Employment Essentials: Employment law changes 2024

Policy

A ban on 'exploitative' zero-hour contracts ensuring workers have a right to a contract that reflects the number of hours they regularly work. The policy also includes giving workers "reasonable notice" of any shift changes and compensation for any cancelled or curtailed shifts.

The Bill's provisions

The Bill when passed will insert new sections 27BA to 27BT into the Employment Rights Act 1996, resulting in complex provisions.

1. Right for qualifying workers to be offered guaranteed hours

Employers will be required to offer a guaranteed hours contract (GHC) to 'zero-hour' or 'low-hours' workers after the end of every reference period. Essentially, the new right will apply to a 'zero' or 'low' hours worker who, during a relevant reference period, worked a number of hours that satisfy certain conditions in respect of number, regularity or otherwise.

This right will apply to those employed by the same employer under one or more worker's contracts (whether or not continuously) in the relevant period.

For qualifying workers, the employer will be obliged, subject to certain exceptions, to make an offer of guaranteed hours after the end of every relevant reference period that reflects the hours they worked during that reference period.

The new provisions will allow for a 'guaranteed hours offer' to be of a limited term but only where there is a reasonable 'limiting event', for example upon completion of a task for which the worker was employed or where the employee was employed to cover another worker's leave, and the worker on leave returns, or the employer reasonably considers there is only a temporary need.

Important detail being is left to implementing regulations includes:

• Who will qualify for this right - The definition of 'zero-hours' and 'low-hours' qualifying workers.
• The length of the reference period (likely to be a 12-week rolling reference period).
• Qualifying 'hours worked' (in terms of regularity and the number of hours worked or otherwise).
• The requirements of a 'guaranteed hours offer' - how, when and in what form must it be made.
• The requirements for accepting/rejecting 'guaranteed hours offer'.

2. Right to reasonable notice of a shift

What is 'reasonable' will depend on all the circumstances of a case. It is to be presumed, unless the contrary is shown, that notice of a shift will not be reasonable notice if it is given less than a specified amount of time (to be set out in subsequent implementing regulations) before the shift is due to start.

3. Right to reasonable notice of cancellation of or change to a shift

Employers must give workers reasonable notice if they cancel a shift or change the day or time.

It is to be presumed, unless the contrary is shown, that notice will not be reasonable notice if it is given less than a specified amount of time (to be set out in subsequent implementing regulations) before the shift would have started or on or after the start of the shift.

4. Right to payment for cancelled, moved and curtailed shifts

Employers will be under a duty to make a payment, of an amount to be specified in subsequent implementing regulations to a worker each time there is a cancellation, movement (i.e., a delay or bringing forward of a shift), or curtailment at short notice of a qualifying shift that the worker has agreed to work for the employer.

Important detail being left to implementing regulations includes:

• What will amount to 'short notice'?
• What amounts to a 'moved' shift?
• The 'payment' amount. This will be subject to a cap of what the worker would have earned had they worked the hours and may be subject to a sliding scale depending on how short the 'short notice' was.

5. None of the above applies in relation to agency workers, though the Bill does give Secretary of State power to make regulations giving agency workers corresponding rights in relation to rights to guaranteed hours, notice of shifts and payment for short notice changes to shifts.

6. The Act repeals of the Workers (Predictable Terms and Conditions) Act 2023

Tabled amendments

On 26 November the Government tabled a number of amendments which include:

1. Where an employer is not required to offer a GHC, impose a requirement on the employer to give notice stating exception relied upon.
2. Create a rebuttable presumption that a zero hour or low hours contract is not a limited term contract (in other words it will be for the employer to prove a reasonable 'limiting event').
3. Impose a duty on employers to ensure workers who have the potential to qualify for a GHC are aware of and have access to certain information relating to their rights.
4. Provide that curtailment of shifts can include hours being cut from the middle of a shift (in addition to the start and finish).
5. Clarify that the maximum amount of compensation for cancelled, moved and curtailed shifts is the amount that would have been earned save for the cancellation or curtailment and if moved what they would have earned for the original shift and require such payments to be treated as 'wages'.
6. Make the time limit for bringing a claim in relation to these new rights six months.

Comment

The above provisions are intended to end one-sided flexibility, ensuring that jobs provide a baseline of financial security and contractual predictability so workers can better plan their lives and finances. We await the consultation on important elements such as what constitutes 'low hours' contracts and what will be the requirements of a 'guaranteed hours offer', the Government has stated it will also ensure that

• workers on full-time contracts who occasionally pick up overtime hours are not affected; and
• where work is genuinely temporary, there will be no expectation on employers to offer permanent contracts.

What the reference period will be, is also an important issue for consultation. While the Bill is silent on the definition of the 'reference period', in the "Next Steps to Make Work Pay" the Government favours a 12-week rolling reference period. But such a reference period may make it difficult to account to for seasonal variations in workloads? This will be an important consultation.

Zero-hours contracts are not being banned altogether. It should be noted that while employers will be required to make a 'guaranteed hours offer', it can be for a limited term where reasonable. Having said that, the employer will need to rebut the presumption that it is not for a limited term (a significant tweak under the tabled Government amendment). In addition, the worker is not obliged to accept the offer, thereby retaining full flexibility on the worker's part. The Government states that it appreciates that zero-hours contracts can work well for some individuals, such as students and those with caring responsibilities, so those who are offered guaranteed hours will be able to remain on zero-hours contracts should they wish.

Next steps - Consultation

It is important to note that agency workers are not included under the provisions although the Secretary of State is being given the power to make regulations in future to extend such protections to agency workers.

On 21 October 2024, the Government opened the 'Consultation on the application of zero hours contracts measures to agency workers' which runs until 2 December 2024.

This consultation is not about whether the measures aimed at zero hours and low hours workers should be extended to agency workers. Instead, it seeks views on how to apply the new measures to agency workers.

The Government seeks views on:

1. Guaranteed hours - Whether the responsibility for offering workers guaranteed hours should fall to:
Option 1: the employment agency – but recognise difficulty in demand forecasting; or

Option 2: the end hirer – but risks then becoming the de facto employer altering the nature of the relationship. Also, a trigger for 'temp-to-perm' transferring fees (a common contractual fee imposed on a hirer if they directly employ a worker that the agency had initially provided).

This will be a particularly tricky issue.

2. Reasonable notice of shifts - The Government proposes that both the end hirer and the agency should be responsible for providing reasonable notice of shifts to the extent that they are responsible for the unreasonable notice.
3. Payment for shifts cancelled or curtailed at short notice - The Government proposes that agencies should be responsible for the cancellation payments to agency workers and seeks views on whether recoupment of costs from end hirers (to the extend the end hirer is responsible) should be subject to legislative provisions or left to contractual arrangements between the agency and the end user.

Next steps

Consultation on outstanding detail awaited. The one thing that is sure, is that the legislative provisions as currently drafted are extremely complex and the Government amendments made on 21 November 2024 only add to that complexity. As how workable these provisions will be, we await the outcome of the consultation and subsequent detailed implementing regulations.

