Law and Labour

Employment Rights Bill update

Law and Labour — Sun, 23 Mar 2025 12:20:27 +0000

The Employment Rights Bill will bring sweeping changes to many areas of employment law once its provisions come into force. Its reforms will affect unfair dismissal, flexible working, statutory sick pay (SSP), family leave, fire and rehire, zero hours contracts and trade union law.

Between October and December 2024, the government consulted on four areas of the Bill: zero hours contracts, fire and rehire, trade unions and SSP. In March 2025, the government published its response to those consultations and also announced a series of amendments to the Bill.

The amendments include:

Zero hours contracts – the right to request contracts with guaranteed hours will apply to agency workers. Employers will have a duty to provide workers with a range of information about their right to guaranteed hours. Flexible working – there will be a new requirement for any refusal of a flexible working request on one of the statutory grounds to be reasonable. Employers will also have to explain their reason for refusal. SSP – low paid workers will no longer need to earn above the lower earnings limit to qualify for SSP. They will receive either 80% of their average weekly earnings or the current rate of SSP, whichever is lower. SSP will be payable from the first day of sickness absence. Workplace harassment – employers will have a duty to take all reasonable steps to prevent harassment of their employees by third parties. Employers could face civil claims for harassment where they have failed to take such steps. Redundancy collective consultation – the maximum period of the protective award will increase from 90 days to 180 days. Trade unions – there will be a series of changes to trade union and strike rules, such as changing the current notice period for industrial action from 7 to 10 days. Industrial action mandates will expire after 12 months instead of after 6 months.

We continue to monitor for further amendments.

Photograph: “people-400818_1280”.

Employment Rights Bill introduced

Law and Labour — Tue, 22 Oct 2024 14:31:05 +0000

On 10 October 2024, a new Employment Rights Bill (the “Bill“) was introduced into the House of Commons. The Bill contains a suite of provisions covering a wide range of employment rights. The Government has announced its intention to consult on the changes proposed in the Bill with the expectation that most of its reforms will not take effect before 2026. It is hoped that will give businesses sufficient time to prepare for the changes.

The Government has published 10 factsheets that provide further details of the measures included in the Bill. The factsheets cover:

zero hours contracts; unfair dismissal; trade unions; statutory sick pay; school support staff negotiating body; fire and rehire; the Fair Work Agency; bereavement leave, paternity leave and unpaid parental leave; the adult social care negotiating body; and the Employment Rights Bill overview.

Each factsheet typically sets out the current legal framework applicable to a particular employment right. It then describes the Government’s aims for the proposed changes and briefly describes the proposals.

The table below summarises some key proposals as described in the relevant factsheet:

Zero hours contracts Employers will be required to offer qualifying workers guaranteed hours reflecting the hours worked during a 12-week reference period. A qualifying worker may elect to reject an offer of guaranteed hours and instead remain on their current contract. Employers will be required to provide qualifying workers with reasonable notice of shifts and changes to these. If an employer cancels, moves or curtails a shift at short notice, they will be required to pay the affected workers. Unfair dismissal Employees will automatically have protection from unfair dismissal from the first day of employment, subject to a statutory probation period. The statutory probation period will last for nine months during which a “lighter touch” dismissal process will apply. The right to written reasons for dismissal will apply once the statutory probation period has concluded. Fire and rehire Where employees are dismissed for failing to agree to a change in their employment contract, the dismissal will be automatically unfair. It will also be unfair to dismiss an employee in order to replace them or to re-engage them on varied contractual terms. The employer may have a defence to such a dismissal if it can show: the business was facing financial difficulties that affected its viability; the contractual variations proposed were to eliminate, prevent or mitigate the effects of such difficulties; and changing the contract was unavoidable. The employer is required to act fairly in making the dismissal, which must be fair in all the circumstances. Family-related leave Bereavement leave will become a new, day one right. Employees may take at least one week’s leave within a 56-day period. There will no longer be any qualifying period for the right to take paternity leave or unpaid parental leave. Employees will no longer have to take paternity leave prior taking shared parental leave. Fair Work Agency (FWA) A new advisory body on employment rights, called the Fair Work Agency, will be set up. The FWA will also have the remit to investigate and take enforcement action for breaches of employment law. The FWA will be an offshoot of the Department of Business and Trade, with its functions [...]

