Proposed Changes to the Employment Rights Bill

The publication of the Employment Rights Bill has caused quite a stir and sets out a wide ranging 28 reforms to employment law.

Whilst we discuss just 5 of those below it’s worth bearing in mind that the Bill simply lays the initial groundwork and much uncertainty remains. The majority of reforms will need consultation and/or additional regulations before they become law and it’s highly likely that lobbying from employers and unions during the passage through parliament will result in changes. As always with the law, the devil will be in the detail, but until then here’s a flavour of what to expect… 

Ordinary Unfair Dismissal

Current law: In the majority of circumstances employees must have worked for their employer for 2 years before they have the right to bring an unfair dismissal claim.

Proposal: The Bill proposes to remove this 2 year qualifying period with the effect that all employees have the right not to be unfairly dismissed from day one.

Comment: It is likely that this proposal will be watered down by the implementation of an “initial period of employment” – essentially a statutory probation period of around 9 months. That said it is expected that, at the very least, a light touch process must still be followed when seeking to dismiss an employee within those first few months. A prudent employer may therefore want to review its recruitment and onboarding practices and consider training for managers on how to manage probation periods effectively.

Liability for all types of third party harassment

Current law: Since 26 October 2024, employers have a proactive duty to take reasonable steps to prevent sexual harassment in the course of employment.  However, currently an employer is not directly liable if a third parties harasses its workers and a worker cannot bring a stand alone claim for third party harassment.

Proposal: The Bill proposes to strengthen the current proactive duty so that employers must take “all” reasonable steps to prevent sexual harassment. It also reintroduces the concept of direct employer liability for third party harassment of its employees. Notably this liability for third party harassment will apply to all types of harassment.

Comment: It will remain to be seen what will constitute all reasonable steps to prevent sexual harassment. The proposal for employer liability for third party harassment poses an onerous obligation on employers, particularly those in sectors where employees frequently come into contact with third parties, as employers will be liable the first time harassment happens. Whilst it remains to be seen what the final form of third party liability will take, in the meantime we suggest you focus on the new preventative duty and aim to take “all” reasonable steps to prevent sexual harassment in the workplace.

Expectant and New Mothers

Current law: Changes were recently made to increase the length of the “protected period” during which employees on certain family leave and whom are provisionally selected as being at risk of redundancy, must be given priority for a suitable available vacancy, where available. The protected period currently starts when an employee tells their employer about their pregnancy and ends, for those taking maternity or adoption leave; 18 months after the expected week of childbirth or child placement.

Proposal: The Bill provides scope for the government to introduce additional protections from dismissal in all circumstances (not just redundancy) for pregnant employees or those on maternity leave or other forms or family leave and those returning from family leave.

Comment: Again we will await further detail of how the protection will take effect and what the carve outs may be. However, it is clear that these changes aim to ensure more flexibility and security for working families. In particular explanatory notes to the Bill state that regulations can be made to ban dismissals of women who are pregnant, on maternity leave, and during a six-month return-to-work period - except in specific circumstances.

Family Rights

Current law:

• Paternity Leave: Employees must have 26 weeks service (assessed at 15 weeks before the expected week of childbirth) to be eligible for paternity leave.

• Parental Leave: Employees must have one year's service in order to take a period of unpaid parental leave (a period of leave available to employee who has or expects to have responsibility for a child under the age of 18, to care for that child.)

• Bereavement Leave: Whilst there is a right to two weeks' parental bereavement leave following the death of a child under 18 or a stillbirth after 24 weeks pregnancy, there is currently no general right to compassionate or bereavement leave at work.

Proposal: Paternity leave, unpaid parental leave and a new bereavement leave will all become day one rights.

Comment: Details of the new bereavement leave will be fleshed out in regulations but it is expected that the new right to bereavement leave will be at least one week.

“Fire and Rehire” Practices

Current law: Dismissal and reengagement or “fire and rehire” is a lawful too used by employers although a  statutory Code of Practice on this subject was brought into force in July 2024 and failure to comply with it may result on an uplift of compensation in certain claims linked to the hire and fire.

Proposal: Unless an employer can show evidence of financial difficulties and demonstrate that the need to make the change in contractual terms was unavoidable, it will be automatically unfair to dismiss an employee:

• for not agreeing to a change in their terms and conditions of employment; or

• in order for the employer to rehire the employee (or another person) on those changed terms and conditions for substantially the same role.

Comment: Whilst the Bill does not directly ban fire and rehire, the circumstances in which such practices can be used will be severely limited. The full consequences on how this may impact an employer wishing for example to harmonise terms and conditions remains to be seen. It is likely that careful consultation and discussion with employees will be needed to reduce the risk of costly claims.

Conclusion

We eagerly await the outcome for further consultations and parliamentary debates to provide a steer as to how these proposals will be implemented and what their final from will look like. Keep your eyes out for more updates from us.

In the meantime, now is the perfect time to review your employment documents and practices to both reduce your legal risk and to plan and prepare for the future contact our employment law team for specialist legal support.