New Employee Rights Bill is Imminent

As you’re no doubt aware, in its ‘New Deal for Working People,’ the Labour Party pledged to introduce a bill that promised extensive reforms to employment law. This comes now in the form of two new bills - the “Employment Rights Bill” & the “Equality (Race Discrimination) Bill”, which look like they’ll be published on 10th – 12th October.

While the exact content of the Bill remains to be seen, it’s set to become one of the most significant pieces of legislation for workers in decades.  The key areas the bill is expected to include are as follows:

Day One Right Not to Be Unfairly Dismissed
 

Protection from unfair dismissal from the employee’s first day in the job, a significant shift from the current two-year requirement. The details of how this will work remain to be seen and it’s currently unclear how this will apply during probation periods, but it’s thought that there’ll be some accommodation for employers during probation periods. This shouldn’t impact existing day-one rights concerning discrimination, whistleblowing, and other rights, which will remain in place.

Restrictions on ‘Fire and Rehire’

Plans to curb the practice of ‘fire and rehire’ (where an employer sacks employees and then re-engages them under new terms). It’s anticipated that if the practice isn’t banned completely, it’ll only be permitted as a last resort to keep businesses viable. The exact nature of these provisions and to what extent the practice should remain legally possible, has been the subject of fierce debate. Whether the government will commit to specific provisions in the Bill or seek further consultation awaits to be seen.

Zero Hours Contracts and Predictability

Labour has said for a long time that it will ban ‘exploitative’ zero-hours contracts and plans to introduce a right to an average-hours contract based on a 12-week reference period. The proposed changes will highly likely include exceptions for seasonal work and overtime arrangements. Linked to this, the Bill is likely to include provisions to ensure employees get reasonable notice for work schedules and fair compensation for cancelled shifts.

How the Bill aims to define an ‘exploitative’ zero-hours contract is yet to be seen.

Fair pay

The bill is anticipated to:

• link the National Living Wage to the cost of living and remove the lower age band for 18-20-year-olds, impacting sectors like retail and hospitality where younger workers are common.
• remove the ability for employers to obtain free labour from young workers in the form of unpaid internships. It’s likely this practice will be banned unless they are part of an established training or education program.
• remove the 3-day waiting period for statutory sick pay and the lower earnings limit, providing immediate support when employees fall ill from Day 1.
• onclude a trial collective bargaining in the adult social care sector to improve pay and conditions, with a review to assess its benefits for other sectors.

Work-life Balance and the Equality Act

The Bill is likely to include many measures to increase work-life balance for all and improve working parents’ rights. Included in Labour’s proposals were:

• the ‘right to switch off’ aimed at ensuring employees receive effective rest periods outside of work,
• a default right to flexible working from day 1 (with a presumption that flexible working should be possible except when it is not reasonably feasible)
• changes to maternity rights banning employees returning from maternity leave being dismissed within six months, except in specific circumstances, providing greater job security.

It remains to be seen whether proposed changes to the Equality Act 2010 will be included in the Employment Rights Bill or in the Equality Bill and whether this will be delivered alongside the Employment Rights Bill. However, a range of changes is expected to be introduced in whatever guise. These are likely to include:

• ‘dual discrimination’ provisions, which make it easier for employees to bring effective discrimination claims where they have been subjected to discrimination based on a combination of protected characteristics.
• A widening of the ambit of Equal Pay claims to create a right to equality in contracts of employment not only in relation to sex, but also disability and race.
• A widening of pay gap reporting, to include reporting based on ethnicity and disability for large employers.
   

Given that these changes will place additional burdens on employers and involve complex areas of law, it may well be that these issues are consulted on before the details of the provisions are finalised.

So what’s next?

We wait to see exactly what the Bill says and what parts of it will be consulted on but much of the above should shortly become part of UK employment law.

If you’re a retained client, fear not, we’ll be keeping a close eye on developments and will be making sure that we keep you legally compliant as there will inevitably be changes required to contracts, policies, handbooks and practices, so we’ll keep you posted!