Navigating the Proposed Employment Rights Bill: What All Small Businesses Need to Know

The New Government has introduced its long anticipated Employment Rights Bill, which could bring significant changes to employment law. While these proposals are still subject to consultation and may take time to be implemented, it’s important for small business owners to stay ahead of the curve. In this newsletter, we’ll explore the key changes and offer practical tips on how to prepare.

Key Reforms and What They Mean for Your Business

1. Unfair Dismissal and Day One Right: Under the current law, employees need two years of continuous service to claim unfair dismissal. The proposed bill changes this, allowing employees to challenge dismissal from their first day on the job. This means as an employer, you’ll need to review your dismissal processes from the outset of employment.

Tip: Review and revise your onboarding and probationary policies. Clear, well communicated performance expectations and regular reviews during probation will help ensure both you and your new employee are aligned.

2. Fire and Rehire’ Practices: The bill aims to abolish ‘fire and rehire’ practices, where employers dismiss employees and rehire them under new terms. This will prevent businesses from easily changing contract terms, so pre-emptive planning is key.

Tip: If your business relies on flexibility in employment contracts, explore alternative ways to negotiate new terms, such as open dialogue and mutual agreements, rather than dismissal and rehiring.

3. New Day One Rights for Parental Leave: The bill introduces several new rights from day one of employment, including paternity leave, unpaid parental leave, and paid parental bereavement leave.

Tip: Prepare for more family friendly leave requests by planning how to maintain productivity during these periods. Start considering temporary cover options, flexible hours, or remote working setups.

Strengthening Family Friendly and Anti-Discrimination Rights

1. Flexible Working Requests: Employers will be required to grant flexible working requests automatically unless they can prove a practical reason not to.

Tip: Ensure that your team is equipped with remote working tools or flexible scheduling options to meet this new requirement. Document any potential operational barriers to justify decisions.

2. Gender Pay Gap Reporting: Large employers will need to take action to address the gender pay gap, with more accountability expected from the government.

Tip: If you have fewer than 250 employees, you may not need to report on the gender pay gap officially, but it’s still wise to conduct an internal review of your pay structures to identify potential imbalances early.

3. Menopause Support: For the first time, employers will need to offer support to employees experiencing the menopause.

Tip: Start by providing training for managers to increase awareness and consider introducing well being policies to support employees during this life stage.

Supporting Low-Paid Workers

7. Changes to Statutory Sick Pay (SSP): SSP will be payable from day one, rather than after three waiting days. This could increase the cost of absence for businesses, particularly during seasonal sickness or flu outbreaks.

 Tip: Budget for these changes in your workforce planning. Encouraging employees to take proactive measures to stay healthy and offering healthcare benefits could mitigate increased sick pay costs.

8. Minimum Wage Reforms: The bill proposes scrapping the different minimum wage rates for workers of different ages, meaning all low paid workers will fall under the same band of pay.

Tip: Review your payroll to assess how this change could impact your wage costs, especially if you currently employ younger workers at lower rates. Factor these changes into your future recruitment and budgeting strategies.

9. Zero-Hours Contracts: The Bill proposes changes to zero hours contracts, allowing workers with regular hours to request guaranteed hours. While this could improve job security for employees, some businesses may find it challenging to maintain the flexibility these contracts offer.

Tip: Monitor the hours of zero hours contract employees. If they consistently work similar hours, consider transitioning them to more stable part time or full time contracts to avoid complications down the line.

What Should You Do Next?

While the Employment Rights Bill is still in its early stages, small businesses should start planning ahead. Here are a few proactive steps to take now:

1. Stay Informed: The bill is likely to evolve, so keep an eye on updates as it moves through consultation and parliament. Consider subscribing to legal or HR newsletters for real time insights.
2. Audit Your Policies: Now is a good time to review your employment contracts, staff handbooks, and policies to identify areas where you may need to make changes.
3. Seek Advice: If you’re unsure how these proposals could impact your business, speak with an HR consultant or employment lawyer. They can help ensure your business is compliant and prepared for upcoming changes.

By staying proactive and adaptable, you can turn these legislative changes into opportunities to strengthen your business, support your team, and maintain compliance with new regulations.

If you’d like any advice on any of the above or a referral to a HR specialist of Employment Law solicitor don’t hesitate to contact me.