Policy

Making flexible working the default.

The Bill's provisions

1. Added to the existing requirement that an employer may only reject a flexible working request based on one or more of the eight statutory reasons will be an additional requirement that "it is reasonable to refuse that application on that ground or those grounds ".
2. A new requirement that where a flexible working request is refused, the notification of the decision must state the ground or grounds for refusing the request and explain to the employee why the employer considers that decision is reasonable.
3. The Secretary of State is also given powers to introduce additional steps employers will need to take for compliance with the requirement to consult before rejecting an application.

Comment

The Bill aims to ensure that more requests are agreed. The absence of a reasonableness element for an employer considering that one of the statutory reasons applies has been seen as a loophole for some time. The need to include an explanation for a refusal takes us back to the 2014 position. Both of these changes are in accordance with current ACAS recommend best practice.

In the run up to the Bill being published, press reports warned of workers "being able to demand" compressed hours so that they can work a five-day week in four days. Requesting a compressed hours working arrangement is and has been a possibility since the right to request flexible working was first introduced over 20 years ago. The Bill does not contain provisions requiring employers to agree to compressed hours working arrangements where such a working pattern is not reasonable. Nor is there a proposal for a right to a four-day working week. What is proposed is a shift in the dynamic for flexible working requests generally so that employers consider flexible working (which can be in a variety of forms) with rejections taken on a reasonable basis. So, more of a mindset shift.

As for a possible future introduction of additional steps, this may see the statutory minimum process requirements introduced on 6 April 2024 (that an employer must consult with an employee, as a means of exploring the available options, before refusing a flexible working request) expanded. Currently there is no legislative de minimis requirement of what that 'consultation' needs to include.

Next steps

As stated in the 'Next Steps to Make Work Pay'', the Government will develop the detail of the approach in consultation.

Policy

Strengthening statutory sick pay (SSP) by removing the lower earnings limit to make it available to all workers, as well as by removing the waiting period.

The Bill's provisions

1. Removal of the first three days waiting qualifying period for entitlement
2. Removal of the lower earnings limit (LEL) requirement
3. The weekly rate of SSP to be the lower of:
   1. £116.75 (the existing SSP statutory rate revised annual in April); and
   2. A prescribed percentage of the employee’s weekly earnings.

Comment

The removal of the waiting period (the first three days of sickness) was previously done as a temporary measure during the COVID-19 pandemic to simplify the SSP system and get help to those in need more quickly.

While the policy statement referred to "all workers", this does not represent a change. SSP will continue to apply in relation to "employees" which for SSP purposes includes all those whose earnings are subject to Class 1 National Insurance contributions – so already includes many "workers".

However, the removal of the lower earnings limit (LEL) (currently £123 per week) will help low-paid casual workers. While that will be the case, a concession has been added that the rate of statutory sick pay, currently £116.75 per week, will be set at a lower rate for low paid employees instead to be based on a percentage of their weekly pay. This concession is being included in light of business fears of those on low pay otherwise having an incentive to take sick leave.

Next steps - Consultation

On 21 October, the Government opened the 'Consultation on Strengthening Statutory Sick Pay' on what the percentage rate for low paid employees should be. The Consultation runs until 4 December 2024.

The proposal is to remove the LEL requirement and replace it with a system under which employees are paid a certain percentage of earnings up to the flat statutory weekly rate. This consultation seeks views on what this percentage should be and outlines illustrative examples ranging from 60% to 80% of earnings. Depending on the percentage rate set, some employees who currently earn just above the LEL may see a reduction in their weekly SSP entitlement as they would no longer qualify for the flat rate.

Next steps

Following the consultation on the lower percentage rate, this change will be brought forward through a Government amendment to the Bill during its passage.

Policy

Strengthening the law to ensure hospitality workers receive their tips in full and workers decide how tips are allocated.

The Bill's provisions

1. Introduces a requirement for employers to consult with the representatives of recognised trade unions or worker representatives, or, where there are no such representatives in place, workers likely to be affected by the policy. Such consultation is to be carried out before the employers produce the first version of their written tipping policy.
2. Introduces a requirement for employers to review their written policy from time-to-time in consultation as above. The first review must take place at least once within three years from the date the initial version of the policy is issued, even if that date is before this provision comes into effect. Following that, reviews must take place thereafter at least once every three years.
3. Introduces a requirement for employers to also make available to all workers a written summary (in anonymised form) of the views expressed in the consultation

Comment

The Employment (Allocation of Tips) Act 2023 together with the statutory Code of Practice on Fair and Transparent Distribution of Tips came into force on 1 October 2024 (see below). The 2023 Act regulates how employers allocate tips among workers by introducing obligations to ensure that workers receive "tips, gratuities and service charges" in full, and that those tips are allocated in a fair and transparent way. In addition, workers will receive a new right to request more information about an employer's tipping record with employers being required to have a written policy on how tips are allocated.

However, unlike the headline policy stated in the 'Plan to Make Work Pay' the changes that came in on 1 October 2024 do not go so far as to provide that "workers decide how tips are allocated". The provisions contained in the Bill are aimed at increasing the voice of the workforce in determining the allocation of tips policy. As many employers have recently drafted their tipping policy in compliance with the 1 October 2024 changes, scheduling a review to take place before October 2027 will be needed.

Next steps

These provisions are not expected to come into force "earlier than 2026", But note, that when they are brought into force the tipping policy review provisions will apply to tipping policies which predate the Bill's implementation.

Policy

Introduction of "day-one" employment rights, including entitlement to paternity leave, and unpaid parental leave.

The Bill's provisions

1. Removal of the one-year qualifying service requirement for (unpaid) parental leave.
2. Removal of the 26 weeks qualifying service requirement for paternity leave.
3. Removal of the restriction on employees taking paternity leave and pay following shared parental leave and pay.

Proposed amendments

On 27 November, three Liberal Democrat MPs proposed amendments:

• To increase the paternity leave period from two to six weeks.
• To require employers with more than 250 employees to publish information about parental leave policies.

We wait to see if the Government accepts these amendment, though it is unlikely given the announced longer-term reforms set out in 'Next Steps to Make Work Pay' document which includes a review of the current parental leave system.

Comment

This change makes paternity leave and parental leave a day one right bringing them in line with maternity and adoption leave. Allowing paid paternity leave to be taken after a period of shared parental leave, is simply correcting what appeared to be an inadvertent error following the April 2024 changes to paternity leave (extending the period in which paternity could be taken from within 56 days to within 52 weeks of birth).

Next steps

These provisions are not expected to come into force "earlier than 2026". As a family-related leave change, April 2026 is a best guess.

Policy

Nothing set out in 'Make Work Pay' documents.

Bill's provisions

As introduced in Parliament on 10 October - nothing.

