Employment Rights Bill: 10 key policies employers must revamp
Author: Zeba Sayed
The Employment Rights Bill packs 28 imposing employment law reforms into its 158 pages. While HR professionals await the substantive details needed to flesh out the Bill, we outline the key policies that you will need to update and an overview of what those updates might involve.
Although the Employment Rights Bill was published to much fanfare on 10 October 2024, HR professionals are essentially working with what is still just a framework.
Over the next year, the Government will engage in consultation with key stakeholders on a number of the proposed reforms. The outcome of these consultations will shape, or at least influence, the passage of the Bill.
That said, the legislative process does not end with the passing of the Bill. That is just the first step. To bring some of the legislation to life, the Government will need to introduce secondary legislation. Additionally, we expect to see updated guidance and codes of practice, which will help cut through the haze.
Granted, without all this extra detail, it is far too early for us to provide a definitive analysis on how to revamp your organisation's HR policies. Nevertheless, we know that employers are keen to make the most of the current breathing space to stay ahead.
1. Probation policy
What is changing?
The Bill introduces a new statutory probationary period during which employers can adopt a lighter-touch approach when dismissing employees.
What needs updating?
Any probation policy should be updated to set out:
- the length of the statutory probationary period;
- how performance will be managed during the statutory probationary period; and
- the lighter-touch dismissal procedure that will apply during this time.
Additionally, any disciplinary procedure and performance improvement procedure will need to be updated and/or cross-referenced with the probation policy to:
- ensure that they are all consistent; and
- reflect the different standards that apply to the dismissal procedure both during and after the statutory probationary period.
What is pending?
The Government will be consulting on:
- the length of the statutory probationary period;
- the full scope of the lighter-touch dismissal procedure; and
- how these reforms interact with the Acas code of practice on disciplinary and grievance procedures.
We are also awaiting regulations that will clarify how the lighter-touch dismissal process will work in practice.
Rest assured, the Government has confirmed that any change in this area will not happen before autumn 2026.
2. Onboarding policy
What is changing?
The two-year service requirement for unfair dismissal looks set to be removed, which means that employees will be able to claim ordinary unfair dismissal from the first day of their employment.
What needs updating?
This reform highlights the need to ensure that employees are effectively onboarded since a good onboarding experience can have a huge impact on retention. Any onboarding policy should be updated to ensure that it clearly explains:
- what the onboarding programme might cover;
- how the onboarding programme will be delivered; and
- any other initiatives to ensure the employee is given the best possible start in their role.
What is pending?
As mentioned above, the Government has confirmed that they will be consulting extensively on the unfair dismissal reforms and any change in this area will not take effect before autumn 2026.
3. Bereavement leave policy
What is changing?
The Bill introduces a new statutory right to bereavement leave, allowing all employees who lose a loved one to take leave from work.
What needs updating?
Any compassionate leave policy or bereavement leave policy will need to be updated to reflect the new statutory right to bereavement leave. The policy will need to explain:
- how much bereavement leave the employee is entitled to;
- that the leave is available to all employees from the first day of their employment;
- the specific relationship that the employee needs to have with the deceased to qualify for the right;
- the period of time within which the leave must be taken;
- the process for requesting leave; and
- that the leave will be unpaid (unless of course the employer decides to offer paid leave).
What is pending?
Additional regulations are expected to confirm:
- the length of leave (which is anticipated to be at least one week);
- the time frame for taking the leave;
- the specific criterial for determining who will be entitled to take bereavement leave; and
- details on how the leave can be taken.
The Government is preparing to consult on the detail to be outlined in the regulations in the coming year. With this in mind, any reform in this area is unlikely to be implemented before 2026.
4. Paternity leave policy
What is changing?
The Bill removes the qualifying periods for paternity leave, making it a day-one right. It also provides that the current restriction that prevents parents from taking paternity leave if they have already taken shared parental leave will be removed.
What needs updating?
Any paternity leave policy will need to be updated to ensure that:
- any reference to the requirement of being employed for 26 weeks (15 weeks before the expected week of childbirth) to qualify for the right to take paternity leave has been removed;
- it makes it clear that statutory paternity leave is available to all employees from the first day of their employment; and
- it provides that employees have the option to take paternity leave and pay after taking shared paternity leave and pay.
Additionally, any shared parental leave policy will need to be updated to ensure that it also provides that employees can take paternity leave and pay after shared paternity leave and pay.
What is pending?
The Government will be implementing changes to the paternity leave rules through regulations. Although no exact date has been confirmed yet, the Government's assurance that most reforms will not take effect before 2026 seems realistic.
5. Parental leave policy
What is changing?
The Employment Rights Bill removes the qualifying period of one year's service to be eligible to take parental leave, making it a day-one right.
What needs updating?
The parental leave policy will need to be updated to ensure that:
- any reference to the requirement of being employed for one year to qualify for the right to take parental leave has been removed; and
- it makes it clear that the right to take parental leave is available to all employees from the first day of their employment.
What is pending?
The Government will be implementing the change to the parental leave rules through regulations. Although no exact date has been confirmed yet, the Government's assurance that most reforms will not take effect before 2026 seems realistic.
6. Sickness absence policy
What is changing?
