Since the Employment Rights Bill (the Bill), was published on 10 October 2024 (see our previous alert here) the government has produced a raft of further documents that demonstrate its commitment to pushing the Bill forward at speed.
Factsheets
The first such documents to be published, on 18 October 2024, were ten factsheets about the Bill – one giving a high level overview of the Bill as a whole and nine summarising the proposals on particular topic areas, namely: unfair dismissal; fire and rehire; trade unions; zero-hours contracts; bereavement, paternity and unpaid parental leave; statutory sick pay (SSP); the Fair Work Agency; the Adult Social Care Negotiating Body; and the School Support Staff Negotiating Body.
Each of the factsheets includes sections that briefly explain the current law, the intention behind the proposed changes, and how the reforms will work, as well as highlighting some key statistics that have informed or are otherwise relevant to the proposals. For example, the unfair dismissal factsheet, which covers the proposal to make unfair dismissal a day one right subject to an initial/probationary period during which a lighter touch regime would apply, notes that around 9 million employees have been working for their employer for less than two years, so have very limited protection under the current law. It also cites data from the Office for National Statistics (ONS) Business Insights and Conditions Survey showing that 70% of businesses (excluding microbusinesses with 0 – 10 employees) operate a probation policy, and that 97% of businesses that operate a probation policy apply probationary periods that do not exceed six months.
Consultations
On 21 October 2024 four consultation papers were published, each addressing a different area of proposed reform. A brief summary of each of the consultation papers is set out below. We will be responding to these consultations on behalf of our clients. If you have any comments on the government's proposals that you would like us to reflect in our responses (including on an anonymous basis), please email your usual DACB contact, Joanne Bell or Sara Meyer, whose contact details can be found below.
Collective redundancies and fire and rehire
The main change proposed in the Bill relating to collective redundancies is to remove the words "at one establishment" from the legislation that sets the collective redundancy consultation threshold, so that employers will have to consult collectively whenever they are proposing to dismiss 20 or more employees for redundancy in a 90 day period anywhere across their organisation.
On fire and rehire, the key proposed change is to make it automatically unfair to dismiss an employee for refusing to agree to a change to their terms and conditions of employment, albeit that there will be an exception where the employer can demonstrate that the change in terms was necessary to alleviate serious financial difficulties and could not reasonably have been avoided.
The consultation on collective redundancies and fire and rehire does not ask for comments on those main proposed changes, but seeks views on the following accompanying proposals:
- the government's proposal to increase the cap on the protective award that can be made where an employer has breached its collective consultation obligations. The two options being considered are increasing the maximum protective award from 90 to 180 days' pay per employee, and removing the cap on the protective award entirely; and
- whether interim relief should be available to employees who bring claims for a protective award, and/or those who bring a claim for automatically unfair dismissal in relation to fire and rehire (which is one of the new rights the Bill will introduce). A right to interim relief would entitle an employee to continue to be paid pending the final hearing of their claim. However, in order for the tribunal to award interim relief, the employee would need to show that their claim is "likely" to succeed. The consultation document notes that this is intended to further disincentivise employers from making a calculated decision to 'buy out' employees' rights to be collectively consulted about proposed redundancies, and from adopting a fire and rehire strategy unless it is genuinely a last resort.
One unexpected development is the indication in the final paragraph of the consultation paper that the government intends to gather further views on strengthening the collective consultation framework in 2025 – including the possibility of increasing the minimum consultation period where an employer is proposing to dismiss 100 or more employees from 45 to 90 days (effectively reverting to the minimum period of consultation that applied prior to April 2013). If taken forward, this proposal would entail significant additional costs for employers, particularly in conjunction with the proposed removal of the reference to dismissals being at "one establishment", such that employers will have to take into account proposed redundancies across their business when determining their collective consultation obligations.
This consultation closes on 2 December 2024.