Proposed amendments

On 27 November, three Liberal Democrat MPs proposed an amendment to introduce a right to take up to 52 weeks of Kinship care leave. Kinship care (sometimes known as "family and friends care") arises where a child is being raised in the care of a family member, or family friend, who is not their parent. The arrangement may be temporary or permanent and can include a shared care arrangement.

It is highly unlikely that this amendment will be adopted by the Government. On 29 October 2024, in answering questions on kinship carers, the Parliamentary Under-Secretary of State for Business and Trade, referred to the Government's commitment, in its Plan to Make Work Pay, to review the system of parental leave at a later time.

Policy

Establishing bereavement leave.

The Bill's provisions

1. Extending "parental bereavement leave" to become “bereavement leave”.
2. The Secretary of State is given powers to make regulations giving employees who are bereaved the right to take protected time off work, in addition to the already existing provision for parental bereavement leave. A “bereaved person” will be defined in regulations by reference to the employee’s relationship with the person who has died.

Comment

We await detail to be provided in the implementing regulations (though some minimum requirements are set out in the Bill) regarding:

• Eligibility – what relationship will the bereaved person need to have had with the deceased.
• Duration – the Bill sets a minimum of seven days.
• When the leave can be taken – the Bill sets a minimum of up to 56 days after the death.
• Multiple deaths – the Bill requires the entitlement to be in respect of each deceased person.

Next steps

Consultation on the content of the implementing regulations.

Policy

Increasing protection from sexual harassment.

The Bill's provisions

1. Amend the "duty to take reasonable steps to prevent sexual harassment" coming into force on 26 October 2024 (see below) to a "duty to take all reasonable steps to prevent sexual harassment".
2. Re-introduce employer liability for third-party harassment of workers in the course of their employment. To cover all forms of harassment not only sexual harassment, subject to an "all reasonable steps" defence.
3. The Secretary of State is given powers to make regulations to specify steps which an employer must take and matters to which they must have regard for the purposes of meeting the obligations set out in the Equality Act 2010 to take all reasonable steps to prevent sexual harassment.

Comment

On 26 October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force. The Act introduces a new positive legal obligation on employers to take "reasonable steps" to protect their workers from sexual harassment. During a difficult passage through Parliament, the originally proposed provisions of the 2023 Act were very significantly diluted:

• The original provisions provided for re-introducing employer liability for third-party harassment of workers in the course of their employment, which was remove: and
• The potential 25% compensation uplift in sexual harassment cases, test was diluted from requiring employers to have taken "all reasonable steps" to simple "reasonable steps" (a lower bar).

These dilutions came when the 2023 Act was before the House of Lords as peers expressed concerns that those provisions would "jeopardise free speech" and "increase the regulatory burden on employers". 

Next steps

We wait to see whether these provisions in the Bill fare better before the House of Lords in this Parliament than they did last year in the previous Parliament.

Policy

Strengthen whistleblowing protections (including those related to sexual harassment).

The Bill's provisions

1. Explicitly include "sexual harassment that has occurred, is occurring or is likely to occur" as a 'relevant failure' in relation to disclosures qualifying for protection.

Comment

Under the existing whistleblowing legislative provisions, for there to be a 'qualifying disclosure of information' which is protected, the information disclosed must reasonably tend to show one or more of five 'relevant failures' has occurred, is occurring, or is likely to occur:

1. A criminal offence
2. Breach of any legal obligation
3. Miscarriage of justice
4. Danger to the health and safety of any individual
5. Damage to the environment
6. The deliberate concealing of information about any of the above

Due to concerns that not all complaints of sexual harassment fall within a or b above, sexual harassment will be explicitly added after health and safety which will also make deliberate concealment of information regarding sexual harassment a relevant failure.

Claims for sexual harassment are likely to fall within the ambit of the additional 'public interest' test due to the nature of the wrongdoing disclosed.

We await the content of the implementing regulations with implementation sometime in 2026.

Next steps

We wait to see if the tabled amendment is accepted and thereafter the content of the implementing regulations with implementation sometime in 2026.

Policy

Nothing set out in 'Make Work Pay' documents.

Bill's provisions

As introduced in Parliament on 10 October - nothing.

Proposed amendment

On 1 November 2024, an amendment to the Bill was proposed by a Liberal Democrat MP to add a provision which would render void any non-disclosure agreement insofar as it prevents the worker from making a disclosure about harassment (including sexual harassment).

This tabled amendment goes significantly further than the proposal to add sexual harassment to the list of qualifying disclosures for whistleblowing protection (see above) in two important ways:

1. It covers any form of harassment (not limited to sexual harassment).
2. Any NDA clause relating to harassment/sexual harassment would be void in law without the need to establish protection under the whistleblowing provisions at all.

Related pending legislation

Separately, back on 24 May 2024, the Victims and Prisoners Act 2024 (VPA) received Royal Assent as part of the "wash-up" before Parliament was dissolved in advance of the 4 July General Election but largely not yet implemented.

When in force, section 17 will make void any provision in an agreement that purports to preclude a disclosure of information by a victim (or a person who reasonably believes they are a victim) of a crime to:

• Any person with law enforcement functions, for the purpose of those functions being exercised in relation to relevant conduct.
• A qualified lawyer, for the purpose of seeking legal advice about relevant conduct.
• Any individual who is entitled to practise a regulated profession, for the purpose of obtaining professional support from that service in relation to relevant conduct.
• A regulator of a regulated profession for the purpose of cooperating with the regulator in relation to relevant conduct.
• A person who is authorised to receive information on behalf of any of the above persons for the purposes mentioned above.
• A child, parent or partner of the person making the disclosure, for the purposes of obtaining support in relation to the relevant conduct.

"Victim" includes a person who is "subjected to criminal conduct", or "where the person has seen, heard, or otherwise directly experienced the effects of, criminal conduct at the time the conduct occurred".

Comment

As regards the proposed amendment to the Employment Rights Bill, we wait to see if the Government intends to back this amendment. Whether it will make its way into the final draft of the Bill is by no means certain and may well be left for future consideration.

As regards the VPA so far, the Government has not indicated when and, indeed, if it intends to implement section 17.

Policy

Introduction of "day-one" employment rights, namely protection from unfair dismissal subject to probationary periods to assess new hires.

The Bill's provisions

1. Removal of the two-year qualifying service requirement for entitlement to unfair dismissal rights with the repeal of section 108 of the Employment Rights Act 1996 (ERA), which sets out the current qualifying period.
2. A new provision specifying that an employee cannot claim unfair dismissal unless they have started work subject to exceptions for the existing ‘automatically’ unfair reasons for dismissal.
3. Removal of the two-year qualifying period for the employee’s right to make a request for written reasons for dismissal. To be replaced by a requirement that the dismissal must have occurred after 'the end of the employee’s initial period of employment'.
4. Minor amendments to unfair dismissal rights for 'employee shareholders' to include protection where the reason for dismissal relates to the employee’s political opinions or affiliations.
5. The Secretary of State is given powers to make regulations to modify the operation of the test for unfair dismissal where termination falls:
   1. within the 'initial period of employment'; or
   2. within the three months immediately after the end of that period, if the employer has given notice of termination before the end of that period

and the reason for the dismissal must relate to one of four statutory reasons:

1. Capability/qualifications: A reason related to the capability or qualifications of the employee.
2. Conduct: A reason related to the conduct of the employee.
3. Statutory ban: That the employee could not continue to work in the position because their continued employment would contravene a statutory duty or restriction.
4. Some other substantial reason ('SOSR'): Relating to the employee.