The Bill includes provisions to remove the requirement to earn at or above the lower earnings limit and the three-day waiting period to qualify for statutory sick pay.
As a result of this change, for some low-earners, including those earning below the lower-earnings limit, their rate of statutory sick pay will be calculated as a percentage of their earnings or based on a flat rate, whichever is lower.
What needs updating?
Any sickness absence policy will need to be updated to ensure that:
- any reference to the three-day waiting period and lower earnings limit has been removed;
- it explains that all employees are eligible to statutory sick pay from the first full day of their sickness absence (rather than the fourth); and
- it provides that all employees are entitled to statutory sick pay, regardless of their weekly earnings.
What is pending?
On 21 October 2024, the Government launched a consultation seeking views on the percentage replacement rate for those earning below the current rate of statutory sick pay. The consultation closed on 4 December 2024. The Government plans to introduce this percentage rate by means of an amendment to the Bill. It is unlikely that any change in this area will happen before 2026.
7. Redundancy policy
What is changing?
The Bill introduces an expanded obligation on employers to engage in collective consultation whenever they are proposing 20 or more redundancies within a period of 90 days. This means that the number of proposed redundancies will need to be counted across the entire organisation, not just at a single establishment.
What needs updating?
The redundancy policy will need to be updated to ensure that:
- any provision limiting collective consultation to 20 or more proposed redundancies within 90-day period at one establishment is removed;
- it clearly states that collective consultation will be conducted whenever 20 or more redundancies are proposed within a 90-day period across the entire organisation; and
- it reminds staff that, when assessing the need for collective consultation, proposed redundancies across a group of companies will not be counted (assuming each company within the group acts as a distinct employer).
What is pending?
On 21 October 2024, the Government launched a consultation to gather views on increasing the remedies for abusing the collective consultation rules. The consultation closed on 2 December 2024. Although no exact date has been confirmed, the implementation of these reforms is likely to take effect in 2026.
8. Anti-bullying and anti-harassment policy
What is changing?
The Bill imposes a duty on employers to take all reasonable steps to prevent sexual harassment from occurring in the workplace, instead of just reasonable steps.
Additionally, the Bill includes provisions that hold employers liable for third-party harassment if the employer fails to take all reasonable steps to prevent it. This liability is not just limited to sexual harassment, but extends to harassment on the grounds of:
- age;
- disability;
- gender reassignment;
- race;
- religion or belief;
- sex; and
- sexual orientation.
The term "third party" is defined as anyone other than the employer or a fellow employee.
What needs updating?
Any anti-bullying and anti-harassment policy will need to ensure that it:
- defines bullying and harassment and provides clear examples of what amounts to bullying and harassment;
- makes a firm commitment to taking proactive measures, such as providing training and undertaking risk assessments, to prevent all forms of bullying and harassment;
- includes a robust procedure for reporting and responding to complaints; and
- is extended so that it covers bullying and harassment by third parties.
What is pending?
The Government is anticipated to introduce new regulations that will define what amounts to "reasonable steps" to prevent harassment. These steps may include conducting assessments, publishing plans or policies, and other steps relating to the reporting of harassment and handling of complaints.
These regulations will require parliamentary approval, which is likely to take some time. It is unlikely that any change in this area will happen before 2026.
9. Flexible working policy
What is changing?
Under the Bill an employer will be able to refuse a flexible working request on one of the existing grounds only if it is reasonable to do so. Additionally, if the employer refuses a request, it must notify the employee of the ground for refusal and why the refusal is reasonable.
What needs updating?
Any flexible working policy will need to ensure that it:
- makes it clear that a request for flexible working will not be refused by the employer unless it is reasonable to do; and
- includes an obligation on the employer to provide written reasons for any refusal and why the refusal is considered to be reasonable.
What is pending?
There may be additional regulations that specify what steps an employer will need to take to consult with an employee prior to refusing a request.
If regulations are introduced, the Acas code of practice on requests for flexible working will also need to be updated. For this reason, it is unlikely that any change in this area will happen before 2026.
10. Varying terms and conditions policy
What is changing?
The Bill includes provisions to significantly limit the practice of dismissal and re-engagement (commonly referred to as "fire and rehire").
Under the Bill, a dismissal will be automatically unfair if the reason for the dismissal is because the employee refuses to accept changes to their contract or if the employer intends to employ another person under new terms to carry out substantially the same job.
There is a narrow exception for the employer if it can show evidence of financial difficulties and that the need for the change to contractual terms was unavoidable.
What needs updating?
Any varying terms and conditions policy or procedure will need to ensure that:
- it makes a firm commitment not to use fire and rehire practices unless there are financial difficulties that make it unavoidable; and
- it outlines a robust consultation process that is applicable in situations where fire and rehire practices are permitted.
What is pending?
On 21 October 2024, the Government launched a consultation to gather views on strengthening the penalties for abusing the rules on fire and rehire. The consultation closed on 2 December 2024.
The Government is expected to introduce new regulations, which will outline the consultation process employers must follow prior to firing and rehiring (in circumstances where it is permitted). Additionally, the existing code of practice on dismissal and re-engagement is likely to need substantial updates or be replaced in its entirety.
Given the scope of this work, the implementation of these reforms is unlikely to take effect until 2026.
