It is possible the Bill will get Royal Assent by July 2025, thereby becoming the Employment Rights Act 2025 ('Act'). If that happens, some elements of the Act could come into force relatively quickly thereafter. Which elements we do not know yet, but employers need to be aware that the employment law landscape will, relatively soon, be about to change dramatically.
We will be holding a further HR Briefing to discuss the Act, which is likely to be in Autumn 2025, so in this Insight we are touching briefly on a few of the proposed amendments to the Bill by adding additional 'Comment' to our earlier October 2024 article on the Bill.
- Zero-hours contracts – A right to guaranteed hours if working regular hours over a defined period, a right to reasonable notice of a shift, and payment for cancellation of shifts at short notice.
Comment: This is now being extended to include agency workers. Responsibility to offer guaranteed hours to qualifying agency workers will fall on the hirer. Responsibility for providing the agency worker with reasonable notice of shifts will be on both the agency and hirer (the Tribunal will be able to apportion blame where there is a breach). Responsibility to pay any short notice cancellation will fall on the agency but it will be allowed to re-coup this from the hirer under the terms of their contract.
- Introduction of a new automatic unfair dismissal claim where an employee is dismissed for refusing a contract variation (fire and re-hire).
Comment: One commentator predicts this very big change could come into force by October 2025. One little bit of good news for employers is that the Government has dropped a proposal to allow employees interim relief (i.e. forcing employers to keep employees on subject to the conclusion of their claims).
- Existing two-year qualifying period for protection from unfair dismissal to be removed.
Comment: We are still awaiting the detail involved in this very major change to UK employment rights, particularly what the 'light touch' termination process during the new 'initial' probationary period will look like, how Tribunals will assess dismissals in the first months of employment and what the level of compensation will be if found to be 'unfair'. There is no current change to the implementation date – Autumn 2026 – but it won't be long before employers will need to get their ducks in a row on how to manage (and potentially terminate) new employees.
- Removal of 'waiting days' for SSP entitlement so SSP will be payable from day one of sickness. The lower earnings limited (currently £123 per week) will also be removed so that lower earners will be eligible, but the Bill introduces a lower level of sick pay for these staff.
Comment: If someone earns below the lower earnings limit (which is rising to £125 on 1st April 2025) they will be entitled to 80% of the flat SSP rate (where 80% of an employee's normal weekly earnings is less than the flat rate).
- Establishment of Fair Work Agency ('FWA') to enforce rights such as holiday pay and to support employers with guidance on how to comply with the law.
Comment: Under the latest amendments to the Bill, the Fair Work Agency will also be able to:
- bring Employment Tribunal claims on behalf of workers even if the worker chooses not to;
- offer legal assistance for employment cases (with the FWA costs potentially being recoverable from employers if the claim succeeds);
- pursue employers for unpaid holiday and sick pay and;
- impose financial penalties on top, which would go to the government.
These proposed amendments could fundamentally reshape the landscape for employment litigation.
- Extension to collective redundancy consultation requirements so that employers are required to consult where 20 or more staff are affected across the whole business, rather than at a 'single establishment'.
Comment: This has now been watered down. The 'single establishment' rule will remain but, where redundancies are being made at more than one site, the regulations will allow for a prescribed a number of employees (higher than 20 in total) for the purpose of determining when collective consultation will apply to those employees. The statutory cap on 'protective awards' for failing to collectively consult in redundancy situations will also be increased from a maximum of 90 days' basic pay to 180 days' basic pay so ensuring that you collectively consult when necessary will become even more important.
- Making employers liable for third party harassment (not just sexual harassment) – e.g. harassment of employees by suppliers, customers or contractors.
Comment: This may be one of the changes that comes into force early on, possibly by October 2025.
- Increase in time limits to submit a Tribunal claim, from three months (which is currently the time limit for most claims) to six months.
Comment: This is one of the changes that might come into force early on, possibly by October 2025.