Govt Factsheets Expand on Employment Rights Bill

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The UK Government introduced the Employment Rights Bill on 10 October 2024, marking what is set to be a significant shift in workers’ rights. You can read our summary of the Bill here.

Expanding on the information contained within the Bill, a number of official factsheets have now been published by the Government, covering key areas of reform.

The Government has also launched initial consultations, feedback from which may result in amendments to the Bill’s provisions. Key areas of the consultation include collective redundancy practices, zero-hours contracts, industrial relations, and statutory sick pay adjustments. The consultations close in early December 2024.

 

Employment Rights Bill Factsheets

 

To clarify the Bill’s scope and implications, the government has issued ten factsheets, each addressing specific areas:

 

Factsheet 1: Employment Rights Bill Overview

 

The Employment Rights Bill, introduced in October 2024, aims to modernise and enhance employment protections, marking a significant shift in UK labour laws. It focuses on improving job security, family-friendly rights, fair pay, and workplace equality.

Key provisions include banning exploitative zero-hours contracts by enforcing guaranteed hours and fair notice, as well as ending ‘fire and rehire’ practices, making such dismissals automatically unfair. The Bill also introduces day-one rights for unfair dismissal protection and strengthens redundancy rights by applying consultation requirements across an entire workforce. Family-focused changes extend immediate access to paternity and parental leave, unpaid bereavement leave, and greater protections for pregnant employees and new mothers. Flexible working rights are strengthened, requiring employers to justify denied requests.

The Bill also promotes workplace fairness by mandating preventative measures against sexual harassment and enhancing gender pay gap reporting. It reforms Statutory Sick Pay by expanding eligibility, ensures fair tipping policies, and introduces Fair Pay Agreements in adult social care. Trade unions gain greater organisational freedom, with repeals of restrictive laws and enhanced rights of access.

The Fair Work Agency will oversee enforcement, consolidating various employment rights and regulations. While consultations are planned for 2025, the reforms will be phased in by 2026, allowing businesses time to adapt.

 

Factsheet 2: Adult Social Care Negotiating Body

 

The Employment Rights Bill introduces the Adult Social Care (ASC) Negotiating Body to address long-standing issues in the ASC sector, including low pay, high turnover, and limited bargaining power. Currently, care workers have minimal union representation (around 20%), and wages are often restricted to the National Minimum Wage or slightly above. Despite a growing demand for care, ASC faces challenges with domestic recruitment and retention, which are exacerbated by low wages and poor working conditions.

The proposed Negotiating Body will empower care workers, employers, and sector representatives to negotiate pay and terms, helping to mitigate recruitment issues and ensure sustainable high-quality care. Through secondary legislation, the Secretary of State can establish and regulate the Body, covering membership, scope, negotiation processes, and dispute resolution.

This reform is timely as the ASC sector faces critical workforce shortages, with 131,000 vacancies daily and projections showing a need for 29% more roles by 2035. The sector also deals with an ageing UK population, with the number of people aged 85+ expected to grow significantly by 2045. The Negotiating Body is positioned as a collaborative solution to improve working conditions and address sector challenges in the long term.

 

Factsheet 3: Bereavement, Paternity and Unpaid Parental

 

The Employment Rights Bill introduces key provisions for Bereavement Leave, Paternity Leave, and Unpaid Parental Leave, aiming to provide employees with immediate rights and enhance job flexibility. Currently, bereavement leave is limited to parents grieving a child under 18, and employees must have 26 weeks of service for Paternity Leave and one year for Unpaid Parental Leave. This delay can discourage employees from switching jobs, impacting career mobility and employer recruitment.

The new bill establishes Bereavement Leave as a day-one right for employees grieving the loss of any close relation, guaranteeing at least one week off, extendable to 56 days post-bereavement. For Paternity and Unpaid Parental Leave, continuity of service requirements will be removed, allowing employees to qualify from their first day on the job. The bill also removes restrictions on when Paternity Leave can be taken relative to Shared Parental Leave, providing families with greater flexibility.

These changes are expected to support employees’ mental well-being and job satisfaction, with bereavement alone costing the UK economy £23 billion annually. By easing access to leave, the bill aims to support working families while aiding businesses in talent acquisition and retention.

