Big changes are afoot this month with the introduction of the new Labour government’s Employment Rights Bill, aiming to fix problems perceived by the Labour party during their long stint in opposition, such as addressing one-sided flexibility, supporting more family friendly rights and prioritising fairness, equality and wellbeing of workers, ensuring fair pay, modernising trade union legislation and improving enforcement of employment rights. Consultation over the Bill will start now and continue in 2025, with the aim to implement the changes in 2026. We also bring you updates on sexual harassment, proposed employment rights for parents of still-born children and those born prematurely, guidance on the new Tipping Act, and a change in equality office.

• Legislation: Government publishes Employment Rights Bill
• Protection at Work: The Worker Protection (Amendment of Equality Act 2010) Act 2023 to comes into force on 26 October 2024 and EHRC updates its harassment guidance and publishes eight-step guide for employers on preventing sexual harassment at work
• Parents: New private members’ bill on Still-Birth and leave for Neo-natal care
• Pay: New Tipping Act and supplementary Code of Practice comes into force –  guidance available
• Equality: Office for Equality and Opportunity replaces the Equality Hub

Legislation: Government publishes Employment Rights Bill

Background: In September 2021, the Labour Party first introduced its plan for working people in its ‘A new deal for working people’, launched at the Labour Party Conference. The document underwent several iterations, with the final version, Labour’s Plan to make work pay: Delivering a new deal for working people (New Deal), published just prior to the release of the manifesto in June 2024. The Labour Manifesto reiterated a number of the promises set out in the New Deal document and stated that the New Deal would be implemented in full within the first 100 days of the Labour government. The King’s Speech on 17 July 2024 confirmed that Labour’s plans would be implemented through the Employment Rights Bill 2024 (Bill) and the Equality (Race and Disability) Bill 2024. The Employment Rights Bill 2024 was published on 10 October 2024.

When will the Bill come into force? Commencement regulations will be required to bring provisions into force, with the exception of provisions on trade unions and industrial action, which will come into force two months from the day on which the Act is passed, and the repeal of the Strikes (Minimum Service Levels) Act 2023 and related provisions, which will come into force on the date the Act is passed.

What does the Bill plan to do? The Bill implements a large number of the reforms promised in the Labour Party’s New Deal document. Alongside the Bill, the government has also published a policy document entitled Next Steps to Make Work Pay (Next Steps) and a set of explanatory notes. The document sets out the government’s plan generally as well as the next steps in implementation for many of the measures.

Laid out below is a summary of the current position, the changes promised prior to the Bill and the expected reforms in relation to the measures set out in the Bill.

Zero hours and ‘low hours’ contracts: Zero-hour contracts are contracts of employment which lack a minimum number of guaranteed working hours and which do not require a minimum commitment from the employee. This means the working hours of an individual are unpredictable and may vary wildly from week to week. Although, individuals on zero-hour contracts do have a number of statutory protections, these are based solely on employment status. At present there is no definition as to what ‘low hours’ means. This will be the subject of consultation.

In order to provide more security for individuals on zero-hour contracts, the Labour Party promised to:

• ban ‘exploitative’ zero hours contracts;
• ensure a right to a contract reflecting the number of hours regularly worked and is likely to be based on a 12-week reference period;
• ensure workers get reasonable notice of any shifts or working time changes, with proportionate compensation for cancelled or shortened shifts;
• introduce anti-avoidance measures; and
• end ‘one sided’ flexibility by ensuring all jobs provide a baseline level of security and predictability.

The Bill sets out a right to guaranteed hours where a worker regularly works more than those hours. The guaranteed hours are calculated according to a reference period, which is expected to be 12 weeks. Employers will be required to make an offer of guaranteed hours to workers at the start of employment and at the end of each reference period. Workers can also submit claims to the employment tribunal where an employer has failed to comply with their duty to offer guaranteed hours, or where that offer does not comply with the necessary requirements.

The Next Steps document states that the government intends to consult on the details and to ensure the Bill’s provisions on zero hours contracts are effectively and appropriately applied to agency workers.