Tabled amendments

On 12 November, a Liberal Democrat MP proposed an amendment to require that the 'initial period of employment' to be set out in implementing regulations is a period “of not less than 3 months and not more than 9 months from the day on which the employee starts work.”

On 26 November the Government tabled an amendment which will enable regulations to be made which specify a lower compensatory award where a tribunal finds an employee was unfairly dismissed during the initial period of employment.

Comment

Although there had been previous references to ‘workers’ gaining this ‘day-one right’, it is still currently limited to ‘employees’.

While simply reducing the current two-year qualifying service itself would have been a simpler and quicker option (the Government already has the legislative power to do that via secondary legislation), this is not what the Government is proposing. Unfair dismissal will become a day-one right for employees but there will be provisions specifically dealing with dismissals within an 'initial period of employment'.

Technically, by removing the qualifying period altogether, employees who have been recruited and have a contract of employment but who have not yet started work could also qualify. The Bill contains provision to prevent this by a specific exception. However, this exception will not apply where the employee can show they were dismissed for one of the existing 'automatically' unfair reasons where the existing two-year service requirement is already disapplied, for example dismissal in connection with pregnancy, whistleblowing, acting as an employee representative, asserting a statutory right etc. Or for dismissals in relation to spent convictions, relating to an employee’s political opinions or affiliation, and membership of a reserve force. Note that a dismissal in connection with a transfer of an undertaking (a TUPE transfer) will be included within the exception (while currently an automatically unfair reason the two-year service requirement does currently still apply).

As regards the 'initial period of employment', what that 'initial period' will be is to be subject to further consultation, although the Government has stated in the 'Next Steps to Make Work Pay' that its preference is nine months. On 12 November an amendment was tabled to there is no reference in the Bill to the 'initial period of employment' necessarily being a contractual probationary period. Accordingly (assuming the Government's a nine-period is used), the same rules will apply to an employee who has no contractual probationary period or a three/six-month contractual probationary period and an employee who has a contractual nine- month probationary period.

What the 'modified test' will require and how that will compare with our understanding of the usual processes employers follow to conduct a fair dismissal is yet to be fleshed out. In the 'Next Steps to Make Work Pay', the Government suggests as a starting point that it should consist of holding a meeting with the employee to explain the concerns about their performance (at which the employee could choose to be accompanied by a trade union representative or a colleague). Furthermore, the Government will consult 'extensively', including on how it interacts with Acas’s Code of Practice on disciplinary and grievance procedures.

It will still be possible for an employee in the 'initial period of employment' to successfully claim unfair dismissal, but the test to show their dismissal was unfair will be a harder one to pass. But note:

• The employer will still have to show that the reason for dismissal is related to one of four statutory reasons: capability/qualifications, conduct, statutory ban or 'SOSR related to the employee’. It is just the test for whether the employer acted reasonably in treating that reason as sufficient for dismissing the employee which is being modified.
• The existing fifth statutory fair reason for dismissal (which will continue to apply to the period after the 'initial period of employment') of redundancy is not included in this list. This means that employees who are made redundant on day one can claim unfair dismissal in the same way as any employees outside of the 'initial period of employment' with the existing unmodified test of fairness applying.
• The reference to 'SOSR' is also slightly different. In a normal unfair dismissal claim, the employer has to show that the reason for dismissal is “SOSR of a kind such as to justify the dismissal of an employee holding the position which the employee held”. But for a dismissal during an 'initial period of employment' the SOSR must be "related to the employee of a kind to justify dismissal" suggesting a dismissal connected with a business reorganisation would not be covered. We wait to see if this remains the case after consultation
• As for compensation, the Government states that it will also consult on what a compensation regime for successful claims during the 'initial period of employment' will be, with consideration given to tribunals not being able to award the full compensatory damages currently available.

Next steps

The mechanism proposed for the removal of unfair dismissal qualifying service period will now be subject to "full consultation". Given the concerns already expressed by employers over this change, the Government has committed in the 'Next Steps to Make Work Pay' not to introduce changes to unfair dismissal before the autumn of 2026. Assuming a 1 October 2026 implementation date with no additional transition provisions, essentially this amounts to an informal transition period with the effective qualifying period reducing over time. Employees recruited today will qualify for unfair dismissal in just under two years. Employees recruited this time next year will qualify after just under one year’s service and so on.

Policy

Strengthening rights for pregnant workers.

The Bill's provisions

1. The Secretary of State is given powers to make provision in regulations about redundancy during or after a protected period of pregnancy.
2. The Secretary of State is given new powers to make provision in regulations about dismissal for reasons other than redundancy, during or after a protected period of pregnancy.

Comment

We await details of how this will differ from the rights which came into force on 6 April 2024 under the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 and the corresponding Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 which extend the existing redundancy protections (priority for suitable alternative employment) while on maternity, adoption or shared parental leave to additionally cover the pregnancy period until 18 months beginning with the first day of the expected week of childbirth or placement date for adoption (essentially an additional six-month period). We also await details of the types of dismissal other than those by reason of redundancy that will be protected.

Next steps

Consultation on the content of the implementing regulations is expected soon.

Policy

Abolishing the scourge of fire and rehire.

The Bill's provisions

1. Adding to the list of 'automatically' unfair reasons for dismissal, a dismissal (a s401I dismissal)
   1. for not agreeing to a variation to their contract; or
   2. if the employer dismisses the employee to replace, or to re-engage them on varied contractual terms,

   unless the employer can demonstrate they fall within an exemption.

2. A dismissal will not be 'automatically' unfair where an employer can show:
   1. The reason for the variation was to eliminate, prevent, significantly reduce or significantly mitigate the effects of financial difficulties which, at the time of the dismissal, were affecting the employer’s ability to carry on the business as a going concern.
   2. Where an employer does not operate on a going concern basis, for example certain public sector bodies, the employer would have demonstrated the reason for the variation was to eliminate, prevent, significantly reduce or significantly mitigate the effects of financial difficulties which, at the time of the dismissal, were affecting the employer's ability to carry on activities constituting the business; and
   3. in all the circumstances the employer could not reasonably have avoided the need to make the variation.
3. Where an employer can show a s401I dismissal is not automatically unfair, when determining whether a dismissal was fair or unfair consideration must be given to:
   1. whether any consultation was carried out by the employer with the employee, an independent trade union or another employee representative about the variation of the employee’s contract of employment, and
   2. whether the employer offered the employee anything in return for agreeing to a variation.

