zero-hour or “low-hour” contract workers to be
offered guaranteed hours based on an average amount of hours that they have worked over a certain reference period. In an acknowledgement that many workers enjoy the flexibility of zero-hour contracts, the worker is not obligated to accept these guaranteed hours.

The Bill also introduces an entitlement for workers to reasonable notice of a cancellation of or change to a shift, and importantly, a right to payment if a shift is cancelled, moved or curtailed at short notice.

Fire and re-hire

The Bill makes it automatically unfair to dismiss an employee for refusing to agree to a change in their contract of employment, with a very limited exception if the employer can show evidence of severe financial difficulties (likely to be near-collapse) and demonstrate that there was no reasonable way to avoid making this change.

Flexible working

The Bill provides that flexible working will be the default “unless the employer can prove it is unreasonable”. This heavily
caveated right only really requires the employer to state why the request is unreasonable, meaning that, in practice, there is no significant change in this area.

New day-one rights

Alongside protection from unfair dismissal, employees will gain the right to parental leave (unpaid), paternity leave,
bereavement leave and statutory sick pay from day one of their employment.

Statutory sick pay

Employees will be entitled to statutory sick pay from the first day of their sick leave, instead of the third day, and the lower earnings limit to qualify will be removed.

Collective redundancies

Currently, employers only have an obligation to collectively consult their staff if they are proposing to make 20 or more employees in one establishment redundant; the Bill will abolish the requirement for all employees to be at one establishment, meaning that employers proposing to make 20 or more employees redundant across all establishments will be
required to collectively consult.

Sexual harassment

The new, active duty on employers to take reasonable steps to prevent sexual harassment in the workplace, (which came into force on 26 October 2024), will be amended by the Bill to require employers to take all reasonable steps and to extend the
duty so that it applies in respect of third-party harassment. Regulations may be put in place to specify these reasonable steps.

Summary

While these are all certainly changes employers need to be aware of, the most impactful are likely be the changes to the law on unfair dismissal and the reinforced protections for zero/low-hour workers. The Bill may still be subject to change as it goes through the consultation process, and further detail is still required to give a comprehensive overview of its impact.

The employment law team at Hay & Kilner are on hand to provide support to AIM members by offering a free 30 minute consultation.

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