Fire and re-hire: Currently, employers wishing to introduce changes to the terms and conditions of an employment contract have the option of terminating the contract (with the requisite notice) and offering immediate re-engagement to the affected employee on new terms. While in government, the Conservative party introduced a statutory Code of Practice on dismissal and re-engagement with guidance on engaging in meaningful consultation and exploring alternatives. However, the Labour Party have since committed to ending ‘fire and rehire’ practices entirely in addition to reforming the existing fire and rehire Code and introducing more effective remedies against abuse.

In place of the Code of Practice, clause 22 of the Bill inserts a new section 104I into the Employment Rights Act 1996, which makes a dismissal unfair where the reason for the dismissal is that:

• the employer sought to vary an employee’s contract and the employee did not agree, or
• the employer sought to employ another person or re-engage the employee under a varied contract to carry out substantially the same duties.

This will not apply where the employer shows that the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business, and in all the circumstances the employer could not reasonably have avoided the need to make the variation.

Unfair dismissal qualifying period: Under section 108(6) of the Employment Rights Act 1996 the right not to be unfairly dismissed generally only arises where the employee has been continuously employed for a period of at least two years; however the rule is subject to a number of statutory exceptions. The Labour Party has promised to remove the two-year qualifying period for unfair dismissal claims, making it a ‘day one’ right.

The Bill will repeal s.108 of the Employment Rights Act 1996 and remove the two-year qualifying period. However, there will be a new ‘initial period of employment’ (or ‘probationary period’) during which the employer can dismiss an employee for certain reasons, subject to following a specified procedure. The length of the initial period and the details of the procedure will be subject to consultation—see Probationary periods below.

Sick pay (SSP): SSP is currently available to employees who are deemed to have been too ill to undertake any work for a period of at least four consecutive days. Employees must also earn above the lower weekly earnings limit (currently at £123) in order to qualify for SSP. The Labour Manifesto laid out the Party’s commitment to removing the qualifying period for statutory sick pay making it also a ‘day one’ right and removing the lower earnings limit. The Bill reflects both these promises in clauses 8 and 9.

The government will consult on the percentage replacement rate for those earning below the current flat rate of SSP, before bringing it into force as an amendment to the Bill. Furthermore, the Next Steps document states that the new Fair Work Agency will be given responsibility for ensuring SSP enforcement.

Parental leave: Parents of a child (whether born to the parents or adopted) are entitled to take up to 18 weeks of unpaid leave to care for that child at any time before the child’s 18th birthday. Currently parents must have worked continuously for an employer for at least one year to qualify for parental leave. The Bill will make parental leave a ‘day one’ right.

Probationary periods: As noted above, the Bill introduces the concept of an ‘initial period of employment’ (or ‘probationary period’) where dismissals for specified reasons will not be considered unfair. The government has further committed in the Next Steps document to consulting on the length of that initial statutory probation period and to consult on how it interacts with ACAS’s Code of Practice on disciplinary and grievance procedures to ensure that ‘day one’ rights will not be affected by the statutory probation period.

Flexible working: The Employment Rights Act 1996 provides employees with a statutory right to request certain specified changes to their employment contract. However. employees must have had at least 26 weeks’ of continuous service in order to qualify for the right. Earlier legislative changes were made from 6 April 2024, including making the right to request a day one right. However, the grounds upon which an employer can reject a request remain broad.

The Bill introduces a reasonableness requirement into an employer’s decision not to grant flexible working requests, and requirement for the employer to explain to the employee why they consider it reasonable to refuse the request.

Protection for new mothers: Currently, dismissal on the grounds of pregnancy or maternity will be deemed to be an automatically unfair dismissal. This means that an employee dismissed under these circumstances does not require the two years of continuous employment ordinarily needed to bring a claim in the employment tribunal. A woman who takes ordinary maternity leave is also entitled to return to the ‘same job’ at the end of that leave unless that job is no longer available.

The Plan to make work pay also included a promise to strengthen these protections by making it unlawful, except in specified circumstances, to dismiss a woman who has had a baby for six months after she returns to work.

