The Employment Rights Bill was published in October 2024, based on Labour’s Plan to Make Work Pay presented ahead of last summer’s General Election. The Bill is paving the way for a lot of changes, including the expansion of “day one” employment rights. And the implementation of these rights looks set to potentially have a significant impact on businesses.
It’s not anticipated that the associated reforms will be implemented until 2026. But consultations began last October and will continue this year. So it’s worth thinking now about what your business needs to do to be ready for the changes so you have enough time to prepare.
What are some of the “day one” changes expected?
Amongst the many reforms proposed to take place are the introduction of day one rights to paternity leave, parental leave and bereavement leave. It’s also intended that the two-year qualifying period currently needed to submit an unfair dismissal claim will be abolished, giving employees the right to submit a claim from day one. It’s anticipated this particular change won’t be introduced until Autumn 2026. If that ends up being the case, it means any employees starting with you now won’t need to reach two years’ service to be able to submit an unfair dismissal claim.
It’s also intended that there will be day one sick pay rights, with the removal of the current four day waiting period for statutory sick pay. That will be coupled with the removal of the lower earnings limit. Flexible working will also become a day one ‘default’ right. The onus will be on your business to actively prove why flexible working is not feasible for a given employee.
So what action can you take now to be ready for the Employment Rights Bill?
Review your policies, procedures, handbooks and contracts
These reforms are inevitably going to mean changes to policies, procedures, handbooks and contracts. Obviously, you’ll need to keep reviewing them as more details are announced. But we do know enough already about the intended direction to make progress now and to start getting ahead with what needs to be done. You can carry out an initial review to pick out any areas that might need updates. And consider where changes or improvements to current practices might be necessary going forward.
For example, there’s likely to be an increase in the number of flexible working requests. So make sure your process is fair and transparent. And statutory sick pay eligibility will be extending – so now is the time to make sure you have a robust absence management system.
Revisit your approach to performance management
Look at what you can do to get the best from your employees. The Employment Rights Bill will require more from you as an employer and most likely increase costs. So it’s vital that you have an efficient, productive, engaged and reliable workforce in return. You’ll find more thoughts about how you can maximise your employees’ performance here.
You also need to be ready to deal with any poorly performing employees. There’s more guidance on managing poor performance here. As well as having robust processes for managing performance, make sure capability and conduct policies are up to date too. And check associated policies like disciplinaries.
Scrutinise your current use of probationary periods as well. If you don’t use them, you might want to consider introducing them. It’s still to be determined what probation periods will look like going forward and to what extent they will be ‘lighter touch’ when it comes to dismissing an employee. But make sure your probationary period policies are clear. You will still need a process that involves meeting with an employee to discuss any performance concerns during probation. You’ll also need to give opportunities to improve before deciding to dismiss. And you’ll need objective evidence of why the employee was ultimately not a good fit for the role.
Consider likely training needs for managers and employees
Your managers are going to play a pivotal role in making sure your business complies with everything required under the Employment Rights Bill. For example, the combination of day one rights to make an unfair dismissal claim, and potentially an extended window in which to submit it, raises the risk for all employers. Line managers need to know the part they must play in reducing that risk.
So make sure they know that changes are on the way. And ensure they understand and are applying current policies and procedures well to minimise any risks right now or in the near future. They must be clear on the importance of following processes and always applying them fairly. Remember too that you will also need to consider the engagement and training of your employees about the changes. Make sure you keep a record of all updates and confirmation that both managers and other employees are aware of the latest policies, procedures and handbooks.
Get ready for change
The Employment Rights Bill extends beyond the day one rights of course. In total, there are 28 different employment law reforms planned, including significantly strengthening the recently introduced statutory code of practice relating to firing and rehiring, and reviews of trade union laws. Through consultation there will be opportunities to at least shape the legislation and proposed policies, so keep an eye out for those.
But the announcements in October 2024 give a clear indication of what lies ahead. If you need support working out where to go from here, please do talk to us. We provide a range of flexible HR services. They include the option of booking 15-minute blocks of highly focused time to talk through a specific query. Alternatively we can provide our HR services on a retained or consultancy basis. Please do get in contact to find out more.
