Stephen Britton
- 11 Nov 2024
- Law Blog
- Employment Law
By the end of 2026, employment rights are expected to be considerably different to those in force today.
‘Although much of the detail will be the subject of consultation which then needs to be pinned down in regulations or codes of practice, the publication of the Employment Rights Bill in October 2024 indicates the big changes that are on the horizon,’ says Stephen Britton, Head of the Employment Law Team.
Protection from unfair dismissal, family-friendly rights, guaranteed hours for vulnerable workers, and protection from harassment, are all areas that will see new rights or an expansion of existing rights. The Government policy paper ‘Next steps to making work pay,’ mentions further future reforms and areas for consultation.
Stephen outlines the main points in the Bill, and the changes to employer’s national insurance contributions which were announced at the autumn budget.
The Bill also includes provisions relating to addressing the gender pay gap that will apply to employers with more than 250 employees, as well as proposals relating to trade union rights and industrial action. These issues are outside the scope of this article.
Wider Rights to Claim Unfair Dismissal
One of the biggest proposed changes is that protection from unfair dismissal will become a day-one right. At present, employees usually need two years’ employment to bring a claim for unfair dismissal. Under the Bill, a statutory probation period would be introduced - the Government’s preference is nine months - during which employers can fairly dismiss if they follow a ‘light touch’ procedure. This light touch procedure will not apply to dismissals for redundancy, meaning employees at risk of redundancy will have full protection from their first day of employment.
The consultation will cover how a tribunal should calculate an employee’s compensation if they were unfairly dismissed during the initial period. According to the Government, the earliest these changes would be made is autumn 2026.
New Limits on ‘Fire and Rehire’
At the moment, if an employer cannot get an employee to agree changes to their terms and conditions, they may be able to follow a process to fairly dismiss the employee and offer to re-engage them on a new contract. This is often referred to as ‘fire and rehire’. Under the Bill, this would result in an automatically unfair dismissal, unless the employer can show it was not avoidable due to financial difficulties.
Enhanced Collective Redundancy Consultation Rights
If more than 20 employees could be fired and rehired, this triggers collective redundancy consultation obligations. The Government is consulting on removing the current cap of 90 days’ pay that can be awarded for failing to collectively consult in this situation.
Under the current rules, employers must consult collectively in a redundancy situation if the number of redundancies proposed is 20 or more within 90 days ‘at one establishment’. The Bill increases the likelihood that employers must consult collectively by requiring the employer to count the proposed redundancies across all their sites and work locations, rather than at just one establishment.
New Right to Guaranteed Hours
There is no right at present to a guaranteed number of hours’ work. The Bill would require an employer to offer guaranteed hours to a worker on a zero-hours contract or low-hours contract based on the hours worked during a defined period. This would not apply if there was a short-term need for work. The Government suggested the right would apply after 12 weeks, but this will be consulted on.
New Right to Reasonable Notice of Shifts and Payment for Cancelled Shifts
Some workers will be entitled to reasonable notice of a shift that they are required to work. If the employer cancels a shift, the worker will have to be given reasonable notice of this. If not enough notice is given, the worker would receive compensation to reflect the loss of income. Details such as the minimum amount of notice that needs to be given to cancel a shift will be consulted on.
Explanation for Refusal of Flexible Working Request
The same eight business reasons for refusing a flexible working request will be available as at the moment, but the Bill would add a new requirement for the refusal to be reasonable. The employer will also have to explain to the employee why their refusal is reasonable.
New Obligation to Inform about Right to Join a Trade Union
The law currently requires employers to include certain information in their workers’ contracts of employment or statements of particulars. The Bill would add informing workers of their right to join a Trade Union to this list.
New Negotiating Body for Adult Social Care Sector
The Bill would allow the Government to set up a new body to negotiate terms and conditions for workers in the adult social care sector. Agreed terms would apply to all workers in the sector. If no agreement is reached, the Secretary of State could set the rates of pay.
Statutory Sick Pay More Widely Payable
The current limitations on statutory sick pay (SSP) are that employees are only entitled to SSP from the fourth day of illness and if they earn more than a weekly minimum (currently £123). These limitations would be removed, with consultation on the rate payable to employees who earn less than SSP.
Widening Obligations and Liabilities for Harassment at Work
Since 26 October 2024, employers must take ‘reasonable steps’ to prevent sexual harassment of staff. The Bill will extend this to ‘all reasonable steps’.
The Bill would ensure that workers who report sexual harassment to their employer are protected in the same way as if they had made a whistle-blowing disclosure. Currently this protection could apply, but it is not explicit. The Bill adds reporting sexual harassment to the list of disclosures that can entitle the worker to protection as a whistle-blower.
Employers will be liable for harassment of their staff if they fail to take all reasonable steps to prevent harassment by a third party, such as a customer or supplier. The harassment could relate to any protected characteristic, such as gender or race.
Extending Family-Friendly Rights
The Bill would extend the scope of a number of existing protections and rights:
- bereavement leave is currently only available to parents if a child under 18 dies or a baby is stillborn. The Bill would make it a wider right to at least one week’s bereavement leave, with the relationship with the deceased to be specified in the regulations;
- parents can currently take up to 18 weeks’ unpaid parental leave before their child turns 18 after one year’s employment. Instead, employees would be eligible from the first day of employment;
- under the current law, employees are only eligible for two weeks’ paternity leave if they have been employed for six months. This will become a day-one right; and
- currently pregnant women and women on maternity leave or returning from maternity leave must be offered any available alternative employment in a redundancy situation. This will be widened to protection against dismissal, other than in specified circumstances and will apply to anyone on or returning from family-friendly leave for a specific period.
Government Enforcement of Holiday Pay and Other Rights
The Bill would give the Government the power to enforce holiday pay rights. A new public body would have this power, as well as taking on current enforcement powers, such as for the minimum wage and statutory sick pay, to bring these powers together in one body.
Autumn Budget 24: Employer’s NIC
From 6 April 2025, the employer’s rate for national insurance contributions (NIC) will increase from 13.8% to 15%. The threshold from which it becomes payable for each employee is reduced from £9,100 to £5,000 per year.
The employment allowance is increased from £5,000 to £10,500, meaning eligible employers (mostly small employers) can reduce their total NIC payments for the tax year 2025/26 by £10,500. Employers can check the government guidance on eligibility.
How We Can Help
Although the Employment Bill changes are not expected until 2026, they will bring a significant shift in how employers will need to operate to minimise the risk of a tribunal claim. For instance, thorough recruitment processes and effective performance monitoring during probationary periods will become increasingly important. We can advise you on how to prepare for these changes.
For further information, please contact our Employment Law Team on 0800 542 4245 or email info@sillslegal.co.uk. We have teams in all of our offices across the region.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.