The Employment Rights Bill and what it means for your business

The new Employment Rights Bill will usher in some of the most substantial changes to workers’ rights in decades - while the reforms won’t come into play before 2026, businesses will need to consider the changes carefully, taking stock of the new laws and the impact on their organisation. 

Chris Garner, Managing Director of HR and Employment Law specialist, Avensure, has outlined the key changes and the steps businesses should take to ensure they’re compliant.

Day one rights

The provision of ‘day one rights’ for employees is one of the most significant changes within the Bill, allowing staff to claim unfair dismissal from their first day of employment. 

While there is some wiggle room for businesses in retaining probation periods for new hires, it removes the flexibility employers could fall back on during the first two years. Businesses will need to be cautious when it comes to recruitment, reviewing their hiring process to ensure that candidates can fulfil their roles and responsibilities and are a good fit with their team and culture. It will also become more important to manage staff effectively within their probation terms - this of course means investing in training, ensuring that HR teams and managers are properly equipped. 

Businesses will also need to adapt their HR policies and procedures for ‘short serving’ employees, while reviewing formal processes like disciplinary proceedings and redundancy consultations. Short serving clauses will no longer apply and will need to be removed from contracts and employee handbooks will need to be assessed to make sure that companies are compliant with the new laws.

“Fire and rehire” practices will also be a thing of the past once the Bill comes into action, with the exception of very extreme circumstances. 

Zero hours contracts 

The government has made no secret of its prevailing view that zero hours contracts are exploitative, which is reflected in the new Employment Rights Bill. Once the new rules come into play, zero-hours staff have the right to move to a guaranteed hours contract if they work regular hours. 

The changes are likely to have a major impact on industries like care and hospitality which rely on zero hours contracts for sickness and absence cover at short notice, along with smaller companies who aren’t yet in a position to offer guaranteed hours each week.

Flexible working 

The new Employment Rights Bill will hand more flexibility to employees, preventing businesses from refusing flexible working requests without evidence that it was reasonable for them to turn it down. Businesses will need to consider carefully what flexible hours might mean for their business and day-to-day operations, as well as the impact on elements like company culture and collaboration. 

Sick pay and parental and bereavement leave

Statutory sick pay legislation will be updated as part of the Employment Rights Bill, which will be paid from the first day of absence instead of the fourth under the current rules. The same is true for Statutory Bereavement Leave, which will also come into play from the first day of absence. 

Parental leave will become a day-one right, upending current rules which require parents to be working with an organisation for one year before they’re eligible. This is likely to be a major concern for businesses when hiring new staff. 

There’s no doubt that the Employment Rights Bill will be a major cause for concern for businesses. However, with two years until any changes are expected to take effect, there is plenty of time to assess the effect on their business and the likely implications both in the short and long-term. The first step should be to spend time reviewing contracts, handbooks, policies and procedures and, where necessary, taking expert advice to ensure that their business is compliant with the new laws. There is a lot of information to navigate, but preparedness will be key in preventing costly errors.