The government has described the Employment Rights Bill as “the biggest upgrade in employment rights for a generation”.
Having passed its second reading in the House of Commons, the Bill is currently awaiting amendment in the House of Lords. Spring or Summer 2025 appear realistic for the Bill to pass into law.
The government predicts an increase of more than 5,600 extra tribunal claims once the Bill becomes law, a 15% increase from current figures. Unfair dismissal claims are predicted to increase the most.
To date, there have been no announcements relating to extra funding for the Employment Tribunal system in order to deal with the likely influx in new cases.
The main changes are as follows:
Unfair dismissal
The current two-year qualifying period for unfair dismissal claims will be discarded.
The Bill introduces the concept of an “initial period of employment” (IPE), during which the standard of reasonableness for dismissals will be modified provided the reason (or principal reason) for dismissal is related to the employee's conduct, capability, statutory reason, or some other substantial reason.
The IPE modifications should enable employers to dismiss employees more easily during the IPE, which may be up to 9 months. Many employers are already considering expending probationary periods in order to mirror the likely IPE. However, redundancy has been omitted from the list which means that employees made redundant during the IPE have the full right to claim unfair dismissal from day one.
Flexible working
Currently, employers must deal with flexible working requests in a “reasonable manner”. An application can only be refused if one of the statutory grounds apply, including the burden of increased costs, inability to recruit more staff and a negative impact on the goods or services supplied by an employer.
The Bill introduces an additional reasonableness requirement. An employer can only refuse the flexible working request if one of the statutory reasons apply and it is “reasonable to refuse” the application.
The employer must state the statutory ground or grounds it relies on and explain why they consider it “reasonable to refuse”.
Sexual harassment
The Bill introduces the duty to prevent sexual harassment. Employers will be expected to take “all reasonable steps” to prevent sexual harassment.
To date, there has been no clarification on what employers would have to do to comply with this requirement. Such clarification is expected.
A new category of “sexual harassment” will also be included for whistleblowing purposes.
Fire and rehire and varying employee contracts
It will be automatically unfair to dismiss an employee if the reason or principal reason is the employer's attempt to vary the employee's contract without their consent or to re-engage the same individual under a revised contract to perform the same job as before.
Dismissal due to a failure to agree to a contract variation will only be fair if the reason for the variation relates to an employer’s financial difficulties.
There must be a “genuine lack of alternatives” for employers before being able to use this ground to vary an employee’s contract. The burden will be on the employer to prove financial difficulties and the lack of any other alternatives other than variation of an employee’s contract.
Further information
For further information regarding employment law, please do not hesitate to contact Mr Bill Dhariwal on (DDI: 01489 864 117) and (E: bill.dhariwal@lawcomm.co.uk).
The contents of this article do not constitute legal advice.
