The Employment Rights Bill: key facts for HR

The Employment Rights Bill: key facts for HR in summary:

• The Employment Rights Bill introduces 28 key reforms: including the right for zero-hours workers to request guaranteed hours, expanded flexible working rights and day-one parental leave.
• New protections, such as a ban on “fire and rehire” practices and day-one unfair dismissal rights, are also included, with statutory sick pay now starting from the first day of absence.
• Although the bill isn’t expected to become law until mid-2025, HR teams must start preparing for these significant legal changes that will reshape the future of work in the UK.

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Since Labour came back into power last May, the HR community has been eagerly awaiting confirmation of their campaign pledge to deliver a “New Deal for Working People.”

However, no one was entirely sure what this ‘New Deal’ would actually include.  As a result, there’s been lots of speculation and hearsay, leading to a fair bit of uncertainty in HR circles. Fortunately,  all that speculation is now over thanks to the Government formally presenting their new Bill, which outlines 28 significant changes to existing employment laws.

This new legislation, or the Employment Rights Bill to give it its full name, marks the Labour Government’s initial move towards realising the comprehensive reform promised in their “Plan to Make Work Pay.” The announcement provides a clearer picture of the upcoming shifts in employment law across Great Britain – and it’s likely to have a transformative impact on the world of work for years to come.

So, what is the new Employment Rights Bill proposing?

The Employment Rights Bill: more power to employees?

The bill covers 28 separate reforms, each targeting different aspects of employment legislation. A key theme running throughout is the move to give more power and security to employees, especially regarding job flexibility.

One of the more notable provisions addresses the somewhat controversial issue of zero-hours contracts. Employees working consistent hours on these contracts will now have the right to request a move to a guaranteed hours contract. This shift will force employers to commit to offering set working hours and the corresponding pay, while also making these employees eligible for various benefits – such as protections from unfair dismissal, parental leave, and redundancy pay.

Another major inclusion in the Employment Rights Bill is the further expansion of flexible working rights. Where previous laws strengthened the right to request flexible working arrangements, the new bill takes it a step further. Employers rejecting such requests will now need to provide a clear and reasonable justification for their decision.

So, with increased employee rights to flexible working and the shift away from insecure zero-hours contracts, HR teams will once again be in the spotlight. They’ll drive the implementation of these changes and prepare their organisations to offer more predictable working conditions. Plus, they’ll potentially need to accommodate requests for more flexible working arrangements. No pressure, then!

The Bill also includes the following:

Parental leave getting a boost

There’s positive news for working parents in the new Bill, as it seeks to introduce a significant shift in parental leave rights. Under the proposed changes, parental leave will become a day-one entitlement, meaning employees will no longer need to complete a year of continuous service before being eligible.

This reform represents a significant step towards promoting a more positive approach to work-life balance, allowing new parents to take time off to care for their children from the moment they start their job. As a result, HR teams will need to update their absence policies, and ensure managers understand the new rights to provide employees with the necessary support.

Day-one protection from unfair dismissal

The Government is planning to introduce day-one protection from unfair dismissal in the new Bill. This would represent a radical change from the current two-year minimum service requirement for employees to challenge unfair dismissal.

This may sound simple in principle; but questions remain about how this will interact with any probationary period. Early indications suggest a possible nine-month probationary window, during which full protections might not yet apply. However, this part of the Bill has yet to be (at the time of writing at least) not fully fleshed out.

A ban on fire and rehire

The controversial “fire and rehire” practice, where employers terminate contracts and rehire workers on new terms when negotiations fail, will also be addressed under the new Bill. Although not currently illegal, the process has required adherence to a statutory code of practice.

The new law will ban this tactic in all but extreme cases, limiting employers’ ability to drastically alter workers’ conditions without agreement

Other notable reforms

The bill also introduces changes to statutory sick pay, which will now be payable from the first day of absence rather than the fourth. Additionally, statutory bereavement leave will become a legal entitlement, providing more support to employees in times of personal loss.

When will these changes take effect?

Now that’s a good question! While the Government has hailed this bill as the biggest overhaul of workers’ rights in a generation, the changes won’t come into force immediately. In fact, there’s no set date for any of the changes coming into effect.

Having said that, employers will have time to adjust, as the bill still needs to go through parliamentary debate and the legislative process, which is expected to conclude by mid-2025. Also, it’s worth noting that many of the new rights won’t take effect until further regulations are finalised by the Secretary of State, with these expected in 2026.

However, businesses should start preparing now by reviewing contracts, policies, people management infrastructure and procedures to ensure they’re ready for the upcoming changes. Staying informed and proactive will be essential for maintaining compliance in this evolving legal landscape.

But wait! There’s more…

It’s important to note that the Employment Rights Bill is only the first stage of Labour’s broader “Plan to Make Work Pay.” The Government has already hinted at future reforms, with plans to explore additional protections like the right to disconnect from work and potentially introducing a single employment status.

As a result, employers and their HR teams face a busy few years ahead as they navigate these significant legal shifts. So, keeping up to date with developments will be crucial to managing these transitions smoothly and staying compliant with the new rules.