Employment Rights Bill: A fundamental shift in workers’ rights

On 10 October 2024, the government presented its much-hyped Employment Rights Bill (the “Bill”) to parliament with Deputy Prime Minister Angela Rayner describing it as the “biggest upgrade to rights at work for a generation”.

The Bill comes at a time of heightened risk for the education sector. Many schools are exploring strategic options for saving costs and are either engaged in, or planning, workforce change processes.

So – how might the changes impact your approach to staffing strategy?

Within this review, we consider the key changes set out in the Bill, how and when they are likely to come into force and their potential impact.

The headline changes

Unfair dismissal

The Bill follows through on the government’s pledge to remove the qualifying period for unfair dismissal protection which, at present, is only afforded to employees after two years’ service. Once implemented, employees will have the right not to be unfairly dismissed from day one of their employment.

It will, however, be possible for employers to dismiss employees within the “initial period of employment” by following a modified, light-touch process, where the dismissal is shown to be for poor performance, misconduct, capability, or some other substantial reason relating to the employee. The specific nature of the modified process and the “initial period of employment” are yet to be clarified. It appears, however, that the government’s current intention is for the “initial period” to cover the first nine months of employment.

How might this impact schools? Currently, where an employee has less than two years’ service and there are concerns over their performance or conduct, the risks associated with a termination are usually reduced, affording some flexibility.

The Bill, as drafted, will remove this period of grace, further increasing the importance of schools operating comprehensive and effective recruitment and probation review processes. Schools will need to have a fair reason and follow a fair process to lawfully terminate employment, irrespective of length of service.

What constitutes a fair process will, however, be modified during the “initial period of employment”. Further detail is required, but the current suggestion is that the first nine months of employment will become significant.

Strengthening of trade unions

As expected, the Bill includes provisions aimed at strengthening trade union rights and removing “unnecessary restrictions on trade union activity”. These include:

• The repeal of legislation introduced under the previous government that served to restrict trade union activity
• A new right for unions to access workplaces in a regulated and responsible manner, enabling them to meet, represent and recruit potential members
• The simplification of the process for obtaining statutory union recognition, including a lower threshold for securing recognition
• A new requirement to provide a worker with a written statement of his or her right to join a trade union.

How might this impact schools? Independent schools have seen an increased level of trade union engagement over recent years, largely as a result of contentious consultations relating to TPS participation which have, in some cases, resulted in industrial action. We have also seen an increasing number of requests for trade union recognition.

It remains to be seen whether the changes set out in the Bill will result in a further increase in trade union engagement and activity within the sector. They will, however, strengthen trade union rights which may increase the likelihood of a robust response to workforce change proposals that are considered detrimental. The government’s plans will also make it easier for trade unions to secure statutory recognition.

Given many schools will be planning significant workforce change processes in response to financial pressures, the forthcoming changes in this area may serve to further embolden the unions to push for industrial action or recognition within the sector.

Restricting dismissal and reengagement

The practice of dismissing and re-engaging employees on revised terms and conditions – often referred to as ‘fire and rehire’ – has been the subject of considerable debate since the high-profile, mass-dismissal of hundreds of workers by P&O Ferries in 2022.

The government had previously committed to ending “fire and rehire”. The Bill doesn’t go that far, but it does significantly restrict its use to only limited circumstances where a business is in financial distress and there is genuinely no other alternative. Further detail on this limited exception will be subject to consultation.

How might this impact schools?

This change will be of particular interest to schools planning large-scale redundancy or restructuring exercises and, in the independent sector, consultations with teaching staff over proposed changes to pension arrangements.

Dismissal and reengagement is generally considered the safest legal route for implementing contractual changes where, following consultation, it has not been possible to reach agreement. The current Bill will restrict a school’s options for implementing changes they consider to be in the best interests of the school but are not essential to its viability as a going concern.

The reputational risks associated with dismissal and reengagement are also likely to increase given the government’s position, even in advance of any change coming into force. The unions are, unsurprisingly, referencing the government’s position where dismissal and reengagement is raised by a school as a possible consultation outcome.