The Secretary of State is also given a power to specify other factors that must be taken into account.

Comment

A Code of Practice on dismissal and re-engagement devised under the previous Conservative Government did in fact come into force post the general election on 18 July 2024. The existing Code requires employers to consult employees and explore alternative options, without raising the prospect of dismissal unreasonably early or using the threat of dismissal as a negotiating tactic to put undue pressure on employees in circumstances where the employer is not envisaging dismissal – so called 'fire & rehire' or 'fire & replace tactics'.

The Bill's provisions will significantly strengthen employee protection from unfair dismissal in these circumstances while still permitting the use of dismissal and reinstatement for employers facing financial difficulties in circumstances where the employer could not reasonably have avoided the need to make the variation. In such circumstances, the Bill includes a number of matters that must be considered when determining whether the dismissal is fair, including the degree of consultation (compliance with the Code of Practice) and whether the employer offered the employee anything in return for agreeing to the variation.

Related Secondary Legislation

On 17 October 2024 the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 was made on 2 December 2024, meaning that from 20 January 2025 where a party brings a successful claim for a protective award (for failure to collectively consult on redundancies), an employment tribunal can adjust any protective award made by up to 25% if it finds that employer failed to comply with a relevant Code of Practice, for example the Code of Practice on dismissal and re-engagement.

Next steps - Consultation

On 21 October 2024 the Government opened the 'Consultation on Strengthening remedies against abuse of rules on collective redundancy and fire and rehire' which runs until 2 December 2024.

As part of this Consultation, the Government is considering expanding the list of unfair dismissal claims for which interim relief can be sought to include claims under the new s401I (variation of contract refusal). Interim relief is currently limited to unfair dismissal cases regarding union/employee rep activities/membership and whistleblowing. Interim relief enables a tribunal to make an order for the continuation of an individual's employment pending final determination of the case making this a potentially powerful tool for a claimant.

Next steps

We await the outcome of the Consultation and the content of the implementing regulations with implementation sometime in autumn 2026.

Policy

Strengthen provisions on collective redundancy.

The Bill's provisions

1. Removal of the reference to 'at one establishment' so that the requirements to collectively consult, and to notify the Secretary of State, apply where the employer is proposing to make 20 or more employees redundant.
2. Specific amendments to the notification obligations in certain cases involving redundancies of ships’ crews.

Comment

This significantly extends the scope for when collective consultation will be required as the trigger of 20 or more employees will no longer be limited to the number of redundancies proposed at one workplace or unit as was extensively litigated in the 'Woolworths litigation'. Small number of redundancies at different sites taken together will trigger collective consultation requirements.

Next steps - Consultation

While not referred in the Bill, in the 'Next Steps to Make Work Pay', the Government states it is "committed to consult on lifting the cap of the protective award if an employer is found to not have properly followed the collective redundancy process as well as what role interim relief could play in protecting workers in these situations".

On 21 October 2024 the Government opened the 'Consultation on Strengthening remedies against abuse of rules on collective redundancy and fire and rehire' which runs until 2 December 2024.

The Government is proposing to increase the maximum period of the protective award that an employment tribunal can award where an employer has failed to comply with its collective redundancy consultation obligations. The two options that are being considered are:

1. to increase the protective award from 90 to 180 days’ pay per affected employee; or
2. to remove the cap on the protective award entirely leaving it to the discretion of the tribunal to decide the employer’s penalty.

While the proposal is to increase or remove the cap on the maximum protected period for calculating a protective award, it will remain the case that where a company is insolvent the 8-week cap for payment by the Insolvency Service will remain unchanged (the balance instead being an unsecured debt in the insolvency).

The Government is also seeking views on whether interim relief should be available to employees who bring claims for the protective award. The consultation does not set out how claims for protective awards for failure to collectively consult could work within the current legislative framework which only applies in relation to particular unfair dismissal claims (see 'Dismissal and re-engagement' above). Furthermore, a protective award claim can only be brought by the appropriate representatives of the affected employees (save for a very limited exception).

Next steps

More consultation to come. The Government states it also plans to consult on doubling the minimum consultation period when an employer is proposing to dismiss 100 or more employees from 45 to 90 days. We await the outcome of one consultation and await the start of another.

Policy

Improved protection of workers in public sector outsourcing.

The Bill's provisions

1. Amendments to the Procurement Act 2023, to allow the Secretary of State to make regulations specifying that certain contractual provisions be included within relevant public sector outsourcing contracts to avoid the emergence of a two-tier workforce consisting of ex-public sector employees and private sector employees.
2. Places a duty on the Secretary of State to publish a Code of Practice containing guidance to contracting authorities in relation to relevant outsourcing contracts.

Tabled amendments

On 26 November the Government tabled amendments to ensure the powers and duties under this provision extend to the devolved Scottish and Welsh authorities. Also, clarifies that implementing regulations are not required for before the Code of Practice may be published.

Comment

The intention of this provision is to ensure parity of treatment between individuals transferring from the public sector and those employed by the supplier. The Government has separately indicated that measures ensuring that outsourcing of services can no longer be used by employers to avoid paying equal pay will be delivered through the Equality (Race and Disability) Bill.

Next steps

We await the content of the implementing regulations and code of practice.

Policy

Strengthening working women’s protections from maternity and menopause discrimination and introduce gender pay gap action plans.

The Bill's provisions

1. Equality plans

1. The Secretary of State is given power to make regulations which require employers with 250 or more employees and some public sector employers to:
   1. develop and publish an equality action plan showing the steps that they are taking in relation to their employees with regard to matters related to gender equality; and
   2. publish prescribed information relating to the plan.
2. Regulations may not require an employer to publish information more frequently than every 12 months.
3. A matter is related to gender equality if it is related to "advancing equality of opportunity between male and female employees" and include:
   1. addressing the gender pay gap; and
   2. supporting employees going through the menopause.

Tabled amendment

On 27 November, a Labour MP proposed an amendment that "supporting employees with menstrual problems and menstrual disorders" be added to the list of matters related to gender equality. We wait to see if the Government intends to back this amendment.

2. Outsourced workers

1. The Secretary of State is given power to make regulations requiring require private and voluntary sector employers with at least 250 employees in Great Britain to publish information about the service providers that they contract with for outsourced services.

Comment

Employers who are already required to publish gender pay gap reports will also be required to develop and publish an 'equality action plan' showing the steps that they are taking with regard to gender equality, including addressing the gender pay gap and supporting employees going through the menopause.

The implementing regulations may also set out certain requirements in respect of the plan, such as its contents, frequency of publication and any requirements for board approval. We also await the details in respect of gender pay gap information where an employer is a principal in relation to an individual who is a contract worker.

Next steps

We await the content of the implementing regulations with implementation sometime in 2026.

