What’s in the new Employment Rights Bill 2024?

The UK government has published its new Employment Rights Bill, with the stated aim of boosting UK workers’ rights on remuneration, flexibility, and job security. Delve into the key proposals on the table with Cybill Watkins, Product Legislation Manager at Zellis.

The new bill represents the first phase of the Labour administration’s Plan to Make Work Pay. It now has to progress through both parliamentary houses and is likely to undergo several changes before eventually reaching a stage when it may be signed into law.

According to the Chartered Institute of Personnel and Development (CIPD), the proposed changes represent the “greatest shift in employment legislation in decades”. The HR membership organisation broadly welcomed the spirit of the Employment Rights Bill.

We share the Government’s ambition to raise employment standards and job quality, and access to work for all. Done right, these changes can improve working lives and help drive economic and social benefits.”

Peter Cheese, Chief Executive, CIPD

However, the CIPD also said it remained “concerned about some of the details of the proposals”, which would take time to work through. In fact, the government has stated that most of its proposed 28 individual employment reforms are unlikely to come into force before 2026.

It has also published a ‘Next Steps to Make Work Pay’ paper alongside the Employment Rights Bill. This explains how it intends to carry out its plan, which includes 30 further proposed reforms to follow at a later date.

What are the main changes in the Employment Rights Bill 2024?

Day-one rights

The Bill introduces several day-one rights for employees:

• Removal of the two-year qualifying period for protection from unfair dismissal.
• Extended protection for pregnancy, maternity leave, and six months after returning to work.
• Immediate access to paternity, shared parental, adoption, and bereavement/compassionate leave.
• Statutory sick pay changes, including removal of the three-day waiting period and the current earnings limit of £123 per week.

Flexible working as default

Flexible working would become the default for all employees from day one. To deny it, employers would need to prove an individual’s request is unreasonable. Possible reasons for denial would include untenable additional costs and inability to meet customer demand. This moves the burden of proof away from the employee to the employer.

Ban on zero- or low-hours contracts

Workers on zero- or low-hours contracts would have the right to choose guaranteed hours contracts after working regular hours over a 12-week reference period. This means employers would need to provide reasonable notice of shift requirements and offer compensation for cancellations. Employees would have the right to remain on existing zero- or low-hour contracts, if they preferred.

Fire and rehire practices

The Bill seeks to amend the law on unfair dismissal related to ‘fire-and-rehire’ practices. Dismissals for failing to agree to employment contract changes would be automatically treated as unfair. There would be some exceptions to this, for example if employers could show evidence of financial difficulties or that contractual changes were unavoidable. This amendment is in line with Acas’ Code of Practice.

Changes to redundancy practices

Employers would be required to undertake collective consultations for mass redundancies (20 or more employees within 90 days) . They would also need to provide at least 30 days’ notice before the first redundancy.

Enhanced protection against sexual harassment

The Bill seeks to raise the bar on employers’ duty to prevent sexual harassment. Organisations would need to take “all reasonable steps” to protect workers, including against harassment from third parties e.g. contractors and suppliers.

Equality action plans

Public authorities and private organisations with 250+ employees would be required to publish Equality Action Plans to tackle gender inequality. This remit might broaden beyond gender over time. This is in addition to the existing gender pay gap reporting requirements.

Creation of a Fair Work Agency

A new Fair Work Agency would consolidate powers of existing enforcement bodies to crack down on unscrupulous employers. It would enforce minimum wage, statutory sick pay, holiday pay, and other employment rights. It would also cover the employment tribunal penalty scheme, labour exploitation, and modern slavery.

In consultation: Statutory probation period for new recruits

This would be the first time a probationary period to assess an employee’s suitability has been mandated in law the UK. The aim is to enable employers to “take chances on hires while giving more people confidence to re-enter the job market or change careers”.

Organisations would be expected to give probationary employees at least some warning that their performance is not up to scratch before dismissing them. The government has indicated it favours a maximum probation period of nine months.

What else is on the cards for UK labour laws?

New Equality (Race and Disability) Bill

First announced in the Labour Party manifesto, this legislation would require employers with more than 250 employees to publish ethnicity and disability pay gap data. The aim is to try and end pay discrimination.

Right to switch off

This right is intended to prevent employers from contacting employees out of hours. But it will not now be mandated through legislation, as previously expected. Instead, it will be introduced through a statutory code of practice. The idea is to allow employers to implement the policy in a way that makes most sense for themselves and their workforce.

Stay tuned for more

The Employment Rights Bill represents a significant proposed shift in UK employment legislation. However, the full details are yet to be thrashed out and confirmed. Most reforms, if enacted, would be unlikely to come into force before 2026.

As always, we’ll continue to provide updates on this and other legislation affecting payroll and HR, to help you stay informed, prepared, and compliant.