The Bill provides the Secretary of State with the power to make provision for regulations restricting dismissal of an individual during pregnancy or for a period after pregnancy.

Paternity leave: Currently an employee may take paternity leave to support a mother or adopter in taking care of a new child, subject to (among other things) having at least 26 weeks’ qualifying employment. Under the Bill, paternity leave will become a ‘day one’ right.

Bereavement leave: Employees are entitled to Parental bereavement leave (PBL) following the death of a child if they meet the requisite parental relationship conditions and comply with the notice requirements. PBL is a ‘day one’ right; however it is currently only available to employees. The Bill extends the right to take PBL to any ‘bereaved person’. PBL will no longer be limited to circumstances involving the death of a child. A bereaved person will be entitled to take leave for the death of any person as long as they meet the other relevant conditions set out in the regulations.

Equality action plans: Amendments to the Equality Act 2010 made by the Bill will require large employers (with 250 employees or more) to publish equality action plans showing the steps that the employer is taking in relation to their employees with regard to prescribed matters related to gender equality, and to publish prescribed information relating to the plan. These will need to cover addressing the gender pay gap and supporting employees going through the menopause.

Fair Work Agency: The Labour Party has committed to amalgamating the HMRC National Minimum Wage unit, the Employment Agency Standards Inspectorate and the Gangmasters Labour Abuse Authority into a single enforcement body known as the Fair Work Agency. The Bill establishes the Fair Work Agency which will be responsible for:

• minimum wage and statutory sick pay enforcement;
• the employment tribunal penalty scheme;
• labour exploitation and modern slavery; and
• enforcement of holiday pay policy (a new responsibility, which was not originally included in the New Deal document).

Fair pay agreements for social care workers: The Labour Party promised to consult on a new Fair Pay Agreement to create a New Deal for Social Care Workers. The Bill provides for the creation of an Adult Social Care Negotiating Body with a remit over remuneration, terms and conditions of employment and any matters specified by the Secretary of State, for social care workers. Agreements over remuneration which have been ratified by the Secretary of State must be paid in accordance with the agreement and any other term will have effect as a term of a worker’s contract. A consultation on how the Fair Pay Agreement should work is promised ‘soon’.

School support staff: The School Support Staff Negotiating Body, the pay body for school support staff, was abolished some time ago. The Labour Party stated that it would reinstate the Body, and task it with establishing a national terms and conditions handbook, training, career progression routes and fair pay rates for support staff to help to address the recruitment and retention crisis. The Bill re-establishes the School Support Staff Negotiating Body.

Trade unions: The Employment Rights Bill makes provision for changes to trade union law relating to:

• a worker’s right to a statement of trade union rights;
• a trade union’s right of access to a workplace;
• trade union recognition;
• members’ contributions to political funds, and public sector check-off arrangements;
• time off rights for trade union officials, learning representatives and union equality representatives; and
• blacklisting.

An employer will be required to give a worker a written statement that the worker has a right to join a trade union at the same time as the employer gives the worker a written statement of employment particulars. Secondary legislation will stipulate what information must be included in the statement, the form the statement must take and the manner in which the statement must be given.

The Employment Bill introduces a new framework for trade unions to request physical access to an employer’s workplace for the purposes of meeting, representing, recruiting or organising workers, and/or facilitating collecting bargaining. Access agreements are to be negotiated in the first instance between the employer and the trade union, with a referral to the Central Arbitration Committee provided for if agreement cannot be reached.

Thresholds required for a trade union to qualify for, and achieve, statutory recognition will be amended, with double thresholds removed where relevant and replaced by a simplified requirement for unions to demonstrate appropriate levels of support. In relation to individual contributions to a political fund of the trade union, the default position will be that individual members will be contributors to the political fund unless they specifically opt out (rather than the other way around, which is the current position.

Changes to the check-off arrangements for public sector workers introduced by s.15 of the Trade Union Act 2016 on 9 May 2024 are to be repealed.