 

Factsheet 4: Fair Work Agency

 

The Employment Rights Bill introduces the Fair Work Agency (FWA) to streamline and strengthen state enforcement of employment rights, addressing current inefficiencies where most rights rely on individual claims through employment tribunals. At present, only a few employment rights, such as the National Minimum Wage, are state-enforced, leaving many workers unable to pursue violations like underpayments.

The FWA will consolidate existing enforcement functions under a single authority, providing a centralised support system for both workers and employers. Its responsibilities will include monitoring compliance for holiday pay, Statutory Sick Pay, and potentially other rights. The agency will also absorb functions from dissolved bodies, including the Gangmasters and Labour Abuse Authority, maintaining their roles within the FWA.

As an executive arm of the Department for Business and Trade, the FWA will enforce employment rights through Secretary of State-appointed officers, with added powers for civil penalties and worker compensation orders. An advisory board, representing businesses, unions, and experts, will guide FWA actions.

Once implemented, the FWA will balance enforcement with employer support, targeting non-compliant businesses to level the field for fair employers. This initiative aims to close gaps in worker protections, particularly for low-paid workers often denied basic rights like holiday pay.

 

Factsheet 5: Fire and Rehire

 

The Employment Rights Bill seeks to curtail “fire and rehire” practices, where employers dismiss employees unwilling to accept new contract terms and then re-engage them under altered conditions. Currently, employers can use fire and rehire if they can justify the need for contractual changes due to business reasons, such as economic challenges or updating terms and conditions. This tactic, however, often coerces employees to accept reduced terms under threat of job loss.

The Bill aims to prevent exploitative use of fire and rehire by making such dismissals automatically unfair unless employers meet strict criteria. Employers must demonstrate financial hardship, show that the changes address or mitigate this hardship, and prove that modifying terms was unavoidable. Even if these criteria are met, an employment tribunal will review the dismissal’s fairness, examining the employer’s consultation efforts and any offered compensation for contract changes.

By enforcing these restrictions, the Bill offers employees greater security in their agreed terms, allowing them to plan with confidence. It also ensures that fair employers won’t face competitive disadvantages against those using unfair dismissal tactics.

 

Factsheet 6: School Support Staff Negotiating Body

 

The Employment Rights Bill will establish a School Support Staff Negotiating Body to provide a national framework for negotiating pay, terms, and conditions for school support staff in England. Currently, these staff lack a national pay body, and their terms are often locally modified, lacking consistency. This new body will include representatives from employees, employers, and the Secretary of State, alongside an independent chair. It will negotiate fair pay, advise on training, and define career progression paths for support staff. Ratified agreements will be incorporated into contracts, enhancing support staff recognition and contributing to educational standards in schools.

 

Factsheet 7: Statutory Sick Pay

 

The Employment Rights Bill introduces reforms to expand Statutory Sick Pay (SSP) coverage and eliminate waiting days, significantly benefiting low-paid workers. Currently, SSP is only available to employees earning above the Lower Earnings Limit (£123 per week) and is paid from the fourth day of absence. This system excludes about 1.3 million low-paid workers and discourages employees from taking necessary sick leave, potentially spreading illness and reducing productivity.

Under the new Bill, SSP will be available from the first day of sickness, and eligibility will be extended to all employees, regardless of earnings. For workers below the flat SSP rate (£116.75), SSP will be set at a percentage of their earnings. This reform offers financial security during illness, particularly for low-wage workers, encouraging them to recover fully before returning to work. SSP enforcement will fall under the newly created Fair Work Agency, streamlining processes and strengthening compliance.

These changes aim to support public health, improve workforce productivity, and reduce the economic impact of presenteeism, which currently results in £25 billion lost annually. Consultations will determine the exact SSP rate for low earners, enhancing fairness and stability for all employees.

 

Factsheet 8: Trade Unions

 

The Employment Rights Bill introduces sweeping reforms to enhance trade union rights, repealing restrictive measures from the 2016 Trade Union Act and introducing new provisions for union access, representation, and collective bargaining. This repeal removes requirements like the 40% support threshold for industrial action in critical sectors and strict supervision of picketing while retaining the six-month expiration for strike ballots. The government’s intent is to make union activities easier, streamlining ballot procedures and supporting secure electronic voting for industrial action.

The Bill also provides unions with formal workplace access rights, allowing them to negotiate entry agreements with employers. This enables unions to more effectively recruit, organise, and represent members, with arbitration available in cases of dispute. The Bill also simplifies the union recognition process, removing the previous requirement to secure 40% workforce support in recognition ballots; now, only a majority vote among participating workers is required for union recognition.

