Employment Rights Bill receives first reading
The Employment Rights Bill was finally presented to Parliament on 10 October, fulfilling Labour’s pre-election promise to publish it within 100 days of a change of government. It will receive its second reading on 21 October. The Government has also published Explanatory Notes.
What’s in the Bill
As widely expected, it creates a framework for fulfilling the following manifesto commitments:
• Unfair dismissal: Protection against unfair dismissal will become a “day one right”, though different rules will apply during the “initial period of employment” which will be defined in regulations. During this initial period the employer will only need to show a potentially fair reason for dismissal, and will not be required to defend the decision to dismiss as reasonable.
• Zero hours contracts: Workers will have the right to a guaranteed hours contract if they work regular hours over a defined period, as well as compensation for last-minute cancellation of shifts.
• Flexible working: The reasons employers can rely on when refusing a request will be narrowed by importing a reasonableness requirement.
• Fire and re-hire: There will be a new unfair dismissal right which will constrain the use of dismissal and re-engagement to change terms and conditions.
• Family rights: Paternity, parental leave will become day one rights as well a new, broader, right to bereavement leave. In addition there will be stronger protection against the dismissal of pregnant women and new mothers.
• Statutory sick pay: The lower earnings limit will be removed and the waiting period abolished.
• Collective redundancies: Collective redundancy consultation thresholds will apply across the whole business, rather than being limited to individual establishments
• Equality law: Employers’ duties in relation workplace sexual harassment will be strengthened by requiring them to take “all reasonable steps” to prevent it and protection against third-party harassment will re-instated.
• Fair Work Agency: The Bill creates a framework for establishing a single enforcement body to enforce employment rights.
• Trade union rights: The Bill includes measures to protect workers from dismissal and blacklisting for trade union activity, ensure workers understand their right to join a trade union, to simplify the statutory recognition process, and to bring in a new right of access for union officials to meet, represent, recruit, and organise members in workplaces. The Trade Union Act 2016 and the Strikes (Minium Service Levels) Act 2023 will be repealed.
• TUPE: The two-tier code for public sector contracts will be reinstated and strengthened, aiming to ensure that employees working on outsourced contracts will be offered terms and conditions no less favourable to those transferred from the public sector.
What’s not in the Bill
Some measures announced Labour’s election manifesto have not been included in the Bill. Instead the Government plans to open consultations on the following:
• Right to disconnect: preventing employees from being contacted out of hours, except in exceptional circumstances
• Equal pay: making it mandatory for larger employers to report on their disability and ethnicity pay gap
• Employment status: moving towards a single status of worker, creating a simpler “two part” framework for employment status
• Parental and carers leave: reviewing the current measures to ensure they address the needs of employers and workers
Next steps
In a written statement to Parliament, Jonathan Reynolds, the Secretary of State for Business and Trade said this:
As is typical with employment legislation, further detail on many of the policies in the Bill will be provided through regulations after Royal Assent. We expect to 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. Reforms of unfair dismissal will take effect no sooner than Autumn 2026.
There likely to be an even longer timetable for the planned measures that haven’t made it into the Bill.
More details about the implementation timetable – as well as details of measures that can be implemented by “non-legislative routes” are included in Next Steps to Make Work Pay which was published by the Government alongside the Bill.