Where an employer permits an employee or a learning representative to take time off for carrying out their duties under the Trade Union and Labour Relations (Consolidation) Act 1992 (ss.168 and 168A), it will also be expected, if requested, to provide reasonable accommodation and other facilities for carrying out those duties.

A new right for reasonable time off for union equality representatives is introduced to support duties related to promoting equality in the workplace.

Secondary legislation will be introduced to extend blacklisting protections; it will be unlawful not only to compile lists of trade union members etc, but also to use such lists for the purposes of discrimination in relation to recruitment or in relation to the treatment of workers, and/or to sell or supply such lists for those purposes.

Industrial action: Changes are proposed in relation to:

• balloting and notification requirements for lawful industrial action
• lawful picketing;
• detriment and dismissal for participating in lawful industrial action; and
• restrictions on those working in regulated services from participating in industrial action.

Ballot participation thresholds will be done away with and support thresholds for industrial action will be the majority of those voting in the ballot. Additional balloting thresholds for those engaged in public services will also be done away with. Information that must be included on the voting paper in a ballot is to be significantly reduced and simplified. Provision is made for electronic balloting to be introduced.

The period of notice to be given to an employer to notify it of industrial action is to be reduced from 14 days to seven days.

Lawful picketing will no longer be dependent on the union supervision requirements contained in s.220A of the Trade Union and Labour Relations (Consolidation) Act 1992, which is to be done away with.

A new right for workers to be protected from detriment for participating in protected industrial action, or to deter them from doing so, is to be introduced, and protection against dismissal for participating in protected industrial action is to be extended.

The Strikes (Minimum Service Levels) Act 2023 is to be repealed, and industrial action restrictions on workers working in services that have been designated ‘relevant’ services under the Act are accordingly lifted.

Further reform: In addition to the anticipated reforms announced in the Labour Party’s New Deal and Manifesto, the Bill includes some measures which had not previously been anticipated. Clauses 16–18 of the Bill contain new provisions on sexual harassment, expanding the duty to prevent sexual harassment set to come into force on 26 October 2024 under the Worker Protection (Amendment Of Equality Act 2010) Act 2023. The new sections introduce:

• liability for harassment by third parties;
• provision for disclosures about sexual harassment qualifying as a protected disclosure under S.43B of the Employment Rights Act 1996; and
• the addition of specified steps that an employer must take to demonstrate that they have taken reasonable steps in the prevention of sexual harassment for the purposes of the legislation.

The government will also consult on lifting the cap of the protective award if an employer is found to not have properly followed the statutory collective redundancy processes and on the role interim relief could play in protecting workers in these situations.

As stated above, the Next Steps document provides a general timeline on the implementation of the measures and reforms set out in the Bill. The majority of the measures in the Bill are set to be brought in through commencement legislation, and a number will go through a consultation process before their eventual implementation. According to the Next Steps document, the government expects to start consulting in 2025, although the government is ahead of itself in this regard and launched four consultations on 21 October 2024. The four consultations, which run until early December 2024, seek views of the Bill’s measures relating to a new right to guaranteed hours for zero or low hours workers, collective redundancy consultation and ‘fire and rehire’ practices, trade union legislation and statutory sick pay.  This means that any substantive reforms are unlikely to take effect much before 2026. This also means the Bill is likely to see some amendment before all the measures fully come into force.

The Next Steps document also refers to a number of reforms not included in the Bill which the government is nevertheless committed to introducing. These are:

• a full review of the parental leave system;
• a review of the implementation of carer’s leave and an examination of the benefits of introducing paid carer’s leave;
• a consultation on workplace surveillance technologies;
• consultations on the creation and implementation of a single ‘worker’ status;
• a call for evidence on TUPE 2006 regulations and processes;
• a review of health and safety in the workplace aimed at modernising guidance and regulations;
• a joint consultation with ACAS on collective grievances;
• the introduction of a new National Procurement Policy Statement aimed at reforming the public procurement ahead of the commencement of the Procurement Act 2023 in February 2025; and
• an extension of the Freedom of Information Act 2000 to private companies that hold public contracts and publicly funded employers.

