The Employment Rights Bill has been talked about extensively in the media in terms of what changes the government plan to put forward, but what will the changes actually mean for your small business?
CURRENT RULES | PROPOSAL | WHAT IT MEANS |
Unfair dismissal - employees must have at least 2 year's service before they have protection from unfair dismissal | The Bill proposes to protect employees from unfair dismissal from day 1 of employment and introduce a statutory probationary period. | This means that you will need to have a really robust process for managing employees on probation because we may no longer be able to rely on the "less than 2 years service" excuse for dismissal. It's worth scheduling a review of your current probationary periods and what processes you currently have in place to manage performance or conduct issues for 2025. |
Fire & Re-hire - these processes are generally used when a company needs to change their terms of employment and an employee refuses to agree to the new terms. The employee can be dismissed and offered re-engagement on the new terms. | Fire & re-hire processes which are used to push through a change will be considered automatic unfair dismissal except where the business can give a solid case for being unable to reasonably avoid pushing for the change. | Wherever possible, we avoid using these practices anyway by conducting solid consultation procedures. However, there will always be circumstances where we need to change contracts as your business changes so it's always worth considering the business need for such changes. |
Maternity protections - currently employees who are pregnant and on maternity leave have protection from discrimination and are given special rights on their return to work and in redundancy situations. | The proposal is to give employees more protection from dismissal whilst pregnant, on maternity leave and within 6 months of their return to work. | This development won't have a huge impact on day to day business and people management. It does, however, mean that any performance management, disciplinary or redundancy situations that involve an employee who is pregnant, on maternity leave or has just returned will need to be handled with extra care. |
Trade union members currently need to meet minimum service levels to be able to strike. | Trade union reforms will include removing the minimum service levels and enhance the rights of union right of entry into the workplace. | The impact of this will be seen very widely in the public sector and heavily unionised industries meaning organisations will need to engage with unions more effectively to minimise disruption. |
Collective redundancy rules apply to redundancies of 20+ people at one establishment. | The "at one establishment" rule will be removed so the number of redundancies across all branches will be considered when establishing if collective redundancy consultation is required. | This means that if you have more than 1 branch or location, we have to consider potential redundancies across all locations when determining the consultation process we need to follow. |
Gender pay gap reporting is a current requirement for large organisations | The new bill will require large organisations to create a plan to address the gender pay gap. | This will require more strategic thinking about recruitment and retention strategies for larger organisations. Although SME's aren't required to report on this, it's worth thinking about as the labour market becomes more challenging. |
Bereavement leave - there is currently no statutory rule on bereavement leave unless it is parental bereavement leave. | The bill will create a new right to bereavement leave from day 1 of employment. | We don't yet know what the length of leave of pay requirements might be, however most companies already have a policy for bereavement leave in place so this shouldn't cause too much disruption. |
Employees currently need 1 years' service before they can take Parental Leave | This will become a day 1 right. | Not many employers or employees are aware of this right to unpaid time off each year to care for children. Employers will need to prepare for an influx of parental leave requests and ensure they have a solid procedure in place. |
Employees currently need to have 26 weeks' continuous service before they can receive Paternity Leav e/Pay | This will become a day 1 right. | Employers will need to update existing policies but I doubt it will have a massive impact as we're used to employees having this right. |
The right to request flexible working is currently a day 1 right for employees & employers can decline on one or more of 8 specific grounds. | Under new rules, flexible working will become the default and employers will have to show why it was reasonable to refuse the request in relation to the specified grounds. | This is going to make it much harder to decline requests, placing the onus for providing the business case for refusal onto the employer. Employers are going to have to put much more thought and reasoning into declining applications as well as setting up their businesses to be able to work flexibly. |
There is currently no requirement to mention trade unions in contracts of employment. | Contracts of employment will have to contain a trade union statement informing employees of their right to join a trade union. | This may lead to an increase of union memberships which means employers could see more union reps turning up at formal employee meetings, so you'll need to make sure all your HR processes are robust AF. |
Zero hours workers are currently not entitled to any notice or compensation for cancelled or changed shifts. | The bill proposes to introduce a right for zero hours workers to have reasonable notice of shift changes as well as compensation for shifts that are cancelled or ended early. Zero hours workers will also earn the right to a guaranteed hours contract after a defined period (probably 12 weeks) | I like the sentiment behind this move, but the reality is that it reduces the flexibility around utilising zero hours workers. Employers who are reliant on zero hours workers should start considering how they can restructure their workforce to suit business needs and give flexibility. |
These changes are not yet set in stone and are liable to change as the Bill is moved through parliament. Although we are not likely to see any changes come into force until 2026, it's worth taking steps to prepare for the changes throughout 2025. If you want to get a head start on preparing your business for the future, get in touch today.
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