Schools should ensure that they have engaged in meaningful consultation, explored and exhausted possible alternatives, and complied fully with the existing Code of Practice on dismissal and reengagement. Legal advice should be sought given the risks associated with this practice.

Zero-hours contracts

The Bill seeks to achieve the government’s stated aim of ending ‘exploitative’ zero-hours contracts, principally by introducing a new requirement to offer guaranteed hours to a zero-hours worker where they have worked regular hours over a defined period. The length of the defined period is not yet clear, but 12 weeks has been mentioned previously.

How might this impact schools? Schools typically make use of zero-hours contracts where the demand for work fluctuates, for example peripatetic music teachers or sports coaches, or where workers are required on an ad-hoc basis or for specific projects, such as exam invigilators. Although the government has moved away from imposing an outright ban on zero-hours contracts, the requirement to offer guaranteed hours will reduce the current level of flexibility which may result in increased labour costs, administration, and resourcing challenges.

Other changes

Other significant changes set out within the Bill include:

• Stronger rules on flexible working: Under the Bill, any refusal of a flexible working request must be reasonable. This is a change to the current position that only requires an employer to deal with an employee’s flexible working request in a “reasonable manner”
• Stronger laws on harassment: On 26 October 2024, a new duty will come into force requiring employers to take reasonable steps to prevent sexual workplace harassment. The Bill strengthens this requirement by requiring employers to take “all” reasonable steps and includes provision making employers liable, in certain circumstances, for the harassment of employees by third parties
• Statutory sick pay (SSP): The Bill removes the current waiting period for SSP, meaning that SSP will become payable from day one of sickness
• Day one family rights: The Bill removes the existing service requirements applicable to paternity and parental leave.

What’s missing?

The government has also published a ‘Next Steps’ document providing further detail on the Bill, as well as other aspects of its “New Deal for Working People” that sit outside of the Bill or are longer term priorities.

These include:

• Single worker status: Employment status in the UK is complex. Currently, individuals are either an employee, worker, or self-employed contractor. Employees benefit from the most employment rights and protections – and self-employed contractors have the least. The government’s aim is to create a singular ‘worker’ status for all staff, except those who are genuinely self-employed. This is not addressed in the Bill, but the ‘Next Steps’ document references the government’s intention to commence consultation. It is acknowledged, however, that this is a longer-term goal.
• Right to disconnect: The government intends to introduce a new Code of Practice, following consultation, on a right to disconnect from work outside of normal working hours. Consultation on this is expected to commence next year.

What happens next?

It is important to be clear that the Bill is not yet law. It will now pass through the various stages of Parliament and be subject to amendment and consultation. Whilst there is no definitive timeframe, the suggestion is that most reforms, including the change in unfair dismissal protection, will not take effect until 2026, with consultations commencing next year.

For those schools that are members of the Independent Schools’ Bursars Association (ISBA), we have produced an Employment Law Reform Tracker which is available in the ISBA Members Area and will be regularly updated. This article will also appear in the October 2024 edition of ISBA’s termly magazine, The Bursar’s Review.

How schools can prepare

For now, it is important that schools are aware of the potential for significant change in employment law. This review highlights a selection of the government’s key proposals, but there are others, including changes to the National Living Wage and ethnicity and disability pay gap reporting.

Schools should begin to reflect upon how these changes may impact their current working arrangements, policies and procedures. Specifically, schools may wish to:

• Review recruitment policies and processes and arrangements for probation reviews to ensure they are sufficiently rigorous in anticipation of a change in the law regarding unfair dismissal protection
• Audit current arrangements for zero-hours working. How many staff are subject to zero hours contracts and in which areas of the school? How might the requirement to offer guaranteed hours to zero-hours workers, in certain circumstances, impact those individuals and the school?
• Monitor changes to the law regarding dismissal and reengagement, in the context of strategic plans for workforce change. This may be particularly relevant, for example, to independent schools considering whether to consult with teachers over proposed changes to pension arrangements.
• Review existing internal arrangements for staff engagement, communication, and negotiation, given the plan to simplify the process for trade unions obtaining statutory recognition. Is there an internal staff forum or committee through which important issues are discussed? If not, is there an appetite for such a forum or committee? A survey may be helpful to understand staff preferences.