Trade unions
The proposed changes to trade union law set out in the Bill and the consultation paper on reforms to trade union law, which is described as a consultation on "creating a modern framework for industrial relations", are far-reaching and have the potential to lead to greater union presence in many workplaces and an increase in the number of employees whose terms are determined by collective bargaining.
The consultation seeks views on:
- strengthening the prevention of unfair practices during the trade union recognition process;
- removing the requirement for trade unions to ballot their members every 10 years on whether they wish to maintain a political fund;
- simplifying industrial action ballots by reducing the amount of information unions must include in ballot notices provided to employers, providing a greater timeframe for unions to inform employers of the results of industrial ballots, and reducing the amount of information that unions must provide in industrial action notices;
- reducing the length of notice of industrial action that unions must provide to employers. As currently drafted, the Bill would reduce this notice period from 14 days to 7, but the consultation seeks views on whether 7 days is an appropriate period taking into account modern working patterns and practices;
- extending the period for which a ballot in favour of industrial action provides a valid mandate (currently this is set at 6 months, with the government proposing an increase to 12 months);
- updating the law on repudiation of industrial action to make it more straightforward and thus improve unions' ability to protect themselves from liability in the event of unofficial industrial action or wildcat strikes;
- clarifying the law on prior call, which currently prevents unions from taking official protected industrial action where there has been a prior call to take unofficial industrial action. The proposed change is intended to allow unions lawfully to ballot for industrial action where union members have walked out in emergency situations in fear of their safety; and
- establishing an enforcement framework, to be administered by the CAC, to support union officials' rights of access to the workplace.
The consultation also confirms that the government intends to develop and consult on further potential reforms to trade union law that would be introduced via secondary legislation once the Bill has received Royal Assent.
This consultation closes on 2 December 2024.
Strengthening SSP
The Bill proposes to remove the waiting days that currently apply to SSP, meaning that it will be payable from an employee's first day of sickness absence. It also proposes removing the requirement that an employee must earn above the Lower Earnings Limit (currently £123.00 per week) to be eligible for SSP.
The consultation on strengthening SSP notes that the proposed changes will mean that for some lower earners (including those earning below the Lower Earnings Limit), the rate of SSP to which they will be entitled will be calculated as a percentage of their earnings instead of the flat weekly rate (currently £116.75). The consultation seeks views on the appropriate percentage, noting the need to ensure that it strikes the correct balance between providing the financial security that employees need, retaining incentives to return to work when appropriate, and balancing the costs to businesses. The options proposed range from 60% (which is cited as the lowest rate that the government's internal modelling suggests would not leave employees worse off) to 80% (which is the rate that was initially proposed when the idea of removing the lower earnings limit for SSP eligibility was floated back in 2019).
This consultation closes on 4 December 2024.
Application of zero-hours contract measures to agency workers
The Bill does not introduce a ban on zero-hours contracts, but instead includes provisions introducing a right to a contract with a guaranteed number of hours based on the number of hours a worker has worked during a reference period, as well as a right to reasonable notice of shifts and compensation payments for shifts that are cancelled or curtailed at short notice.
As drafted, these provisions will not apply to agency workers. However, the government is consulting on whether they should apply to agency workers and, if so, how they could be adapted to do so. In particular, the consultation seeks views on whether the responsibility for offering a guaranteed hours contract to an agency worker, and on providing reasonable notice of shifts and compensation payments for their short notice cancellation or curtailment, should fall on the agency or on the hirer/end user.
This consultation closes on 2 December 2024.
Parliamentary progress and next steps
The Bill passed its second reading in the House of Commons on 21 October 2024. The next step in the parliamentary process is the Public Bill Committee stage, where a cross-party committee of MPs will scrutinise the Bill line by line, before reporting back to parliament with any suggested amendments. As part of this process, the Public Bill Committee has launched a call for evidence, seeking views on the Bill from individuals and organisations with particular interest or expertise in the matters concerned. The expected deadline for the Committee to report to Parliament is 21 January 2025, although it may do so earlier.
We will keep clients updated on the progress of the Bill over the coming months.
