The Labour Party’s pre-election promise to ‘Make Work Pay’ was formally put into action yesterday (10 October 2024) through the unveiling of the Employment Rights Bill, comment Druces LLP Partner, Phillip Vallon, and Trainee Solicitor, James Sharp. The bill, as promised, has been delivered within the first 100 days of the new government’s tenure and it is stated to seek to enable business growth while providing increased economic security for UK workers.
The Deputy Prime Minister Angela Rayner has said that the bill represents ‘the biggest upgrade to rights at work for a generation’; here, we set out the measures through which Labour proposes to facilitate this, as well as the potential timeframes.
Known Provisions and Expected Implementation Dates
The speed at which the changes will have effect will vary.
It is worth noting that it is essentially only rumoured that the bill will become law in the summer of 2025.
Below we’ve set out the bill’s known provisions and, if known, their effective dates:
As expected, there have been changes introduced which seek to encourage cooperation between unions, employers and government.
- The repeal of the provision which requires minimum service levels for striking is the only individual reform that will come into force on the day on which the Employment Rights Act 2025 (“the Act”) becomes law.
- The Strikes (Minimum Service Levels) Act 2023 had previously granted the government powers to set minimum service levels in key sectors during strikes.
- The bulk of the provisions relating to trade unions and industrial action (contained in part 4 of the bill) become law at the end of the period of two months beginning with the day on which the Act is passed.
The remaining provisions of the bill will become law when the appropriate Minister puts forward further legislation meaning that we cannot say when the below will become law with any certainty.
Unfair Dismissal Protections
Another notable provision is the removal of the qualifying period for unfair dismissal claims.
- This is a big move away from the current position in that, in the future, from the first day, workers will have the right to claim unfair dismissal against their employer, as long as they have started work.
- There is a significant caveat to this provision, which is that it is expected that a 6-to-9-month probationary period (depending on the outcome of upcoming consultations) during which the employer can dismiss without meeting the usual standards of fairness will also apply.
- Whether this measure proves to be one of the lasting legacies of the bill hinges on the subsequent implementation of this ‘statutory probation period’.
- Consultations on how long this period will be are likely to take place in the coming months and it is rumoured that we may see the provision become law in Autumn 2026. This change could reshape the landscape of employment rights, although the precise timeframe remains unclear, with autumn 2026 as a rumoured date for implementation.
Statutory Sick Pay (SSP) from Day One
The bill also proposes an alteration to statutory sick pay (SSP) eligibility.
- Employers will be required to pay SSP from the first day of an employee’s absence, removing the current requirement of a worker being sick for more than three days.
- Additionally, the minimum weekly earnings threshold for receiving SSP—currently set at £123 per week—will be scrapped.
- The plan is for the Secretary of State to set SSP as a percentage of pay.
These changes are expected to have a significant financial impact on employers, as they will need to cover sick pay from the outset of an employee’s illness.
Full Liability for Third-Party Sexual Harassment
This represents another potentially significant change to employee protection and employer’s liability.
- Under this provision, employers have full liability for the sexual harassment of their employees in their place of work by third parties. For the purposes of this provision, ‘third party’ means anyone who is not the employer or another employee (of the employer).
- This means that if an employee is sexually harassed at work, the employer is deemed to have permitted the sexual harassment unless they had taken all reasonable steps to prevent the third party from doing so.
- These ‘reasonable steps’ that companies will likely require substantial forethought and may come at a cost…
Additional Provisions
The Employment Rights Bill also addresses a range of other employment-related issues, including:
- Flexible working: though not a radical overhaul, the bill reinforces existing rights to flexible working, giving employees greater flexibility in their working arrangements.
- Zero-hour contracts: there are new protections for those on zero-hour contracts, aimed at increasing job security.
- Bereavement leave: the bill introduces amendments to the current law, giving a wider range employees (no longer just parental) the right to take time off following the death of a close relative.
What’s Missing? Provisions Set for Future Consultation
While the Employment Rights Bill introduces several important changes, some anticipated measures have been excluded from this round of legislation. However, they are likely to be the subject of future consultations, including:
- The right to switch off: this would prevent employers from contacting employees outside of working hours, except in exceptional circumstances.
- A single employment status: the government had proposed consolidating the current three-tier system of employees, self-employed individuals, and workers into a two-tier framework. This change is aimed at reducing ambiguity and lowering costs for both employers and employees.
The Takeaway for Employers and Employees
While some may argue that the Employment Rights Bill falls short of being a transformative piece of legislation, it is nonetheless an important step towards improving worker security and protections. Employers need to stay updated on the bill’s developments and prepare for its eventual implementation. The eventual changes introduced by this bill will increase protections, meaning businesses must ensure that they comply with the new legal requirements.
If you have any questions or concerns regarding the Employment Rights Bill or require assistance with Employment Law, please reach out to Phillip Vallon. You can contact him via email at p.vallon@druces.com or by completing the form below.
Phillip Vallon
Partner
Employment Law