The UK government introduced some significant amendments to the Employment Rights Bill (the Bill) at the start of July, aiming to strengthen worker protections and clarify employer obligations. We highlight the key proposed changes and outline what employers need to know as the Bill nears its final stages in Parliament.
Guaranteed hours for zero-hours and agency workers
The government proposes to allow exceptions to the duty on employers to offer guaranteed working hours. Any exception will apply during a set period, and the Secretary of State must consider the benefit to workers and the impact on employers facing unusual situations. This change would apply to agency workers as well.
The Bill also seeks to extend guaranteed hours rights to agency workers. New amendments focus on ensuring the pay and other conditions in any offer of guaranteed hours meet specific fairness standards, to prevent a drop in agency workers’ conditions overall. The proposed amendments would introduce a complex framework around guaranteed hours for agency workers. If passed, hirers will need a clear understanding of pay arrangements for both agency and directly employed staff, as well as the ability to identify accurately who constitutes a comparable worker within their organisation.
Bereavement leave for early pregnancy loss
Since April 2020, parents who suffer a stillbirth after 24 weeks are entitled to up to two weeks of statutory parental bereavement leave. The Bill already seeks to extend this entitlement to cover other forms of bereavement.
The government now plans to introduce a new day-one right to at least one week of statutory bereavement leave for parents who experience pregnancy loss before 24 weeks. This would apply to pregnancy loss before 24 weeks that doesn’t result in a live birth including miscarriages, abortions and failed embryo implantation after IVF treatment. For now, this leave would be unpaid, although employers may choose to offer pay.
Banning some non-disclosure agreements (NDAs)
The government amendments also propose restricting the use of non-disclosure agreements related to harassment or discrimination. Under the new proposals, any part of an agreement that attempts to prevent a worker from alleging or disclosing certain acts of harassment or victimisation would be invalid. The provisions would also cover disclosures about the employer’s response to harassment and discrimination claims, not just the discrimination/harassment itself. Employers should be aware that their handling of complaints and internal investigations will therefore also be subject to these new requirements, which may limit the use of confidentiality provisions and require greater transparency in addressing such matters at work.
The proposals would still permit some “excepted agreements” if they meet specific conditions that the government would set out in regulations. Still, even an “excepted agreement” might be considered void if they try to stop a worker from raising a valid concern or making a disclosure.
Fire and rehire
One of the key proposals in the Bill is measures to prevent unfair dismissals linked to “fire and rehire” practices.
Under the Bill, it would be automatically unfair for an employer to dismiss a worker because they refused to accept key changes to their contract with an offer of re-engagement, except in certain permitted circumstances (such as where the employer can demonstrate genuine financial difficulties).
The latest amendments would mean that a dismissal would only be automatically unfair where the changes amount to “restricted variations”. These include things like reduced pay, shorter working hours, changes to shifts, cuts to holiday time, or adjustments to pensions. Employers won’t be allowed to add terms to new contracts that give them the right to make these changes without the employee’s consent. However, variation clauses agreed before the law comes into force will still be valid.
When the contract change is not a “restricted variation”, dismissals would not be automatically unfair, but employment tribunals would have to take account of various factors (such as the reason for the variation and any consultation carried out) to determine if the dismissal was an ordinary unfair dismissal.
In addition, new provisions would make it automatically unfair for an employer to dismiss an employee just to replace them with a contractor or agency worker, unless the employer can justify it due to serious financial difficulties. In situations meeting the latter requirement, a tribunal would still have to consider if the dismissal was fair overall.
Alternative provisions would apply to public sector employers. For these organisations, the test would require the organisation to be subject to a “relevant intervention direction” not just by standard business measures of financial difficulties. A dismissal would not be automatically unfair where the public sector employer subject to such measures could show the contract changes were necessary and couldn’t be avoided.
House of Lords Report stage
The House of Lords has now completed its Report stage. Over several sittings, the Lords passed several significant amendments to the Bill. These included:
- allowing a qualifying period of six months before employees become eligible to claim unfair dismissal, in contrast to the government’s plan to make this a day-one right;
- converting the duty on employers to offer guaranteed hours to zero-hours workers and agency workers to a right for employees to request a guaranteed hours contract; and
- retaining the 50% turnout threshold for industrial action ballots.
The government is likely to overturn these amendments, which will lead to the Bill going back and forth between the House of Lords and the Commons.
What’s next?
On 3 September, the Bill will have its third reading in the House of Lords before returning to the House of Commons for its final stages before becoming law. The amendments passed by the House of Lords may lead to these final stages taking longer than might otherwise have been the case. For more information on the government’s plans for implementation of the Bill, once it receives Royal Assent, you can read our blog here.
