Readers of Forecourt Trader will be impacted by the changes the new government is introducing to our employment laws. Many are either direct employers in company managed or commission operator sites, where the operator is the employer. And of course, many readers will be employees. So, the changes will impact you all!
Labour promised it would introduce legislation to reform employment law within 100 days of entering government – it has now done so. The new Employment Rights Bill (“the Bill”) proposes to introduce 28 employment law reforms, as well as plans for other employment legislation to be implemented in the future.
We discuss the key reforms below.
Day 1: Unfair dismissal rights
The biggest change is the right to claim for unfair dismissal from Day 1, removing the two-year qualifying period that is currently in place. This will be subject to a ‘probationary period’, which is currently expected to be nine months, during which time an employer can dismiss an employee using a ‘lighter touch’ process (except for redundancy).
Whilst this delivers more rights to the individuals, it is expected that employers will adopt more robust pre-employment screening checks to ensure that the candidates are right for the role from Day 1. There is also likely to be more scrutiny on employees during their probationary period as employers will be careful to take advantage of the lighter-touch process.
Zero hours: ending one-sided flexibility
During its election campaign, Labour promised to end ‘exploitative’ zero hours contracts.
It proposes to do this by granting certain qualifying workers the right to be offered guaranteed hours if they work regular hours over a defined period, which is expected to be 12 weeks. There will be no obligation on the worker to accept any offer of guaranteed hours.
The Bill does not ban zero hours contracts altogether, but it gives workers significantly more control.
Ending fire and re-hire
The Bill proposes to end fire and rehire practices by amending the law to make a dismissal automatically unfair, if an employee is dismissed for failing to agree to a change in their contract of employment or replace them with another employee on varied terms to carry out the same role.
There will be a very limited exception where the employer can demonstrate that the reason for the variation was to significantly mitigate financial difficulties, and it could not reasonably be avoided. However, the threshold for this is expected to be high (think insolvency).
It is clear that the Bill will severely restrict an employer’s ability to change contractual terms, without obtaining employees’ agreement.
Sexual harassment
The Bill strengthens the new duty to take “reasonable steps” to prevent sexual harassment stretching it to a duty to take “all” reasonable steps.
Separately, the Bill would make employers liable for third-party harassment.
Employers will need to have in place robust preventative practices, since harassment claims will be very difficult to defend.
Flexible working
Currently employees have a Day 1 right to request flexible working, twice a year. Employers are under a duty to deal with a request in a reasonable manner and can only refuse it for one or more of eight business prescribed business reasons.
The Bill does not add a huge amount – employers will still be able to refuse the request if one of the eight business reasons applies, although it will now have to demonstrate it was reasonable for them to refuse the request on that ground.
Sick pay
Currently, for an employee to be eligible for statutory sick pay (SSP), they must earn more than £123 per week, and SSP is only payable from Day 4 of sickness absence.
The Bill scraps the three-day waiting period so that SSP is payable from Day 1. The Bill will also remove the earnings requirement, although SSP will be payable at the capped weekly rate (currently £116.75) or a prescribed percentage of an employee’s weekly earnings, whichever is lower.
This change is thought to mean up to 1.3 million low-paid employees will now be eligible for SSP.
The idea is to make sure people are not working when they are unwell, and the hope is that this will help to better long-term health outcomes and increased productivity for businesses.
Bereavement leave
There is currently no statutory right for employees to take bereavement leave following a death (except for parents who lose a child under 18). The Bill will introduce a new right to at least one week’s bereavement leave from Day 1.
Family rights
Currently, to be eligible for unpaid parental leave, an employee must have worked for at least a year. For paternity leave, this is at least 26 weeks. The Bill removes the existing service requirements for both, making these Day 1 rights.
This could remove barriers to new parents switching jobs, but it is not a radical move.
The Bill has not removed service requirements for maternity, adoption or shared parental leave, although it contains a power for the government to introduce stronger protections against dismissal for pregnant employees and family returns.
Additional reforms
The government has also committed to implementing additional reforms in the future. These include:
- · The right to switch off from work
- · Further rights to end pay discrimination and encouraging reporting of ethnicity and disability pay gaps for large employers
- · Reviewing the parental leave system
- · Reviewing carer’s leave
- · A move towards a single status of worker
Conclusion
The Bill clearly introduces a very ambitious set of reforms and represents the biggest change to employment law in decades. However, very little is expected to happen quickly as many of the reforms are going to be subject to extensive consultation and the detail may be changed before they are finally introduced. Further, it is anticipated that the majority of changes will not in fact take effect any earlier than 2026. For employers, this means that no immediate steps need to be taken, but they should keep a watching brief for further details as and when they are released.
- Authors: Winckworth Sherwood’s legal director Harriet Calver and associate Aleksandra Davidson, who work in the firm’s employment law team.
- This column is from legal practitioners Winckworth Sherwood LL. Neither of Winckworth Sherwood or Forecourt Trader shall be liable for any decision or action taken on the basis of it. Nothing in this column constitutes legal advice or gives rise to a solicitor/client relationship. Specialist legal advice should be taken in relation to specific circumstances.