The Bill further expands protections against blacklisting, explicitly extending safeguards to include any discriminatory use of predictive technology. Unions will also gain statutory facility time for equality representatives to promote fair treatment and workplace equality, with reasonable access to facilities, enhancing representation and industrial relations. These changes aim to empower unions, improve collaboration with employers, and foster a fairer work environment.

 

Factsheet 9: Unfair Dismissal

 

The Employment Rights Bill proposes significant changes to unfair dismissal protections, removing the current two-year qualifying period required for employees to claim ordinary unfair dismissal. As such, employees will have protection against unfair dismissal from their first day on the job.

Existing protections for dismissals deemed “automatically unfair,” such as those related to pregnancy or whistleblowing, will remain unchanged.

To balance this protection with employer needs, the Bill introduces a new statutory probationary period, anticipated to last nine months. During this probation, employers will have a “lighter-touch” dismissal process to fairly terminate employment if the role or employee is not a suitable fit. After this period, standard dismissal protocols will apply, providing employees with stronger job security while giving employers time to assess new hires. The two-year qualifying period for written reasons for dismissal will be reduced, allowing employees to request these reasons after completing probation.

These reforms are set for implementation by autumn 2026.

Employers will retain flexibility with contractual probation policies and can set non-statutory benefits as needed.

 

Factsheet 10: Zero Hours Contracts

 

The Employment Rights Bill introduces protections for workers on zero-hours contracts, addressing concerns over unpredictable hours and financial insecurity. While zero-hours contracts can offer flexibility, the government aims to curb one-sided flexibility that unfairly places financial risks on workers.

Under the Bill, employers will be required to offer guaranteed hours based on an average from a specified reference period, anticipated to be 12 weeks. Workers will have the right to accept or decline these hours and remain on a flexible contract if they prefer. The Bill mandates reasonable advance notice of shifts; employers who fail to meet this standard may face tribunal claims. Furthermore, if shifts are cancelled, moved, or shortened on short notice, employers will be required to compensate affected workers.

These measures seek to encourage employers to plan schedules responsibly, providing workers with greater job security and predictability. The government will consult on the specific details, including how these rules will apply to agency workers, to ensure effective implementation and fair treatment across sectors.

 

Early Consultations

 

The Government has moved quickly to launch the first stage of consultations, despite earlier plans to delay them until 2025. Four core topics are now currently under review:

 

Collective Redundancy and Fire and Rehire

 

The Government seeks to strengthen the collective redundancy framework by either raising the cap on protective awards from 90 to 180 days or removing it entirely. Interim relief—a provision allowing employees to maintain their salaries and employment benefits while awaiting a full hearing—may also be extended to claims associated with fire and rehire situations. In 2025, further consultation is anticipated on extending the consultation period for large-scale dismissals, doubling it to 90 days for redundancies affecting over 100 employees.

 

Zero-Hours Contracts

 

Proposed reforms focus on requiring employers to offer guaranteed hours based on the average worked over a specific reference period, potentially 12 weeks, for eligible employees. The consultation also questions whether this measure should apply to agency workers.

 

Industrial Relations

 

This consultation examines possible changes to the industrial relations framework, including provisions around strike mandates, ballot notice periods, recognition procedures, and enforcement of access rights.

 

Statutory Sick Pay (SSP)

 

For lower earners, SSP may transition from a flat weekly rate to a variable rate based on earnings. This consultation invites views on an appropriate percentage rate to ensure fairness in compensation.

 

Implementation Timeline

 

The Bill passed its second reading in the House of Commons on 21 October 2024 and now moves to detailed review by the Public Bill Committee. The committee will examine the Bill and report its findings in January 2025. While most reforms are slated for implementation in 2026, the Government has indicated it may allow additional time for employers to prepare for specific changes.

 

Need Assistance?

 

The Employment Rights Bill represents a significant shift in the UK’s employment framework. Employers will need to remain alert to the ongoing developments and to take action to review, adapt and comply as the changes take effect. For guidance on the implications of the changes, or to discuss how to prepare your organisation for the new rules, contact us.

 

View the full government factsheets here >>

 

 

Author

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility.

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners, we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

Read more about DavidsonMorris here

 

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

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