Employment Rights Bill 2024

As promised by the new labour government, the Employment Rights Bill was published today and presented the biggest changes to employment law in a generation.

The Bill promises many things, chief among which is the new day-one right to protection from unfair dismissal. Prior to the introduction of the Bill, employees had to have 2 years’ service with an employer (subject to a few exceptions) before they were eligible to bring a claim for unfair dismissal. Under the new changes, the Bill will now require Employer’s to establish a fair reason for dismissing an employee, and also demonstrate that they have followed a fair procedure when dismissing the employee.

Whilst some may see this as fair, the changes will undoubtedly force employers to overhaul their recruitment process to ensure they are hiring the best person for the job. This change seeks to break down the historic presumption of some employers who used to view the first 2 years of employment as a ‘trial period’, within which they could dismiss an employee for any reason.

The other major change introduced by the Bill is the crack down on zero-hour contracts. Whilst it has always been argued that zero-hour contracts are beneficial and ‘needed’, they often provide little to no flexibility to an employee, given they have no guarantees shifts or income. Historically, employees on zero-hour contracts can work 40+ hours one week, then 5 hours for the next 3 weeks. The Government has not outright banned zero-hour contracts, however, has made it clear that these practices are not fair, and will not be tolerated. The Bill further gives workers the right to have a contract which reflects the numbers of hours worked over an average period. The intention of this is to give workers some stability in relation to their hours and pay, and ensures workers are given reasonable notice of their shifts.

The Bill also recognises the new additional duty for employers to protect workers from third-party sexual harassment which comes into force on the 26th October. The new law requires employers to take “all reasonable steps” to prevent sexual harassment. Should it be found that an employer has not done this, the Employment Tribunals would be able to increase any compensation awarded to an employee by an additional 25%.

Another area highlighted by the Bill, is the duty for employers to ensure tips are allocated fairly between employees. Failure to do so can now be construed as discrimination and give rise to claims for unlawful deduction from wages, given the definition of “wages” was amended to include “qualifying tips, gratuities and services charges allocated to the worker”.

It is understood that it can be a stressful time for employees when they are unable to work due to sickness. The Bill aims to alleviate some concerns by removing the requirement for an employee to be earning a minimum amount, which is currently £123 a week, and also now makes Statutory Sick Pay payable from the first day of sickness.

The Bill has introduced other “Day-one” rights for employees such as Paternity, Parental and Bereavement leave, which will eradicate the 26-week qualifying wait time that was previously needed.

With the introduction of this new Bill, employers will no doubt have to consider whether their business is ready for all the changes. At Buxton Coates, we pride ourselves in helping our clients adapt and ensure they are ready for any and all changes in legislation. If you have any queries about any of the changes introduced by the new Bill, our Employment and HR Team are here to help.