Policy

Reinstating the School Support Staff Negotiating Body, to establish national terms and conditions, career progression routes, and fair pay rates.

The Bill's provisions

• Establishing and setting out the remit for a new School Support Staff Negotiating Body.
• Outlines matters within the SSSNB’s remit to include remuneration, terms and conditions, training, and career progression for school support staff.

Comment

School support staff covers those employed by local education authorities (LEAs) in England and governing bodies maintained by LEAs in England under a contract of employment providing for the person to work wholly at one or more schools maintained by an LEA in England, and those employed by academies.

Next steps

We await the content of the implementing regulations with implementation sometime in 2026.

Policy

A new fair pay agreement in the adult social care sector will help to establish national terms and conditions and fair pay rates.

The Bill's provisions

• Introduction of sectoral agreements in the adult social care sector.
• The Secretary of State is given power to establish the Adult Social Care Negotiating Body.
• Outlines matters within the ASCNB’s remit to include the remuneration and terms and conditions applicable to social care workers, and ‘any other specified matters’ relating to their employment.
• ‘Social care worker’ means any person who is employed (meaning as an employee or worker) wholly or mainly in, or in connection with, the provision of adult social care as defined in the Bill.
• The Secretary of State is given power make regulations regarding:
  • how the ASCNB may consider matters within its remit, the procedure for reconsideration, provisions relating to disagreements and ratification, and the ability of the Secretary of State to ‘step in’ where agreement cannot be reached;
  • allow for guidance and codes of practice to be issued;
  • impose record keeping obligations on employers; and
  • amend the National Minimum Wage Act 1998.

Comment

The Government originally committed to establishing sector-wide collective bargaining through which unions would negotiate fair pay agreements with employers across an entire industry (instead of merely a single employer or workplace). Instead, there will be the introduction of a fair pay agreement limited to the adult social care sector where the Government has identified issues relating to relatively high turnover and vacancy rates. A fair pay agreement is aimed at empowering workers, trade unions and employers to negotiate fair pay, terms and conditions, and training standards.

Next steps

The Government will launch a consultation "soon" to consider exactly how the fair pay agreement should work.

Policy

Strengthening trade union legislation and simplifying the process of statutory recognition.

The Bill's provisions

1. Right to statement of trade union rights

1. Employers will be required to provide to an employee a written statement of the worker’s right to join a trade union. This statement must be given at the same time as the employer provides the statement of their employment particulars, and at ‘other prescribed times’ that will be set out in regulations.
2. Details of the content and form of the statement, and the manner in which it must be provided, will also be specified in secondary legislation.
3. The penalties for failure to comply with this new requirement will mirror those that apply to a failure to provide a statement of employment particulars.

2. Right of trade unions to access workplaces

1. The Bill provides for ‘access agreements’ to be entered into between listed trade unions and employers that allow officials from those trade unions to access the workplace for the purposes of meeting, representing, recruiting or organising workers, or facilitating collective bargaining ('the accesses purposes').
2. The Bill sets out the access principles:
   1. union officials should be able to have workplace access for any of the access purposes in any manner that does not unreasonably interfere with the employer’s business;
   2. an employer should take reasonable steps to facilitate access by officials; and
   3. access should be refused entirely only where this is reasonable in all the circumstances.
3. The Bill sets out the process:
   1. the trade union submits an access request.
   2. the employer provides a response notice.
   3. the parties negotiate the terms on which union officials are to have access within a 'negotiating period'.
   4. jointly notify the Central Arbitration Committee (CAC) of the terms.
4. Both the access request and the response notice will need to be in a prescribed form, containing prescribed information and given in a prescribed manner.
5. An application may be made to the CAC to determine a union’s workplace access where the employer has not responded to the access request or negotiations have been unsuccessful.
6. The Secretary of State will have power to set out in regulations:
   1. The length of the 'response period' and the 'negotiating period'.
   2. The form and manner of the access request and response.
   3. The form and manner of notification to the CAC.
   4. Exempt certain workplaces.

3. Trade union recognition

1. Replacing the 10% application threshold for the CAC to accept a trade union recognition application with a new 'required percentage test'.
2. Removal of the requirement at the application stage for a union to demonstrate that there is likely to be majority support for trade union recognition.
3. Removal of the 40% support threshold at the recognition ballot stage (reverting to a simple majority threshold).

4. Trade union finances

1. Repeal of the requirement for trade unions to opt out their members from contributions to political funds, unless they have expressly requested to opt in. This will return (in substance) to the position before the introduction of the Trade Union Act 2016, trade union members being automatically opted in to contribute to a political fund, unless they expressly opt out.
2. Repeal of the Trade Union Act 2016 restrictions on public sector employers from providing a check off service.
3. Repeal of the power to make regulations requiring public sector employers to publish information relating to time off taken by trade union representatives (facility time).

Comment

The Bill will simplify the route to statutory recognition by revising the relevant voting thresholds and will introduce rights for unions to access workplaces for recruitment and organisation purposes. It also increased protections and facilities for union representatives.

In the 'Next Steps to Make Work Pay', the Government also states it will consult on how to strengthen provisions to prevent unfair practices during the trade union recognition process.

The Government believes that the current statutory trade union recognition process makes it too difficult for unions to gain recognition and the Bill aims to simplify this process by removing requirements at the application and ballot stage, and consulting on reducing the 10% application threshold for the CAC to accept a trade union recognition case.

Next steps - Consultation

On 21 October 2024, the Government opened the 'Consultation on creating a modern framework for industrial relations' which runs until 2 December 2024.

The Government is seeking views on updating trade union legislation, including:

• simplifying the union recognition process
• strengthening provisions to prevent unfair practices during the trade union recognition process
• removing the ten-year requirement for unions to ballot their members on the maintenance of a political fund
• the enforcement mechanism for the request for access to a workplace contained in the Bill.

Next steps

We await the outcome of the Consultation. The provisions regarding the new right of access to the workforce, statements of trade union rights and facilities. These provisions are not to come into force before sometime in 2026.

The repeal of the existing financial restrictions on contributions to political funds and deduction of trade union subscriptions from wages in the public sector as well as the repeal of the public sector facility time publication provisions will come into force two months after the Bill is passed.

As stated in the October 2024 Consultation, after the Bill is passed there will be more consultation to include:

• Lowering the admissibility threshold for the statutory recognition ballot process.
• Ensuring union members and workers can access a union at work.
• Introducing rights for trade unions to access workplaces for recruitment and organising purposes and a code of practice.
• Greater rights and protections for trade unions reps to undertake their work, strengthening protections for trade union representatives against unfair dismissal and union members from intimidation, harassment, threats and blacklisting.
• Introducing statutory rights for trade union equality reps in order to strengthen equality at work.

Policy

Modernise the rules on blacklisting.

The Bill's provisions

1. Extends prohibitions to lists that are not prepared for the purposes of discrimination, but that subsequently are used for that purpose.
2. Gives the Secretary of State power to widen the scope of the existing power in relation to third parties compiling lists and third-party use of blacklists.

