In May, the Labour Party announced its ‘New Deal for Working People,’ promising “the biggest upgrade to workers’ rights in a generation.” With plans to introduce new employment legislation within 100 days, employers across the UK are seeking guidance on how to prepare.
On Thursday 5th December, we opened our doors for a breakfast morning to recap and break down the most significant changes to the Employment Rights Bill. Our HR Talent Acquisition Director, Louise Carling was joined by guest host, Nic Elliott, Head of the Employment Team and HR Director at Actons Solicitors.
Drawing on their expertise in HR and employment law, their talks focused on distinguishing fact from misinformation, while addressing critical issues like the impact on policies and the need for enhanced recruitment practices. Accompanied by pastries and 200 Degrees Coffee, the session evolved into an open discussion where attendees explored practical implications and received actionable advice to navigate these challenges. Below are the key takeaways from the morning.
Navigating the updated Employment Rights Bill
Day one rights and unfair dismissal
Under the updated legislation, protections against unfair dismissal will apply from the first day of employment. However, claims for unfair dismissal cannot be made before employment officially begins.
Nic explained that a new concept, the ‘initial period of employment,’ will be introduced to support this change. This is different from the probation period and importantly, any unfair dismissal claims made during this initial period will follow a different compensation framework.
Zero-hours contracts
Zero-hours contracts are intended to allow mutual flexibility – employers are not obligated to offer work and employees are not required to accept it, allowing them to prioritise other commitments such as childcare. However, as the UK government acknowledges, “(…) without proper safeguards this flexibility can be one-sided, with workers bearing all the financial risk.”
To address this imbalance, Labour has confirmed its intent to ban “exploitative zero hours contracts.” Nic outlined three key provisions in the Employment Rights Bill aimed at protecting workers:
- Right to a guaranteed hours contract
Based on a 12-week reference period, employees on zero-hours contracts will have the right to a contract guaranteeing the hours they regularly work. This provision offers workers more stability and certainty.
- Right to reasonable notice of being required to work a shift
Employers will be required to provide workers with reasonable notice when requesting a scheduling a shift. The new regulations will define a specific timeframe and workers will be able to file a tribunal claim if notice is deemed inadequate.
- Right to reasonable notice of cancellation
Employers must also give workers reasonable notice if a scheduled shift is cancelled. If sufficient notice isn’t given – as set out in the new Bill – employers will be required to compensate affected workers.
Statutory Sick Pay
Currently, Statutory Sick Pay (SSP) is payable from day four of sickness. Labour’s proposed update will make SSP payable from day one and remove the lower earnings threshold of £123 per week. As Nic emphasised, there is no plan to make SSP recoverable from the government, meaning the cost will remain the responsibility of employers.
Fire & Rehire
‘Fire and rehire’ describes dismissing an employee and then offering them a new contract, usually with less favourable terms. Nic provided a brief recap of the current law, explaining; “dismissing an employee who refuses to accept a change to their terms and conditions is potentially fair, such as in the case of an “SOSR” dismissal (some other substantial reason).”
“Under the new law, it will be automatically deemed unfair to dismiss an employee if the sole reason is their refusal to agree to new contract terms, to enable the employer to hire someone else, or to rehire the same employee with substantially the same duties, under new terms.”
Third-party harassment
Employers will have a duty to take reasonable steps to prevent harassment by third parties, such as customers, suppliers and clients. Direct liability will be imposed on employers if they haven’t complied. Nic highlighted that these reasonable steps will depend on factors like the size of the company and its resources.
Our Director, Louise shared what this update has meant for Distinct; “I know some of the factors around third party harassment are difficult to pin down because you can’t fully control the actions of others, but you can show that reasonable steps have been put in place. For us, it has been about that exploration of what we can do to help protect our people.”
After the session, Nic shared a video – skillfully navigating the Lace Market – summarising the main points from the event’s discussions. He highlighted two recurring themes;
“The discussion came back around to two key things. First, supporting managers to manage well, and investing in managers (…). Secondly, technology. Investing and getting plenty of data around what’s happening in your workforce, to help inform the decisions you make.
It’s quite reassuring that it comes back to the same principles we’ve been talking about for years, and getting those right will allow you to drive success in the organisation as a result. So hopefully that’s reassuring for everybody.”
Key takeaways
Don’t panic. Nic reassured attendees that there is no need for immediate action regarding upcoming legislative changes. However, preparation is key to ensure businesses are ready when the time comes.
- Make the most of the preparation period
Although the changes won’t take effect for another two years, this is a golden time to refine contracts and address performance management. As Louise noted – “We have to ensure we’re properly managing probation periods, supporting managers in getting them right and shifting mindsets.”
- Inclusivity matters
Louise highlighted the positive impact of the changes – “From an inclusivity perspective, it’s a big tick – there’s some great stuff in there”. Labour’s ‘Plan to Make Work Pay’ will benefit our customers and candidates, as they will all reap the rewards of treating people fairly.
- The importance of hiring right
The updates emphasise the importance of making thoughtful, strategic hiring decisions from the outset, ensuring the best outcomes for businesses and employees.
Louise emphasised how the changes align with Distinct’s values, in particular – Doing the right thing. “It’s exciting to see a shift where all employers are encouraged to treat their people in the best way possible. These changes should be viewed as a step forward, not a cause for concern.”
A memorable event
Louise expressed her gratitude to all attendees and speakers – “The ideas, energy and collaboration in the room were incredible. Feedback from one HR Director called it ‘the best event she had been to,’ highlighting the value of in-person experiences over webinars.”
Jaimee Bishop, People Operations Manager at Distinct added – “This was an incredible opportunity to engage with industry peers. It was fantastic to see the interaction and genuine collaboration. As a representative of Distinct, I felt truly proud.
Nic Elliot’s fab presentation made the sometimes-complex content easily digestible and clear without instilling unnecessary fear or concern. His expertise and approachable style were reassuring and empowering, leaving attendees with practical takeaways and a sense of confidence in navigating these updates.”
Supporting employers through change
Thank you again to all who joined us – and a sincere thank you to Nic Elliott for sharing your expertise. We look forward to hosting more open discussions and events in the future.
As a leading recruitment agency across the Midlands and London, we are well placed to support businesses of all sizes throughout this significant period of change. Contact us today to discuss upcoming changes to employment law and how we can assist with your hiring needs.
