The sweeping changes proposed by Labour’s Employment Rights Bill(ERB) have spurred a number of employers, employees, and even employment lawyers and HR professionals to raise questions and concerns as to how the ERB’s implementation will impact well-established and familiar practices.
Hotels, and leisure and hospitality businesses are likely to be some of the most impacted by the changes, as we see the flexibility employers in those spaces once enjoyed significantly constrained. While the government is still finalising the ERB, further proposed amendments were recently announced. This article highlights some of the key proposals of relevance to your business.
Zero-hours contracts and shift cancellation payments
One of the ERB's major changes concerns zero-hour and guaranteed hours contracts. Although the touted outright ban on zero-hour contracts did not materialise, the ERB effectively achieves at least a partial ban in practice by obliging employers to provide ’zero-hours’ workers with guaranteed hours. This requirement has now also been extended to agency workers.
Workers and agency workers on zero-hour and low-hour contracts who are qualifying workers under the ERB will have the right to be guaranteed a number of hours of work after the end of a reference period. This reference period is currently anticipated to be 12 weeks. An offer of guaranteed hours must reflect the hours worked during that reference period.
It is important to note that workers don’t need to accept guaranteed hours if they otherwise enjoy flexibility in their working hours, and so true zero-hours contracts are still permissible in that context.
The recently proposed amendments to the ERB attempt to water down the guaranteed hours requirements by changing the automatic duty on employers to offer guaranteed hours to a right for employees to request guaranteed hours. It also seeks to limit this right to workers working a minimum of 8 hours a week on average. These changes are not supported by the government so it’s likely that the original version of the ERB (creating a duty to offer guaranteed hours) will remain unchanged in that respect.
There is also an attempt to limit the requirement for employers to make a payment (of an amount TBC) to workers who have a shift cancelled or changed at short notice. As a reminder, the ERB gives workers a new right to receive reasonable notice of a shift, reasonable notice of any shift cancellation or change, and the right to be compensated for a shift that is cancelled or changed at short notice. The recently proposed amendments look to remove the obligation to make payment if notice of cancellation or change is given at least 48 hours in advance. Again, this change is not supported by the government and so is unlikely to pass. It remains to be seen how much the payment will be and when it will be triggered.
It has also been suggested that employers should be relieved of their duty to offer guaranteed hours where they are facing exceptional circumstances, but no further details have been given yet.
Restrictions on fire and re-hire
The original Dismissal and Re-Engagement provisions included in the ERB prevent employers from dismissing and seeking to re-engage employees in order to implement a contract change of any nature, unless the employer is facing significant financial difficulties.
The government has proposed some significant relaxations to this position, restricting the ‘ban’ to dismissals connected with the implementation of certain types of contractual changes: relating to pay, hours, time off, shift patterns, and pensions. There may be further additions to this list.
If an employee is dismissed and re-engaged to implement another type of contractual change, not included in the ‘banned’ list, then the dismissal will not be automatically unfair, but employers will still need to follow a fair process of consultation and be able to show that the dismissal was fair in the circumstances.
In another late addition, it will be automatically unfair for an employer to dismiss an employee in order to replace them with a contractor, agency worker, or other worker not employed by the employer if the replacement is going to do substantially the same work. There will be a narrow exception for employers facing financial difficulties affecting the business’ ability to carry on operating, if the dismissals couldn’t reasonably be avoided. These provisions will not bite in TUPE – outsourcing scenarios where the employees are transferred, and so not dismissed.
Bereavement loss for pre-24-week pregnancy
Earlier this year, the Women and Equalities Committee (WEC) made recommendations to extend parental bereavement leave and pay to those who experience pre-24-week pregnancy loss. Amendments to the current laws, which provide 2 weeks leave for parents who experience a still birth after 24 weeks of pregnancy, were initially tabled by the Chair of the WEC.
The government later announced that it recognised the need to support parents who experience pregnancy loss before 24 weeks and have followed through on this statement. The latest amendments would introduce a day-one right to at least one week of statutory bereavement leave for parents who experience pre-24-week pregnancy loss. This right to leave also applies to parents who experience unsuccessful IVF transfers.
Currently, this remains purely a right of leave, with no provisions indicating a right to pay during this period.
Ban on non-disclosure agreements (NDAs)
Significantly, the recent amendments include a ban on NDAs relating to harassment or discrimination. Clauses in settlement agreements preventing employees from disclosing allegations or information about discrimination or harassment will be void, allowing employees and former employees to speak freely about their experiences. Currently, for employers, one of the attractions of entering into a settlement agreement with an employee is to reach an understanding on confidentiality in relation to these types of issues.
It is proposed that the Secretary of State should have powers to introduce exceptions to this ban. These potential exceptions are yet to be announced, but practices in other jurisdictions such as Ireland include exceptions for NDAs that are requested by the employee, where that employee has received independent legal advice. It may be that the UK follows suit with similar provisions.
Consultation on tipping practices
No changes have been proposed to the tips provisions already included in the ERB, but we have included a reminder here on what it will look to implement on this front.
Under existing rules, employers are required to have a tips policy. Under the new rules, if implemented as expected, employers will be required to consult employees regarding their tip practices and review these practices regularly. Prior to producing or updating a tips policy, employers will be required to consult with the trade union representatives or worker representatives of staff who are likely to be affected by the policy. If no representatives are in place, employers are able to consult directly with employees regarding the tipping policies.
Existing tipping policies must also be reviewed at least every three years under the ERB, and employees (or trade union) must be consulted on the review. The three-year period commences on the date when the existing version of the policy came into effect.
Employers will also have a duty to share a summary of the feedback received during the consultation with all employees, on an anonymised basis.
When will we have some certainty?
The government has provided a roadmap indicating when certain provisions of the ERB will be implemented. Our ERB Timeline here provides a helpful run down on when we can expect to see these changes in action. There are still plenty of details to be ironed out before implementation. We will be tracking these and will provide further updates. Watch this space!
If you have any questions about these updates or any of the provisions under the Employment Rights Bill, our Employment team are here to assist.
This article was co-authored by Trainee Madeleine Gill.