10.10.2024

 

Since the general election, the Government has been working to meet the commitment it made both in its election manifesto and in the King’s Speech to introduce an Employment Rights Bill to Parliament within 100 days of entering office.

Today, the Government has introduced the Employment Rights Bill to Parliament marking its first significant step towards implementing the employment law reforms set out in its ‘Plan to Make Work Pay: Delivering A New Deal for Working People’. It has also published a document ‘Next Steps to Make Work Pay’ which sets out the Government’s vision and objectives for Make Work Pay, details the provisions of the new Bill, and the additional wider reforms that the Government plans to deliver.

What does the Bill cover?

The Bill - which runs to 150 pages - is wide reaching. Our legal experts are currently carrying out a detailed review of its contents and we will update you further when this work has been completed. In the meantime, the key changes in the Bill as outlined in ‘Next Steps to Make Work Pay’ are as follows:

  • Protection from unfair dismissal to be available from day one for all workers. Employers will continue to be able to operate probationary periods to assess new hires, and there will be a lighter-touch process for employers to follow if they wish to dismiss employees who are not right for the job. The Government will consult on whether this lighter-touch process should involve holding a meeting with the employee to explain the concerns about the individual’s performance, at which they could choose to be accompanied by a trade union representative or a colleague. The length of probationary periods will be a matter for further consultation, although the Government favours nine months. The Government will also consult on the compensation regime for successful unfair dismissal claims during the probationary period and any necessary changes to the ACAS Code of Practice on Disciplinary and Grievance procedures.
  • Making unpaid parental leave and paternity leave day one rights.
  • Introducing a new statutory right to bereavement leave.
  • Making flexible working the default from day one, with employers required to accommodate requests as far as is reasonable.
  • Ending ‘exploitative’ zero-hour contracts, ensuring such workers (and those with a ‘low’ number of guaranteed hours) have a right to a contract that reflects the number of hours they regularly work over a 12-week reference period. The Government will consult on the operation of subsequent review periods. The Government has indicated that where work is genuinely temporary, there will be no expectation to offer permanent contracts, and that workers on full-time contracts who occasionally pick up overtime will not be affected.
  • Ensuring that all workers get reasonable notice of any changes in shifts, with proportionate compensation for any shifts which are cancelled or curtailed at short notice.
  • Establishing a new single enforcement body, the Fair Work Agency, to strengthen enforcement of workplace rights. This will bring together existing enforcement functions, including: minimum wage and statutory sick pay enforcement; an employment tribunal penalty scheme; and labour exploitation and modern slavery as well as introducing the enforcement of holiday pay policy.
  • Ending ‘unscrupulous’ practices of ‘Fire and Rehire’ and ‘Fire and Replace’. This will be done by reforming the law to provide effective remedies (such as lifting the cap on the protective award relating to collective consultation and introducing the potential of interim relief for workers). The Government has confirmed that it intends to maintain the ability of employers to restructure to remain viable where there is genuinely no alternative.
  • Strengthening provisions on collective redundancy.
  • Strengthening statutory sick pay by removing the lower earnings limit to make it available to all workers as well as removing the three-day waiting period.
  • Increasing protection from sexual harassment.
  • Strengthening protections for pregnant women and for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work except in specific circumstances.
  • Introducing gender pay gap action plans for large employers to address their gender pay gap.
  • Requiring large employers to publish menopause action plans setting out how they will support workers going through the menopause.

Next steps and timing of planned changes

Many of the policies outlined above will require further consultation on technical details before they can be implemented – for example, what ‘low hours’ constitutes for each measure in relation to zero hours contracts, the length and design of the new statutory probation period, and how flexible working by default will work in practice. Much of the Employment Rights Bill is an ‘enabling’ piece of legislation – simply giving the Government the powers it requires to introduce the individual elements at a later stage rather than including everything in the Bill itself. This allows the Government to lay the foundations for what it wants to achieve while also taking additional time to refine the proposals. We also anticipate some amendments to the legislation during its passage through Parliament.

The various consultations are likely to take place once the Bill has completed most of its passage through Parliament, i.e. mid-2025. As a result, the majority of reforms will take effect no earlier than 2026. Reforms to unfair dismissal will not come into effect any sooner than Autumn 2026, and until then the current qualifying period will continue to apply.

Other changes

The Government has confirmed in ‘Next Steps to Make Work Pay’ that it plans to make other changes in due course including the following:

  • Updating trade union legislation, removing certain restrictions on trade union activity and simplifying the process of statutory trade union recognition, including allowing modern and secure electronic balloting for trade union statutory ballots and simplifying the amount of information that unions are required to provide in industrial action notices. Some of these changes may be introduced via amendment to the Bill.
  • Adapting measures relating to zero hours contracts to agency workers.
  • Launching a Call for Evidence (by the end of the year) on tightening the ban on unpaid internships.
  • Removing the age bands so that every adult worker benefits from a genuine living wage.
  • Introducing the “right to switch off” allowing workers to disconnect and not be contacted by their employer outside of working hours through a statutory code of practice.
  • Conducting a review of the parental leave system and reviewing the implementation of carer’s leave.
  • Moving towards a single status of worker (i.e. merging “worker” and “employee” into one) and transitioning towards a “simpler two-part framework” for employment status differentiating between workers and the genuinely self-employed.
  • Modernising health and safety legislation and guidance.
  • Lengthening employment tribunal limitation periods
  • Launching a Call for Evidence to holistically examine a wide range of issues relating to the TUPE Regulations including how they are implemented in practice.
  • Consulting with ACAS on enabling employees to collective raise grievances about conduct in the workplace.
  • Encouraging employers and trade unions to sign up to the Dying to Work Charter to support terminally ill workers.
  • Introducing measures to support disabled people and those with health conditions to enter and stay in work.

Equality (Race and Disability) Bill

The Government confirms in ‘Next Steps to Make Work Pay’ that it will be producing an Equality (Race and Disability) Bill. The Government will begin consulting on this legislation in due course, with a Bill to be published during this parliamentary session. The Government says that the Bill will:

  • extend equal pay rights to protect those suffering discrimination on the basis of race or disability;
  • introduce mandatory ethnicity and disability pay reporting for larger employers (i.e. those with 250 or more employees) to help close the ethnicity and disability pay gaps;
  • ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay; and
  • implement a regulatory and enforcement unit for equal pay (with involvement from the trade unions).

How we can help

We will be providing further updates on the detail of the Bill shortly when we have completed a more detailed review.

Make UK’s Policy Team has been engaging closely with Government trade unions and other representatives discussing the detail of the Government’s Plan to Make Work Pay to ensure that the Government’s proposals benefit both manufacturing employers and their employees. We will continue to represent the views of Make UK members to Government, sharing insights, suggestions, and concerns with them via meetings, roundtables, and the upcoming consultations on proposed changes to the law.

In the meantime, if you are a Make UK subscriber, our legal experts will keep you updated on key points that arise over the coming weeks. You can also speak to your regular adviser with any queries you may have about these various employment law proposals and to request further consultancy support. Make UK subscribers can also access guidance on a wide range of employment law topics including template policies and drafting guidance in the HR & Legal Resources section of our website.

If you are not a Make UK subscriber, our expert HR and legal advisers can offer guidance on a consultancy basis. For further information contact us on 0808 168 5874 or email [email protected].