Futureproof your business

What changes will the Employment Rights Bill bring and how will they affect your business?

What changes are we expecting?

There is plenty of expected changes to get your head around, in fact the Employment Rights Bill proposes 28 separate reforms. But we’re by your side to help. We’ve split them into six key areas of interest for SMEs, with an explanation of what it all means and when we can expect it.

One thing to note is that, although we now have draft legislation, we are still awaiting plenty of detail. Many of the proposed reforms will be going through ‘consultation’ periods, where the Government consults various bodies and businesses on the changes. Rest assured that The HR Dept will be providing a voice for SMEs during this stage.

We don’t expect any significant implementation of change until 2026 – so there is no need to panic. However, the best way to alleviate the most significant of impacts from this raft of changes is to start prepping now.

Contact your local expert to find out how.

Zero-hour contracts

Labour intend to stop employers offering ‘exploitative’ zero-hour contracts, with employers being obliged to offer a permanent, guaranteed hours contract that reflects the true amount of hours someone ones.

These hours would be based upon an as yet unspecified qualifying period (the government would like 12 weeks).

Employers will also be liable to pay employees for any shifts that have been cancelled or curtailed without ‘reasonable’ notice.

The devil will be in the detail with this change, once we have more information on the reference period, what reasonable notice means and whether there is any exemptions. However, if you use any casual/zero-hour workers then may need to review your contracts

Contact your local expert for help with this. 

Unfair Dismissal

One of the reforms like to have a big impact on SMEs is the removal of the two year qualifying period for unfair dismissal claims.

Currently, an employee must have worked for you for two continuous years before they can claim unfair dismissal. The government plans to remove this. Instead they have proposed a statutory probation period, in which employers can employ a slightly lighter touch for dismissing people.

The probation period will be going through consultation, to ascertain the length and the requirements that will be stipulated, but what is clear is that this is a change you need to act upon now.

You recruitment processes, your onboarding and your use of probations has just become so much more important.

Contact your local expert for help with this.

Sick pay

The rules around statutory sick pay (SSP) will be changed, meaning employees are eligible to claim it from day one of their absence.

Previously, SSP could only be claimed after the third day of illness. The government are also intending to remove the £123 earnings limit so that all workers are eligible to claim SSP.

This change could cause significant disruption to SMEs. Employees may be more inclined to take sick days, knowing they will receive pay. Your absence management procedures will need to be excellent to manage this, and it will require a strong people strategy to deal with it effectively.

SSP is of course non-reclaimable now as well, so please ensure you are accounting for this in your budgets.

Contact your local expert for help with this.

 

Parental and Bereavement Rights

The government has proposed enhance parental and bereavement leave rights for all employees. These fit in with their ‘family-friendly’ agenga.

They would like to Paternity (and other Parental) Leave rights to be available from day one of employment, rather than having to wait 26 weeks.

The would also like Bereavement Leave to be available to all, not just those with dependants. 

The biggest change could be enhanced protection for pregnant and returning mothers, from dismissal and redundancy. We await further information on what those protections are and how long they would apply for.

Contact your local expert for help with this.

Flexible working

Employees will be able to request flexible working from day one of employment, with employers expected to accommodate it where reasonable.  

Again, we await further information on what ‘reasonable’ means, however it may be on the grounds of burden of additional costs,
detrimental effect on the ability to meet customer demand, inability to re-organise work or recruit additional staff, impact on quality of performance, insufficient work during period the employee proposes and planned structural changes. Employers will be expected to explain their reasons in writing.

You may or may not already be offering flexible. You may or may not have reasonable grounds to refuse it if you do not currently offer it. Either way, your flexible working policies need to be up to scratch.

Contact your local expert for help with this.

Other changes to be aware of

There is plenty of other reforms listed in the Bill, however many of them will not concern the majority of SMEs too significantly.

Below are three changes which may have an impact, but for which we are currently awaiting more information.

The government want to update trade union laws, making it easier to form unions and recruit for them.

They plan to merge different enforcement bodies to form the Fair Work Agency.

They have pushed for the Low Pay Commission to take account of cost of living when setting the minimum wage, whilst also removing the age bands.

Contact your local expert for help with this.

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