Employment law changes: are you ready?

The Employment Rights Bill contains changes which, once implemented, will give workers substantial new rights and employers in the property sector new responsibilities. The Bill provides a framework for Labour’s plan to make work pay. Most of the detail will be set out in separate regulations and the government will consult on many of these changes in 2025 but most will not come into force until next year. Here are the headlines. Day one unfair dismissal rights Currently, employees must have worked for their employer for two or more years before they can bring a claim for ordinary unfair dismissal. The Bill will give employees the right to claim unfair dismissal from the first day of their employment. Employers must have a fair reason to dismiss an employee and go through a fair procedure. You will be able to go through a shorter and easier process if you dismiss a new recruit during their initial probationary period (likely to be nine months) unless you are making them redundant. Collective redundancy consultation Currently, employers proposing 20 or more redundancies “at one establishment” within a period of 90 days or less must collectively consult with a recognised union or employee representatives before making anyone redundant. If they do not, employees can claim a protective award of up to 90 days’ pay. The Bill removes the words “at one establishment”, which means that if you operate out of more than one site, you will need to count any proposed redundancies to work out if you need to embark on collective consultation. Fire and re-hire Employers can fire and re-hire staff as a means of changing their terms and conditions of employment as a last resort. The Bill will make it more difficult. Employees who are dismissed because they will not accept changes to their terms and conditions will be able to claim that their dismissal is automatically unfair. You will only be able to successfully defend these claims if you can show that it was the only way to prevent your business from going under. Sexual harassment Since 26 October 2024, employers have a duty to prevent their staff from being sexually harassed in the course of their employment. It is an anticipatory duty which requires you to consider where your staff are most at risk and to take “reasonable” steps to prevent it. If you breach this duty, you may have to pay additional compensation of up to 25% to staff. The Bill will strengthen that duty and require you to take “all reasonable steps” to prevent sexual harassment. Third-party harassment Currently, it is difficult for workers to bring successful claims against their employers for harassment they experience at work by customers or other third parties. The Equality Act 2010 used to provide specific protection, but those provisions were repealed in 2013. The Bill will reintroduce employers’ liability for third party harassment and you will only be able to successfully defend claims if you can show you have taken “all reasonable steps” to prevent it. Support for menopausal staff Currently, employers have no legal duty to explain to staff how they will support those who are going through the menopause. The Bill will require employers with 250 or more employees to publish annual “equality action plans” explaining what steps they are taking to address their gender pay gap and to support staff going through the menopause. Flexible working requests Currently, employees can ask their employers to change their working hours, location and the days they work by making a written request. They can make up to two requests a year and you can only turn these down if you can rely on one of eight specified business reasons. The Bill will not change the eight business grounds, but will require employers to explain why it was reasonable to turned down a request on these grounds. There may also be changes to steps you must follow when consulting an employee about a request. Protection from discrimination after returning from maternity and other family related leave In a redundancy situation, pregnant women, those on maternity leave, and those returning to work from maternity leave have the right to be offered a suitable alternative vacancy ahead of anyone else who has been provisionally selected for redundancy. Similar rules apply to new parents returning from adoption or shared parental leave. The Bill will protect women from being dismissed for other reasons for six months after they return to work from maternity leave, except in limited circumstances (not yet defined). This additional protection will also apply to other employees taking other types of family related leave, such as adoption leave, shared parental leave, and other forms of leave not yet in force, such as neonatal care leave and bereaved partner’s paternity leave. Day one right to bereavement leave Currently, employed parents who lose a child under the age of 18, or suffer a stillbirth after 24 weeks of pregnancy, have a day one right to take up to two weeks of parental bereavement leave. The Bill will extend protection and give employees a day one right to at least one week’s unpaid bereavement leave following the death of a close relative or other person (not yet defined). Day one right to parental leave Employees who have been employed for at least 26 weeks can take up to 18 weeks of unpaid parental leave for each child. The maximum amount of leave they can take each year is four weeks. The Bill will make this a day one right. Day one right to paternity leave Qualifying employees can take up to two weeks’ paid leave in the first year after the child’s birth, or placement for adoption. The Bill will make paternity leave a day one right. Right to statutory sick pay Currently, statutory sick pay is payable from day four of sickness, and workers need to earn above the lower earnings limit of £123 to qualify. The Bill provides that SSP will be paid from the first day of illness and the lower earnings period will be removed. Zero hours and insecure workers Currently, employers can engage staff on zero-hours contracts provided they don’t prevent them from working for someone else. The Bill introduces two key changes which will restrict their use and penalise employers who abuse them as follows: Right to be offered guaranteed hours The Bill will require employers to offer “qualifying workers” a guaranteed number of hours of work after the end of every reference period (expected to be 12 weeks) reflecting the average number of hours they have actually worked during that period. This has to be repeated until the worker no longer qualifies. Right to be given reasonable notice of shift changes The Bill will require employers to give their staff reasonable notice of available shifts and reasonable notice if they want to make changes to shifts they have agreed to work. Employers will also have to compensate staff if they change their shift at short notice. S1 statements Currently, employers must give all workers a written statement containing certain prescribed information on or before their first day of work. Even if the employer doesn’t recognise a union, the Bill will require employers to tell their staff that they have a right to join a trade union when they start work and at times throughout their employment. Other changes The property sector will also need to factor in significant increases to their employment costs. The National Living Wage is rising to £12.21 in April and increases to employer National Insurance costs come into effect at the same time. The government is also introducing neonatal leave and pay in 2025 which will give parents whose babies need care up to 12 weeks of paid leave. Make your voice heard The Employment Rights Bill will have a huge affect on property sector employers. The government will launch a range of consultations in 2025 and we suggest that you respond to those that are likely to cause problems for your business. The government places weight on the numbers of responses it receives to consultations and it is possible that it may modify some of its proposals if enough employers shout loudly enough. Joanne Moseley is a lead practice development lawyer in the employment team at Irwin Mitchell LLP