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Protection at work: The Worker Protection (Amendment of Equality Act 2010) Act 2023 to comes into force on 26 October 2024 and EHRC updates its harassment guidance and publishes eight-step guide for employers on preventing sexual harassment at work

The Worker Protection (Amendment of Equality Act 2010) Act 2023 comes into force on 26 October 2024. The Act will:

• Introduce a duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Give employment tribunals the power to uplift discrimination compensation by up to 25% where an employer is found to have breached the duty to prevent sexual harassment.

At present it’s only a duty to take ‘reasonable steps’, the new Employment Rights Bill already includes a change to ‘all reasonable steps’ which no doubt will come into force in due course.  The Employment Rights Bill will also re-introduce employer liability for third party harassment in relation to all relevant protected characteristics under the Equality Act (sex, sexual orientation, age, disability, etc.)

Sexual harassment occurs where both:

• A engages in unwanted conduct of a sexual nature.
• The conduct has the purpose or effect of either violating B’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.

The EHRC has published an updated technical guidance for employers on the steps they can take to prevent sexual harassment in the workplace. The EHRC has also published an eight-step practical guide to assist with this preventative duty, including developing an effective anti-harassment policy, using a reporting system that allows workers to raise an issue either anonymously or in name, and regularly monitoring and evaluating the effectiveness of an employer’s actions.

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Parents: New private members’ bill on Still-Birth and leave for Neo-natal care

The Still-Birth (Definition) Bill (a Private Members’ Bill sponsored by Liberal Democrat peer, Baroness Benjamin) received its first reading in the House of Lords on 14 October 2024. The Bill would amend the definition of still-birth to apply from 20 weeks into a pregnancy, rather than from 24 weeks as currently is the case, including for the purposes of entitlement to maternity allowance under section 35 of the Social Security Contributions and Benefits Act 1992.

Currently under the Neonatal Care (Leave and Pay) Act 2023 (which received Royal Assent on 24 May 2023) employees with responsibility for children receiving neonatal care will be entitled to receive up to 12 weeks of paid leave per year. Regulations bringing into force its main provisions are awaited.

The latest edition of HMRC’s Employer Bulletin confirms that from 6 April 2025 HMRC will begin to administer statutory neonatal care pay (SNCP). The Bulletin informs employers that SNCP:

• is claimable in the first 28 days following the birth of a child after they have spent seven consecutive days in neonatal care

• can be paid for a maximum period of 12 weeks but will allow some flexibility dependent upon individual parental circumstances and other statutory payments to which they may be entitled.

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Pay: New Tipping Act and supplementary Code of Practice comes into force –  guidance available

On 1 October 2024, the Employment (Allocation of Tips) Act 2023 and statutory Code of Practice on fair and transparent distribution of tips came into force. Under the Act, employers must distribute tips in a ‘fair and transparent’ manner, passing all tips, gratuities, and service charges on to workers, without deductions. Failure to do so could result in employment tribunal claims by workers seeking to enforce their rights.

The Advisory, Conciliation and Arbitration Service (ACAS) has published guidance on tips and service charges in relation to the Act and supplementary Code of Practice which are both now in force. The guidance explains what the new law says, sharing tips fairly, and the obligation to have a written policy and to keep records. The guidance also covers which tips the law applies to, when tips must be paid, tronc systems and what happens if tips are not being paid correctly.

The DBT has also published non-statutory guidance for employers for employers on distributing tips fairly. The guidance is aimed at helping employers apply the statutory code of practice on fair and transparent distribution of tips, and applies to all sectors and businesses where tips are received. The guidance is not part of the statutory Code of Practice, legal advice or an exhaustive account of what is acceptable under either the Employment Rights Act 1996 or the statutory Code of Practice.

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Equality: Office for Equality and Opportunity replaces the Equality Hub

The Equality Hub has been replaced by the Office for Equality and Opportunity. The Office for Equality and Opportunity will cover the overall framework of equality legislation in the UK, including disability policy, ethnic disparities, gender equality and LGBT+ rights.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com