Comment

This will enable regulations to be brought in to ensure that where AI compiles a list, where that list is subsequently used or sold or supplied by a person with a view to discriminate, that list becomes a prohibited list at that point.

Next steps

These provisions will come into force two months after the Bill is passed.

Policy

Strengthen the collective voice of workers.

The Bill's provisions

1. Removal of the provisions which introduced strike ballot minimum turnout thresholds of 50% of those entitled to vote and for key public sectors, an additional threshold of 40% of the entire membership must vote in favour of strike action.
2. Removal of the provisions which require certain information to be included on the ballot paper (summary of the trade dispute, specify the type of industrial action if other than a strike and the time period the industrial action is to take place).
3. Removal of the requirement to provide information to the employer on how many members were entitled to vote and whether the minimum thresholds have been met.
4. Removal of the requirement that an independent review is commission before the Secretary of State can permit electronic balloting.
5. The notice period a trade union must give the employer of industrial action after securing a ballot mandate to be reduced from fourteen to seven days.
6. Removal of the requirement for union supervision of picketing.
7. Repeal of the Strikes (Minimum Service Levels) Act 2023.
8. Miscellaneous changes to the powers of the Certification Officer.

Comment

Repeal of the power of the Secretary of State to specify minimum service levels (MSLs) during periods of strike action in the fields of health, transport, education, fire and rescue, border control, and nuclear decommissioning and radioactive waste management service has been largely trailed. Prior to the election, secondary legislation introduced MSLs for passenger rail, ambulance services, border security, and fire and rescue services. Although the ability of employers to give MSL work notices will legally continue until the legislation has been formally repealed, the Government "strongly encourages" employers to use alternative mechanisms for dispute resolution, avoiding the imposition of MSLs in the meantime.

Also as expected, the 2017 reforms introduced by The Trade Union Act 2016 are also being repealed.

The removal of the strike ballot minimum turnout thresholds of 50% of those entitled to vote and for key public sectors, an additional threshold of 40% of the entire membership must vote in favour of strike action, results in a return to the pre-March 2017 position. This means that provided the union allows all those being called upon to take action to vote, only a simple majority of those who actually vote is needed to validate the action. As such, if there is a very low turnout to vote, a strike could be called based on a small percentage of the actual membership who turned out to vote and voting in favour.

As regards the repeal of the information provisions, this will mean that the law will revert to requiring a trade union to ask its members on the ballot paper which type of industrial action they want to take part in, expressed in terms of whether it is strike action or simply action short of a strike. The type of action that a majority of members vote for will then (assuming other legal requirements are met) be protected and immune from legal action by the employers or others.

As regards electronic balloting, the Government intends to set up a working group to be launched by the end of 2024 including cyber security experts and trade unions, with full rollout implemented following the passing of the Employment Rights Bill removing the requirement for an independent review.

Not included in the Bill is the formal repeal of the provisions which purported to allow the use of agency workers to cover for striking workers. However, in the 'Next Steps to Make Work Pay' the Government stressed that these provisions have already been held by the High Court to be unlawful .

Next steps - Consultation

On 21 October 2024 the Government opened the 'Consultation on creating a modern framework for industrial relations' which runs until 2 December 2024.

The Government is seeking views on updating trade union legislation, including:

• simplifying the requirements on industrial action ballots and notice to employers
• securing a mandate for negotiation and dispute resolution
• extending the expiry of a trade union’s mandate for industrial action from six to 12 months
• reducing the industrial action notice period
• updating the law on repudiation and ‘prior call’

Next steps

We await the outcome of the consultation and any consequent amendments to the Bill or secondary legislation. These provisions will come into force two months after the Bill is passed, except for the repeal of the MSL provisions which will come into force immediately upon the passing of the Bill.

Policy

Strengthen the collective voice of workers

The Bill's provisions

1. Protection against detriment for taking industrial action. A worker will have the right not to be subjected as an individual to detriment by an act, or any deliberate failure to act, by the worker's employer, if the act or failure takes place for the sole or main purpose of preventing.
2. Employees will be protected against dismissal for taking part in industrial action for the length of the strike action by removing the current protected period (first 12 weeks).

Comment

In April 2024, in the case of Secretary of State for Business and Trade v Mercer, the Supreme Court made a declaration of incompatibility in relation to the lack of statutory protection from detriment for taking part in lawful industrial action (for example, withdrawing discretionary benefits). The Court found that section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992, which protects workers from detriment for taking part in trade union activities, does not provide protection from detriment for participating in lawful strike action. The Bill will rectify this perceived loophole.

Next steps

We await the content of the implementing regulations with implementation sometime in 2026.

Policy

Establishing a new single enforcement body, also known as a Fair Work Agency, to strengthen enforcement of workplace rights.

The Bill's provisions

1. The Bill provides that the Secretary of State has the function of enforcing certain specific ‘labour market legislation’ and allows for ‘enforcement officers’ to be appointed.
2. The legislation in scope includes (but is not limited to) the enforcement of:
   1. statutory sick pay and the national minimum wage – including entitlement to and record-keeping requirements;
   2. the right to paid annual leave;
   3. certain rules relating to the conduct of employment agencies and businesses;
   4. the financial penalties for a failure to pay compensation awarded or settled by the employment tribunal in a COT3; and
   5. some offences relating to gangmasters and modern slavery.
3. Detailed provisions are included in respect of the delegation of functions, the appointment of an Advisory Board, the requirement for a labour market enforcement strategy and reports, and various enforcement powers.

Comment

While not referred to by name in the Bill, in the 'Next Steps to Make Work Pay' the Government states it will establish the Fair Work Agency ('FWA') to bring together existing enforcement functions in relation to the above. The aim is to improve workforce retention by strengthening the employment rights framework to provide clarity for employers, tackling the undercutting that good employers currently face when trying to do the right thing.

Many of these areas are already covered by existing enforcement agencies which will be combined into one agency – the FWA. The Bill will combine the Employment Agency Standards Inspectorate, HMRC’s National Minimum Wage Enforcement Team, and the gangmasters and Labour Abuse Authority and abolish the Director of Labour Market Enforcement (DLME), who currently oversees the work done by these bodies.

A significant new addition is enforcement of rights to holiday pay. This is not currently subject to enforcement by a state agency, and it is also a notoriously complex area where employers may make inadvertent mistakes.

Since 2016, an employer who fails to pay a tribunal award/settlement can be subject to a penalty payable to the Secretary of State if the claimant completes an enforcement form. This is little used, indicating its inclusion is intended to bolster enforcement.

How effective of a body the FWA will be, will largely come down to a question of financial resources and priorities for enforcement.

On 4 November, the DLME issued a call for evidence focused on what the enforcement bodies need to be doing to prepare for the transition and in particular what should be the priorities for employment rights enforcement in the run up to the establishment of the FWA and then for the FWA. The call for evidence closes on 13 December 2024.

