Employment legislation update March 2025

Employment Rights Bill – this had its second reading in the House of Lords on 27 March.  The Committee stage is due to start on 29 April.  The Bill contains numerous provisions, which include:

• Employees will have the right not to be unfairly dismissed from day one of employment. There will be an “initial period of employment” (like a probationary period) of three to nine months, during which a lighter-touch process for dismissal will apply in most cases. (In a redundancy situation, the standard unfair dismissal principles will apply.) A different compensation regime may apply.
• Statutory sick pay will be payable from the first day of absence (instead of the fourth) and the lower earnings limit will be removed. If someone earns less than this, they will be paid 80% of their average weekly pay.
• Large employers (with more than 250 employees) will have to create action plans setting out what they will do to address the gender pay gap and support women through the menopause.
• Pregnant women and those on maternity or other family leave will have additional protection from dismissal so that they cannot be dismissed for six months after they return to work.
• Employers will have to take “all” reasonable steps to prevent sexual harassment at work and employer liability for third party harassment will be re-introduced.
• Flexible working will be the default position for all workers from day one of employment, where practical. An employee will still have to make a request, and the employer will be able to refuse it for one of the current specified grounds (eg the burden of extra cost or an inability to meet customer demand) but a refusal will have to be reasonable and the employer will have to explain the grounds for refusal in writing and why their refusal is reasonable.
• Collective consultation will also be required if the number of redundancies across the business as a whole meets a certain threshold (to be decided). The maximum protective award for a failure to consult collectively will double to 180 days’ gross pay per employee.
• Workers on zero hours contracts and low hours contracts (including agency workers) will have the right to a guaranteed hours contract that reflects the hours they regularly work over a 12 week period. People will be able to remain on zero hours contracts if they want to. Workers on these contracts will be entitled to reasonable notice of a shift or working time and of any change. If a shift is cancelled, moved or shortened without reasonable notice, they will get proportionate compensation.
• Union rights will be increased. There are a large number of provisions in this regard and they include:
  • Making it much easier for unions to gain statutory recognition
  • Requiring employers to give workers a statement informing them of their right to join a union (both when they start work and on a regular basis)
  • Giving trade unions a reasonable right to enter workplaces to recruit and organise
  • Repealing the Trade Union Act 2016 (relating to ballots and strikes) and the minimum service levels legislation
  • Allowing electronic trade union ballots
  • Mandates for industrial action will be extended to 12 months and unions will have to give employers 10 days’ notice of industrial action.
• The Bill will make it almost impossible to fire and rehire (or fire and replace) employees.
• There will be a new right to unpaid bereavement leave. A new right to miscarriage bereavement leave is likely to be added to the Bill.
• Paternity and parental leave will be available from day one of employment.
• Employment tribunal limits will be extended from three to six months for nearly all claims.
• There will be a new enforcement body, called the Fair Work Agency, which will have wide powers of enforcement (including bringing employment tribunal proceedings on behalf of workers and imposing financial penalties on employers).

The Government carried out some consultations on the Bill last year and will be consulting further this year.  Much of the detail of the law is still to be decided and this will come out of the various consultations.  Statutory Instruments and Codes of Practice will be needed to implement many of the reforms, which will happen after the Bill is passed: Employment Rights Bill – Parliamentary Bills – UK Parliament

Neonatal Care (Leave and Pay) Act 2023 – the Department for Business and Trade has confirmed that a day one right to neonatal care leave for working parents with babies in neonatal care for at least one week will be introduced on 6 April.  Neonatal care pay will be available for employees who meet continuity of employment requirements and the minimum earnings threshold.  Various sets of Regulations have been made supporting the introduction of this new right: Parents to receive day one right to neonatal care leave and pay – GOV.UK