The Employment Rights Bill: Where are we now and what does this mean for employers? 

Following recent discussions and consultations, the UK Government have announced significant amendments to the Employment Rights Bill that could have financial and legal implications for employers and their business.

The most important changes have been listed below including what they mean for employers.

Important changes

Protection from unfair dismissal:

• The most significant change proposed has been to introduce protection against unfair dismissal from day one (compared to the current 2-year period).
• The government has proposed an ‘initial period of employment’, which would define the first nine-month period.  This allows for 6-month probation period with an extension if needed.
• Employers could rely on performance or conduct issues for dismissal; however, this cannot be applied to redundancies in this initial period.
• This will change the hiring process for employers and highlight the crucial need for performance monitoring from day one.
• A meeting would also be required before dismissal, where employees can bring trade union representation.

Fire & Rehire:

• Although the reforms do not aim to remove fire & rehire practices entirely, it would severely restrict the employer from using loopholes or exploiting the practice.  It would be unfair to dismiss an employee if;
• They decline an alteration of their original employment contract; or
• The employer intends to replace the employee under an amended contract to perform the same duties as before.
• However, if the business can show that they were acting due to financial difficulties or the employer could not have reasonably avoided this, dismissal would not be automatically unfair.

Fair Work Agency:

• A new government body to be established which will have the power to bring claims on behalf of employees.
• an employee does not have to choose to bring a claim forward themselves anymore and instead can rely on the Fair work Agency to bring forward their claims to the employment tribunal.
• The 3-month period where employees could bring their claims forward has also been increased to 6-months.
• Therefore, employers could be subject to legal proceedings brought by a well-funded government body representing employees.

Harassment

• The bill introduces a new liability on all employers in relation to protection against harassment for all staff.
• Employers will be liable if they don’t take all reasonable steps to prevent third-party harassment in the workplace.
• It is clear that this goes way beyond any reasonable steps – and standard, off-the-shelf, policies alone will not help. 
• Employers will need to provide industry and workplace specific training alongside properly drafted policies if they want to avoid a claim.
• Employers will need to act now to be ready in time.

Zero-hour contracts

• If zero-hour or agency employees meet a certain criteria, they will be offered regular hours after a review of their 12-week reference period. However, it remains the worker’s choice if they wish to stay on a zero-hour contract.
• Workers will also have the right to reasonable notice of shifts and are entitled to compensation if given short notice when a shift is cancelled or rescheduled.
• The government is yet to confirm what is meant by ‘regular hours’ and ‘short/reasonable notice’.

Flexible working

• Labour has proposed that flexible working become the default for employees.
• Employers can only deny flexible working if they can prove it is unreasonable; currently there are eight reasons to prove flexible working is unreasonable, which remain on the proposed bill.

Statutory sick pay (SSP):

• The waiting period required for SSP will be removed so that employees are entitled to SSP from the first day of sickness and those who are under the Lower Earning Limit (an estimated 1.3 million employees) will now also be eligible for SSP.

The above are just some of the many changes which will be enacted by the Bill.  Collective redundancy consultation requirements will also be increased, and Trade Union Reforms will lessen restrictions on trade union activity and increase trade union rights.

The Confederation of British Industry (CBI) estimates that the reforms could add £5 billion to business costs, which could have a damaging effect on investments, hiring decisions and overall business growth.

What’s next?

The Bill has passed its third reading and is now being sent to the House of Lords for debate.  If they propose further amendments, they will be sent back to the House of Commons.  But the Bill is likely to receive Royal Assent soon, potentially before the summer break.

This means the changes could come into force as early as autumn.

It is crucial that employers start considering how best to tackle some of the upcoming changes and putting things into place now in order to mitigate the risk factors.

For any advice in relation to this, or to request a meeting to review your current position, please contact our Head of Employment, Ilinca Mardarescu on imardarescu@astonbond.co.uk or call us on 01753 486 777.