October 2024
The Government published its Employment Rights Bill (the “Bill”) within its 100-day deadline on 10 October 2024, announcing that it had unveiled significant reforms to employment rights. Alongside the Bill the Government published its Next Steps to Make Work Pay document, which sets out its visions, objectives and plan for the phased delivery of the manifesto commitments promised in its Plan to Make Work Pay.
In this update, we summarise some of the key headlines for employers, including likely timings, what’s in the Bill and what’s not.
How can you stay updated?
Keep an eye out for more detailed updates and our take on the reforms, as we will be updating our Policy Hub in due course.
We will also be running a series of webinars on the key reforms and the practical impacts of these for employers...watch this space for further details.
Key takeaways for employers
- The Bill is expansive as it proposes to bring forward a massive 28 individual employment reforms and is 158 pages long – a lot for employers to get to grips with!
- The reforms are designed to modernise the employment rights framework with the aim of growing the economy, raising living standards and creating opportunities for all. Taken as a whole, the Bill includes the most significant package of employment law reforms that we have seen in recent decades. The reforms will lead to fundamental changes in key HR processes (such as recruitment and dismissal), a sea change in employee relations (including paving the way for a new era of partnership with unions) and an increased focus on employment law compliance and enforcement – increasing the burdens on businesses whilst simultaneously enhancing workers’ rights.
- The Bill will now make its way through Parliament and may be amended along the way. It is also described as phase one of the Government’s plan for reform, so there’s much more to come before employers can start preparing meaningfully for implementation. The Government explains in the Next Steps document that:Consultation will happen on several reform areas in the Bill. Targeted consultations aimed at seeking significant input from all stakeholders are expected to begin in 2025.
- Much of the detail will be fleshed out by regulations, codes of practice and guidance – which will come later.
- Stakeholders will receive appropriate time to prepare for the changes ahead of commencement and most reforms will take effect no sooner than 2026, with reforms to unfair dismissal no sooner than Autumn 2026. This is welcomed to ensure that the law is not rushed, is well thought through and so that employers and the public can have a say to ensure it is balanced. There will be some earlier reforms too, such as the repeal of the Strikes (Minimum Service Levels) Act 2023 and changes to the minimum wage (which will come into effect in April 2025).
- Given the Government is taking a phased approach to implementation of its Plan to Make Work Pay, there are some reforms that are not in the Bill. For example: Reforms that can be delivered outside of the Bill using existing powers or through other means (such as taking forward the right to switch off through a statutory code of practice, which has been promised to be delivered alongside the Bill’s passage through Parliament).
- Reforms that will be contained in the Equality (Race and Disability) Bill (the “Equality Bill”) such as extending the pay gap reporting regime to ethnicity and disability, which will be subject to future consultation and will be published in draft in this Parliamentary Session.
- Longer-term reforms, which the Government recognises will take longer to undertake and implement. These include reviews into the parental leave and carer’s leave systems and the introduction of a single worker status (merging the status of 'employee' and 'worker').
What's in the Bill?
We set the key reforms out below:
Day one rights for unfair dismissal
Tough restrictions on fire and rehire and changes to the collective consultation threshold
Zero hours contracts not banned but new rules on guaranteed hours
Strengthened flexible working rules
Strengthened harassment provisions
Increasing family friendly rights, including stronger dismissal protection for pregnant women and returners from statutory family leave
Amendments to gender pay gap reporting
New enforcement body with broad powers
Making Statutory Sick Pay available from day one for all employees
Modernising industrial relations
What's not in the Bill?
As predicted, there are some reforms not contained in the Bill, including (but not limited to):
- A “Right to Switch Off”, which is promised to be delivered through a statutory code of practice alongside the Bill’s passage. The Government says this will prevent employees from being contacted out of hours, except in exceptional circumstances, to allow them the rest and get the recuperation they need to give 100%, though it remains to be seen how much “teeth” these changes will have in practice.
- A “strong commitment” to end pay discrimination which will be delivered in the Equality Bill, which will be subject to future consultation and which will be published in draft form by July 2025. This includes measures such as extending pay gap reporting to ethnicity and disability for large employers and measures on equal pay and extending equal pay rights to protect workers suffering discrimination on the basis of race or disability.
- Longer-term delivery of reforms, such as: Consulting on the framework for a single “worker” status for employment. This is both big and complicated. It would certainly be a huge change if employment rights currently only available to traditional employees are extended to the current category of “workers” —potentially increasing the impact of all the above reforms.
- Undertaking reviews into the parental leave and carer’s leave systems.
- Launching a call for evidence to examine the Transfer of Undertakings (Protection of Employment) Regulations 2006.