The new government has made good on its to-do list and published a draft Employment Rights Bill. It will make significant increases to worker rights, bringing forward 28 individual employment reforms which will undoubtedly change workplace practices. What are the key reforms?
Among the headline changes are:
- Making unfair dismissal protection a day one right. A consultation will be run on a new statutory probation period for companies’ new hires which would allow employers to fairly dismiss badly performing or ill-suited new hires. How long this “protected” probation period will be (the government’s current preference is now nine months, up from an earlier suggestion of six months) and what “lighter-touch” process will need to be followed remains to be seen but, as a starting point, the government has indicated that this may consist of a meeting with the employee to explain the concerns about their performance (at which the employee could choose to be accompanied by a trade union representative or a colleague). The government also intends to consult on what a compensation regime for successful claims during the probation period will be, with consideration given to tribunals not being able to award the full compensatory damages currently available. Given the details that need to be sounded out, the government has said that the reforms of unfair dismissal will take effect no sooner than autumn 2026.
- Ending “exploitative zero-hours contracts”. This is the headline message that the government is pushing. What it means in reality is an intention to increase zero-hours workers’ rights by giving those with a “low” number of guaranteed hours and who regularly work more than these hours the ability to move to guaranteed hours contracts which would reflect the hours they regularly work over a twelve-week reference period. If more hours become regular over time, subsequent reference review periods would provide workers with the opportunity to reflect this in their contracts. Also to be introduced is a new right to reasonable notice of shift changes with “proportionate” compensation for shifts that are cancelled or curtailed at short notice. These measures will also be adapted and applied to agency workers. The government has stated that it will be consulting shortly on the best way to achieve this.
- Making flexible working the “default” working pattern which would create a positive obligation for employers to accommodate flexible working unless they have a business ground(s) to refuse the flexible working request and it is reasonable for the employer to do so for this reason(s).
- Making SSP payable from the first day of a worker’s incapacity and removing the lower earnings limit requirement. The government will consult on what the percentage replacement rate for those earning below the current flat rate of SSP should be.
- Making paternity and unpaid parental leave a day one right (in line with maternity and adoption leave), extending the existing redundancy protection rules for returning mothers, and introducing a statutory entitlement to bereavement leave.
- Extending the new anticipatory duty to take reasonable steps to prevent sexual harassment (which comes into effect on 26 October) to require employers to take “all” reasonable steps. A duty on employers to prevent harassment by third parties will also be brought in.
- Curtailing the ability to fire and rehire, closing what the government considers to be “loopholes” and replacing the recent statutory code. The government plans to achieve this by lifting the cap on the protective award if an employer is found to not have properly followed the collective redundancy process as well as reconsidering what role interim relief could play in protecting workers in these situations. It will also be automatically unfair to dismiss an employee who does not agree to the variation(s) unless the reason is to mitigate serious financial difficulties and in all the circumstances the employer could not reasonably have avoided the need to make the variation. The government will consult on these proposals and maintains that businesses will still be able to restructure to remain viable and preserve their workforce and the company when there is genuinely no alternative.
- Reforming trade union law, which includes repealing the minimum service levels requirement during key sector strikes as well as increasing rights around the ability of trade unions to collectively bargain with employers.
As is typical with employment legislation, further details on many of the policies in the Bill will be provided through regulations after Royal Assent and most changes will be brought into effect at a later date. The government has indicated that the majority of reforms will take effect no earlier than 2026 as a result.