The UK’s Employment Rights Bill includes 28 individual reforms that look likely to change the way organisations of all sizes recruit staff. There have been some new developments in the past week, so this article aims to cover the current situation and how the changes could affect your business.
The bill took a big step forward when it returned to Parliament on Monday, October 21, for its second reading and passed comfortably (386 votes to 105). Next year will be spent consulting on the details of the changes that will also require secondary pieces of legislation to update things like codes of practice.
Once approved by parliament, the reforms will not come into effect until 2026 at the earliest (with unfair dismissal reforms taking effect no sooner than autumn 2026).
Employment Rights Bill consultations get under way
The first consultation will focus on rights to guaranteed hours for zero-hours and low-hours workers. The aim is to give workers flexibility with added security, so they are offered regular hours calculated over a certain period. Other requirements include reasonable shift notices, compensation for late cancellations and protection for agency workers.
Consultations will also cover redundancy processes and the controversial ‘fire and rehire’ strategy. Currently, an employer that does not follow redundancy rules faces a penalty of up to 90 days’ pay per employee – but this could double to 180 days, or be decided by tribunals. In short, businesses planning to restructure will face a higher bar of compliance.
Another significant consultation involves updating trade union laws, focusing on simplifying procedures for industrial action ballots and extending a union’s mandate for industrial action to up to 12 months. Small firms will need to establish clearer and stricter rules over union engagement.
Finally, the government will also consult on a plan for day-one Statutory Sick Pay (SSP) entitlement. This removes the current three-day waiting period and the lower earnings limit, with the potential for calculating SSP based on a percentage of average earnings.
Will probationary periods become a safety net?
One of the biggest concerns for employers surrounds introducing day-one rights to protection from unfair dismissal, replacing the current two-year period. Shifting the balance of power to employees will naturally cause businesses to take a low-risk approach to recruitment, potentially increasing outsourcing and temporary contracts.
As a compromise, the government is proposing a new statutory probationary period of nine months, giving employers more time to assess the performance of new staff. However, business owners, managers and HR teams must ensure their recruitment processes are watertight to avoid the risk of costly tribunals.
What else do employers need to consider?
Another area of concern for employers is the move to make flexible working a day-one right for new employees. However, businesses will retain the ability to refuse flexible working requests if they deem them to be not practical. Employers will need to prove why flexible working is unreasonable, meaning more admin for line managers and HR teams.
Parental leave will also become a day one right, which threatens to be a massive change for small businesses, as current rules state staff only become eligible after one year of service.
The Employment Rights Bill is seen as just the first step of the Labour government’s ‘Plan to Make Work Pay’. Future employment law reforms, covered by the ‘Next Steps’ strategy, could include moving to a single worker status.
How can businesses prepare for the changes?
Small and medium-sized businesses will need to take swift action to be ready before the proposed Employment Rights Bill becomes law. As an experienced HR consultant, I am helping my clients stay informed on the proposals while reviewing their current employment policies and procedures.
If you require professional HR advice, JT HR Consultancy is here to help you understand these changes and adapt effectively. Don’t hesitate to reach out with questions on how to keep your business compliant and ahead of upcoming regulations. Contact me today.
