Zero Hours and ‘Low Hours’ contracts
The Bill contains measures which the government says are designed to end ‘exploitative’ zero-hours contracts. Many of the details are subject to consultation, but the Bill sets out a regime that has the potential to offer much-needed certainty and increased rights to those currently working in sectors where such contracts are commonplace. The Bill introduces the following regime in relation to ‘Zero’ and ‘Low hours’ contracts:
- Workers on zero-hour contracts or ‘low-hours’ contracts have the right to be offered a ‘guaranteed hours’ contract if they have worked regular hours over the reference period. The details of what qualifies as a ‘low hours’ contract, regular hours, and the length of the reference period will be determined by Regulations following consultation.
- The guaranteed hours contract must be on no less favourable terms than the previous working arrangement. If the worker has had variable terms over the reference period, the least favourable of these terms can only be offered if this can be shown by the employer to be a ‘proportionate means of achieving a legitimate aim’.
- The guaranteed hours contract can be for a fixed term if this is reasonable in relation to the contract relating to a specific event or task, or the employer can show a genuine temporary need for workers.
- The Bill sets out rights for workers to be given reasonable notice of their shifts and of the cancellation of work in specified circumstances. The time periods in relation to what is ‘reasonable notice’ are subject to further clarification in regulations.
- Workers will have a right to bring employment tribunal claims in relation to breaches of the legislation. Regulations will set appropriate levels of compensation, but the Bill makes reference to compensation being just and equitable and setting a maximum number of weeks compensation.
Click here to see a more detailed analysis of Zero Hours and ‘Low Hours’ contracts.
Addressing Fire & Rehire
The Employment Rights Bill introduces new protections against ‘fire and rehire’ practices, aiming to prevent employers from dismissing employees simply to re-engage them on less favourable terms. These are the key points:
- The Bill creates a new automatic unfair dismissal right to address fire and rehire dismissals, which will be inserted into the Employment Rights Act. This right will sit alongside existing provisions that provide protection for employees by making it automatically unfair to be dismissed for asserting a statutory right.
- The new right will be engaged and create an automatically unfair dismissal where an employee is dismissed by their employer for not agreeing to vary their contract or if the employer dismisses the employee to replace or to re-engage them on varied contractual terms. It will only not be automatically unfair if the employer can show they fall within a prescribed exemption. The clause, therefore, addresses both a conventional fire and rehire exercise and the sort of dismissal tactics deployed by P & O in 2021 when they dismissed their existing workforce and engaged an entirely new workforce on less favourable terms and conditions.
- In order to fall within the prescribed exemption, the employer will need to be able to demonstrate 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” and the employer could not avoid making the variation. A parallel test is to be applied to some public-sector bodies that do not operate a business as an ongoing concern.
- Even where an employer falls within this exemption, an employment tribunal will still need to consider whether the dismissal was fair in all circumstances. To assess that, it will consider several factors, including whether there has been consultation and whether the employer offered anything to the employees concerned in return for agreeing to the variation.
Click here to see a more details analysis in relation to Fire and Rehire.
Equality and family-friendly rights
As anticipated the Employment Bill will introduce the right for all employees not to be unfairly dismissed from day one in employment by repealing s. 108 of the Employment Rights Act 1996. The right is modified for those in the “initial period of employment” which will be set out in regulations. Equality and family-friendly rights are also enhanced as follows:
- The right to request flexible working under s. 80G of the ERA 1996 is enhanced as a result of shifting the burden to employers to justify the reason for refusing the request. Employers will be required to set out which reason they are relying on and explaining why it is reasonable to refuse the application on that ground.
- Introducing day one rights to unpaid parental leave and paternity leave as well as a new right to bereavement leave to grieve for the loss of a loved one. Regulations will introduce a right for pregnant employees not to be dismissed during pregnancy and for a six-month period following their return from maternity leave. The right to protection from dismissal will also apply to employees returning from a period of family leave (maternity, paternity adoption and shared parental leave ).
- Protection from harassment is amended so that the duty on employers is to take all reasonable steps to prevent harassment in the workplace. Regulations will set out what steps it is reasonable for an employer to take, including steps relating to the reporting and handling of complaints. Section 43B of the ERA 1996 is amended to provide that the disclosure of sexual harassment in the workplace is a protected disclosure. A duty on employers not to permit third parties harassing employees in the course of employment is also introduced.
- Employers with 250 or more employees will be required to publish equality action plans along with gender pay gap information.
Click on these links for a more detailed analysis of Equality and Family-friendly rights.
Fair Pay and Trade Union Rights
The Bill represents an important first step in upgrading trade union rights by reversing much of the Trade Union Act 2016, abolishing Minimum Service Levels and making it unlawful to subject workers to a detriment for participating in balloted industrial action. Key provisions include:
- Removing some of the burdens on trade unions introduced by the Trade Union Act 2016 (additional Certification Officer powers, industrial action notice and voting paper requirements, ballot thresholds and restrictions on collecting subscriptions by check-off in the public sector) and reversing the ‘opt-in’ for contributions to political funds;
- Repealing Strikes (Minimum Service Levels) Act 2023; Introduction of a new right not to be subjected to a detriment for taking part in balloted industrial action; • Re-establishment of a School Support Staff Negotiating Body and power to establish an Adult Social Care Negotiating Body;
- Statutory recognition: power to relax the 10% admissibility test, and requiring the CAC to issue a declaration of recognition where a majority vote in favour in the ballot; and
- New procedure for negotiating access agreement to workplaces.
For a detailed analysis of Fair Pay and Trade Union rights, click here.
Other Individual Rights
- The Bill establishes the power to introduce secondary legislation to protect public sector workers from less favourable treatment after being outsourced. The same power allows for the levelling-up of the supplier’s existing staff (where appropriate), thereby addressing the issue of the 2-tier workforce.
- The Bill requires new starters to be given a written statement saying that they can join a trade union. Separate regulations can be made to set out other information about trade union rights, which must be included.
- There will be a single enforcement body for various workplace obligations such as those relating to employment agencies, working time regulations, national minimum wage, modern slavery and gangmasters. It will have important investigative powers, such as the ability to enter premises to search and seize documents. An enforcement regime of ‘Labour Market Enforcement Undertakings’ is to be introduced with criminal law consequences for breach. An advisory board will be established to direct these activities and report on its activities.
To learn more about other Individual Rights within the Employment Rights Bill, click here.
Full Briefing: The Employment Rights Bill
