Issue 22 - Winter 2025

Employment Law – Changes to the Employment Rights Bill

Guest article from Sue Pardy – Face2Face HR

Part of the Labour Party’s manifesto for the General Election last July was about significant change they wanted to make to employment law.  In October we got the first sight of the Employment Rights Bill.

Below I highlight the main takeaways and also look at what wasn’t included in the Bill but had been mentioned in the manifesto:

1. Unfair dismissal as a right from ‘Day One’ policy

Currently employees cannot claim unfair dismissal until they have two years of service (with some specific exceptions mainly relating to exercising statutory rights). This qualifying period will be removed, and employees who have started work will have the right to bring claims of unfair dismissal from day one, as long as they’ve started work.

There will be a consultation on a new probationary period arrangement which will enable easier dismissals for capability, conduct, statutory illegality (where continuing to employ someone would break the law) or SOSR (Some Other Substantial Reason), during the first few months (probably nine months) of employment. The probationary period arrangements, whatever they will be, won’t apply to redundancy dismissals, which will need to be conducted fairly from day one.

2. Ending fire and rehire

The Statutory Code of Practice on Dismissal and Re-engagement came into force on 18 July 2024. 

A formal order came into force on 20 January 2025 confirming that one of the consequences of a failure to follow the Code when going through a termination and re-engagement exercise is that if a Tribunal award is made for a failure to collectively consult about the terminations, the Tribunal can increase the award by up to 25% if the employer has unreasonably failed to follow the Code (or can reduce an award by up to 25% if an employee has unreasonably failed to follow the Code).

Labour want to take this further – in the King’s Speech, the Labour Government confirmed that it would continue to uphold its pre-election promise to “reform the law to provide effective remedies and replace the previous Government’s inadequate statutory code”. At some point in the near future, this Code is therefore likely to be replaced.

3. Ending ‘exploitative’ zero hours contracts

There are several provisions for zero hours workers – an obligation for employers to offer a guaranteed hours contract, reflecting how many hours the employee worked during a prior so-far-undefined ‘reference period’, and also enforcing reasonable notice of shifts, and of cancellations of shifts. We don’t know what ‘reasonable’ will look like. More detail on this will be very welcome as it will impact many small businesses.

4. Protection from sexual harassment

Employers have a duty to take reasonable steps to prevent sexual harassment, including harassment by third parties, but are not technically liable for third party harassment currently.

This will change, and employers will be liable for third party harassment. Employers will also be expected to take not only ‘reasonable steps’ but ‘ALL reasonable steps’. We don’t know what those steps will look like but it’s likely to include risk assessments, processes for reporting, training and policies.

Because there is a requirement to take reasonable steps coming in very shortly anyway, it’s worth bearing in mind the requirement is likely to strengthen in future and taking that into account when you decide what, if any, additional prevention steps you are taking in your business now.

5. Flexible working

There was a lot of noise about making flexible working the default and enforcing a four dayweek, but in fact the changes here are minimal. Currently, employers must deal with flexible working requests in a ‘reasonable manner’ and can refuse the request for one or more of eight specified reasons. The change seems to only be that the refusal needs to be ‘reasonable’ and the employer will need to clearly state the grounds of refusing the application and explain why they consider it reasonable to refuse the application on those grounds. Most employers will have been giving that detail already.

The penalty for a breach isn’t going to change either, it will stay at eight weeks’ pay as it is currently.

6. Bereavement leave

Parental bereavement leave was introduced in 2020, and the proposal is to extend this to all bereaved employees, not just parents (although for a week rather than the two weeks bereaved parents get). It’s unclear how a bereaved person will be defined in terms of their relationship with the person who has died.

7. Parental and paternity leave

Both of these will become day one rights. Parental leave is the right to take up to 18 weeks’ unpaid leave in respect of each child up to their child’s 18^th birthday, sometimes used to cover school holidays or similar.

8. Neonatal Care

The Department for Business and Trade published a press release on 20^th January 2025 confirming that a day one right to neonatal leave for working families with babies in neonatal care will be introduced from 6th April this year. This news follows the passing of the Neonatal Care (Leave and Pay) Act in 2023. 

Neonatal Care Leave will apply to parents of babies who are admitted into neonatal care up to 28 days old and who have a continuous stay in hospital of 7 full days or longer. These measures will allow eligible parents to take up to 12 weeks of leave on top of any other leave they may be entitled to, including maternity and paternity leave. Alongside the leave entitlement, Statutory Neonatal Care Pay will be available to those who meet continuity of service requirements and a minimum earnings threshold. 

The government has laid regulations to implement the change which, subject to Parliamentary approval, will take effect from 6th April 2025.

9. Enhanced dismissal protection for pregnant employees and new parents

There are existing protections when it comes to redundancy, but there are proposals to strengthen protection against dismissal more generally for pregnant employees and those returning from family leave. It’s not clear what the protections will be.

10. Statutory sick pay

Currently there is a waiting period of three days before SSP kicks in, and a lower earnings threshold below which employees don’t qualify. Both of these will be removed, meaning SSP will be due from day one, and those on lower earnings will get a percentage of their normal pay (yet to be defined).

11. Collective redundancy consultation

Where a business is making 20 or more people redundant, there are specific obligations to consult for at least a month, called ‘collective consultation’. Currently the 20 employees are calculated based on numbers at an ‘establishment’, meaning that businesses with several branches may avoid the requirement if fewer than 20 are being made redundant at any branch. The upcoming change will be to the method of calculation – redundancies across the whole business will be counted. For most small businesses, collective consultation is still unlikely to apply, but it does become more likely so worth bearing in mind.

12. Written statement of particulars of employment

Your contracts will need to include a written statement that the worker has the right to join a trade union – we’ll find out later exactly what wording needs to be included.

So what’s missing?

These things have been mentioned but have not yet appeared…

• There’s nothing about a ‘right to switch off’. 
• There’s nothing reviewing current family leave arrangements. 
• Perhaps most significantly, there is nothing about changing employment status arrangements. Labour were keen to change our current three tier system of employment status (employee, casual worker and self-employed person) to a two-tier system, something many small businesses would have been very worried about.

All these things may well come later, we’ll have to see.

Ensuring Compliance: Practical Steps for Businesses

To stay ahead of these changes, businesses should:

• Conduct a thorough review of existing contracts and policies.
• Provide training for managers on new employment rights.
• Stay informed about legislative updates and timelines.

Timings and Next Steps

While the exact timelines are yet to be confirmed, staying informed and proactive will help you stay ahead of these changes as they develop. Now is the time to review your policies to ensure they align with upcoming changes.

If you need support navigating these legislative updates, we’re here to help.  sue.pardy@face2faceHR.com | 07936 663314