Current status of the Employment Rights Bill
News from our business partners
This is a guest blog by REC Business partner, JMW.
Introduced in the House of Commons on October 10, 2024, the Employment Rights Bill aims to revolutionise the industry with substantial amendments and new provisions. Covering 28 areas of employment law, the Bill will implement some of the most significant changes to employment rights in this generation.
The Employment Rights Bill is currently at the committee stage in the House of Lords. The last scheduled committee stage sitting is on June 18, and as of writing this blog, no further dates have been scheduled. Consequently, the Bill will proceed to its report stage. Although the date for Royal Assent remains unconfirmed, commentators anticipate that certain provisions of the Bill will be implemented before 2026.
Key provisions:
Zero-Hour Contracts
Workers who meet specific conditions will be guaranteed hours at the end of a relevant reference period that reflects their actual hours worked. Furthermore, workers will be entitled to reasonable notice of shifts and changes, as well as compensation for shifts that are cancelled or rescheduled.
Fire and rehire
The Bill will limit employers' ability to use fire and rehire tactics by amending the law on unfair dismissal. Dismissals for refusing contract changes or for re-engagement on varied terms will be deemed automatically unfair unless employers can demonstrate:
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evidence of financial difficulties that were affecting, or were likely to affect, their viability;
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the changes were to eliminate, prevent, significantly reduce or significantly mitigate the effects of those financial difficulties; and
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the need to make the change in contractual terms was unavoidable.
Time limits
Clause 10 of the Bill extends the timeframe for Claimants to file most claims with the Employment Tribunal from three months to six months, with the exception of redundancy claims, which already have a six-month limit.
Umbrella regulations
The Bill will revise the definition of 'employment business' to include umbrella companies within the regulatory scope of the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
Fair Work Agency (FWA)
The Employment Rights Bill establishes a new state enforcement agency for specific employment rights, known as the Fair Work Agency (FWA). The FWA will assist workers in employment cases, and if a claim is successful, the agency's costs will be recoverable from the employer.
Unfair dismissal
The Bill proposes to eliminate the two-year qualifying period for claiming unfair dismissal. The Government plans to introduce a 'light touch' procedure for dismissals during an 'initial period' (yet to be determined) for issues such as poor performance, misconduct, capability, or some other substantial reason.
Statutory Sick Pay (SSP)
The Bill will remove the Lower Earnings Limit which means the lowest-paid employees will now be entitled to receive SSP from the first day of sickness absence. For those earning below the Lower Earnings Limit, SSP will be 80% of their normal weekly earnings or £118.75, whichever is lower.
Preparing for the Implementation of the Bill
Employers should remain informed about the Bill and its progression through the final stages. It is important to note that no immediate action is required regarding the proposed changes, as the law has not yet been amended. However, in the interim, employers can ensure that newly drafted policies or contractual documents retain sustainability in anticipation of the upcoming changes.
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