Next steps

The DLME is due to deliver the 'Labour Market Enforcement Strategy for 2025 to 2026' in March 2025. While more details of the Government plans for the FWA are expected to emerge throughout 2025, the DLME state there are no planned Government consultations specifically related to the FWA itself and the FWA will not become operational before the 2026/2027 financial year.

Policy

Stop employers who flout the rules (including “abusing the visa system” and “breaches of employment law”) from hiring overseas workers.

The Bill's Provisions

As introduced in Parliament on 10 October - nothing.

Proposed amendments

On 28 November 2024, the Home Office and the Department of Health and Social Care announced they will introduce an amendment to the Bill to ensure:

• Employers who repeatedly breach visa rules or commit serious employment law breaches (such as failing to pay the NMW) will be barred from hiring overseas workers for at least two years.
• Increase from three to twelve months the length of sponsor licence plans (which restrict sponsoring migrant visas).
• Prevent employers from charging skilled workers for any costs of sponsorship.

Comment

The measures are part of Government efforts to link migration policy with skills and wider labour market policy.

Policy

The time limits within which employees are able to make an employment claim is to be increased from three to six months.

Bill's provisions

As introduced in Parliament on 10 October - nothing.

Tabled amendments

On 26 November 2024, the Government tabled amendments to increase the time limits bringing employment tribunal claims from three months to six months.

Comment

Given this policy choice was included in the Plan to Make Work Pay which was part of Labour's manifesto, it was surprising that this was not included in the initial draft of the Bill.

The increase in time limits from three to six months is likely to lead to an increase in tribunal claims giving potential claimant longer to seek legal advice and also conclude internal grievances/appeals before deciding to initiate legal proceedings.

For other trailed reforms see 'Tribunal Procedure' below.

Policy

Nothing set out in 'Make Work Pay' documents

Bill's provisions

As introduced in Parliament on 10 October - nothing.

Proposed amendment

On 27 November, a Conservative MP proposed an amendment which would prohibit the use of “substitution clauses”, between employers or a contractor of services and an employee, worker or dependent contractor.

Comment

From the MP's very brief explanatory statement, this appears to be aimed at courier service providers. This is highly unlikely to be taken on by the Government and make its way into the final version of the Bill. Perhaps an issue that will arise in the future promised debate on a move to a single 'worker' status.

The statutory Code of Practice on Dismissal and Re-engagement devised under the previous Conservative Government came into force on 18 July 2024. The new Code sets out how employers should act when:

1. it is considering making changes to one or more of its employees’ contracts of employment; and
2. it envisages that, if the employee and/or representative does not agree to some or all of the changes, it might opt for dismiss and re-engagement in respect of that employee.

Employers are expected to consult employees and explore alternative options, without raising the prospect of dismissal unreasonably early or using the threat of dismissal as a negotiating tactic to put undue pressure on employees.

Notably, the Code states that "the employer should contact Acas for advice before raising the prospect of dismissal and re-engagement". Failure to follow the Code could result in a 25% uplift to compensation awards in relevant cases including unfair dismissal and discrimination. A notable omission from the list of clams to which a 25% uplift can apply are protective awards for failure to collectively consult on collective redundancies. The pre-election proposed addition of protective awards unfortunately failed to gain House of Lords' approval before the general election.

On 2 December 2024, a new The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 was made providing for the 25% uplift to apply to protective awards for failure to collectively consult on collective redundancies from 20 January 2025.

See above for future reform under the Employment Rights Bill to further strengthen the Code.

The Employment (Allocation of Tips) Act 2023 together with the statutory Code of Practice on Fair and Transparent Distribution of Tips came into force on 1 October 2024.

Under the new provisions:

• Employers must distribute all qualifying tips, gratuities, and service charges" to workers fairly and transparently, without any deductions except for income tax.
• Qualifying tips must be paid no later than the end of the month following the month in which they were paid by the customer.
• Employers are required to keep detailed records of all tips received and their distribution among workers with workers having the right to request access to these records.
• Where tips are paid on more than an occasional or exceptional basis, employers must maintain a written policy detailing how tips are managed and distributed.
• It will still be possible for employees to pool tips and for tronc systems to be operated independently of the employer.

As for penalties for non-compliance, businesses found non-compliant with the legislation risk facing claims in the employment tribunal. A compensation payment of up to £5000 may be ordered in respect of each worker:

• where a claim relates to a failure to comply with the obligations regarding a written policy or keeping records than the usual three-month time limit applies.
• However, for claims regarding allocation or payment of tips, a significantly longer 12-month limitation period applies starting from the date of non-payment or incorrect allocation. Where the complaint relates to a series of failures to comply, the 12-month period will commence with the date of the last failure in the series.

See above for future reform under the Employment Rights Bill concerning workforce consultation and review of tipping policies.

On 26 October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force. The Act introduces a new positive legal obligation on employers to take "reasonable steps" to protect their workers from sexual harassment. If an employer breaches the preventative duty, the Equality and Human Rights Commission (EHRC) will have the power to take enforcement action against the employer. In addition, employment tribunals will have the power to increase compensation by up to 25% where an employer is found to have breached the new duty.

Under the existing provisions of the Equality Act 2010, where a person commits an act of discrimination (including harassment) in the course of their employment, their employer is ordinarily liable for that act, in the event a claim is brought, unless the employer can show that it took "all reasonable steps" to prevent the discrimination from arising. "All reasonable steps" is a high bar, and many employers find it difficult to demonstrate that they have taken all such steps.

It will remain the case that to establish the existing statutory defence in a sexual harassment claim involving harassment by a colleague, the employer will still need to show that it took "all reasonable steps" to prevent the sexual harassment. But where a claim is upheld and the employer fails to establish the statutory defence, the employer may still potentially be able to avoid a "failure to prevent claim" and the corresponding 25% uplift to compensation if the employer can show it took "reasonable steps" to prevent sexual harassment of employees – a lower threshold. Employers need to think now about what steps they currently have in place and any further measures they can put in place with a good paper trail.

In July, The EHRC's Technical Guidance: Sexual harassment and harassment at work (originally issued in January 2020) was updated to include a new chapter with information on the new preventative duty.

During a difficult passage through Parliament, the originally proposed provisions of the 2023 Act were very significantly diluted:

• The original provisions provided for re-introducing employer liability for third-party harassment of workers in the course of their employment was removed; and
• the potential 25% compensation uplift in sexual harassment cases, test was changed from requiring employers to have taken "all reasonable steps" to simply "reasonable steps".

The Employment Rights Bill published on 10 October 2024 contains provisions to revert to its original drafting, which would make employers responsible for taking 'all reasonable steps', not just "reasonable steps" to prevent sexual harassment in the workplace and also to provide protection from harassment from third parties generally. It is therefore in employers’ best interests to ensure that they have robust processes in place in this regard.