Employment rights get an uplift from new Labour Government

Law and Labour — Thu, 18 Jul 2024 15:21:53 +0000

One of the key elements of the Labour Party’s manifesto for the 2024 general election was its “Plan to Make Work Pay”. Among the promises in the Plan were that the Party, if elected, would deliver a “genuine living wage”, ban “exploitative zero hours contracts” and end fire and rehire practices. In Labour’s first King’s Speech since being elected to government, it sought to make good on those promises.

The government plans to introduce significant changes to some key areas of employment law, primarily through the new Employment Rights Bill. The content of the Bill is not yet known, but a briefing note from the government sets out the main proposals.

They are to:

make parental leave, sick pay and protection from unfair dismissal “day 1 rights”, subject to probationary periods; ban zero hours contracts; end fire and rehire and fire and replace practices; strengthen statutory sick pay by removing the three-day waiting period and the lower earnings limit; make flexible working a day 1 right; make it unlawful to dismiss a woman within 6 months of her return to work from maternity leave, except in specific circumstances; establish a new body called the Fair Work Agency to aid in the enforcement of workplace rights; establish a Fair Pay Agreement in the adult social care sector; reinstate the School Support Staff Negotiating Body; remove certain restrictions on trade union activity, including minimum service levels; and simplify the route to statutory recognition.

The government says these changes will be introduced within its first 100 days of taking office, so the draft bill is anticipated shortly. The bill will apply to England, Scotland and Wales.

In addition, the government also announced a new Equality (Race and Disability) Bill which intends to “enshrine the full right to equal pay in law” for persons from ethnic minorities and disabled persons. This bill proposes mandatory ethnicity and disability pay gap reporting. We await further details as to how such reporting will work in practice.

Photograph: “Pedestrians” by Pixabay user Brian Merrill used under Pixabay content licence

Part-year workers’ holiday need not be pro-rated to full-time workers

Law and Labour — Wed, 17 Aug 2022 15:04:04 +0000

Facts

Ms Brazel works as a music teacher for the Harpur Trust. She is employed under a permanent contract and only works during term time. Her hours of work depend on the number of pupils requiring tuition. Ms Brazel is contractually entitled to 5.6 weeks’ holiday, but the contract does not expressly state that her holiday entitlement should be pro-rated.

The Trust pay Ms Brazel on a monthly basis according to the number of hours worked in the previous month, but she is paid her holiday pay at the end of every term. When calculating Ms Brazel’s holiday pay, the Trust followed Acas guidance on casual workers which, at the time, recommended using the rate of 12.07% per hour worked (the “Percentage Method”). Ms Brazel argued that was not the correct calculation under the Working Time Regulations 1998 (“WTR”). She disagreed that her holiday pay should be pro-rated simply because she did not work a full year.

Ms Brazel’s claim for unlawful deduction of wages failed in the Employment Tribunal, but her appeal to the Employment Appeal Tribunal was successful. The Trust appealed to the Court of Appeal which dismissed the appeal. The Trust then appealed to the Supreme Court.

Supreme Court

The question for the Supreme Court to decide was, by which method should Ms Brazel’s payments for annual leave be calculated? This raised an important issue about the statutory leave requirement for “part-year workers” – permanent workers who work for varying hours during only certain weeks of the year.

The Trust put forward various methods for calculating holiday pay, including the Percentage Method and the “Worked Year Method”. The latter method takes account of the fact that Ms Brazel does not work during school holidays. It uses the number of weeks she actually works (34 weeks) to calculate a percentage of the full working year (46.4 weeks). That percentage is then applied to the annual leave entitlement applicable to the full working year.

The Supreme Court found that these alternative methods were problematic. Firstly, they were very different from the statutory method set out in the WTR. Secondly, the calculations were very complicated. The Court noted that the statutory scheme could produce odd results but that does not justify wholesale revision of the scheme.

Importantly, the Supreme Court decided that the “Calendar Week Method” represents the correct implementation of the WTR and is fully compliant with EU law. Ms Brazel is entitled to 5.6 weeks’ paid leave which is taken in 3 equal tranches during the winter, spring and summer school holidays. This means that 1.87 weeks of each school holiday was treated as annual leave for which Ms Brazel was entitled to be paid. Under the Calendar Week Method, Ms Brazel’s holiday pay is calculated by first determining a week’s pay – her average weekly remuneration during the previous 12 weeks – and that figure is then multiplied by 1.87 to get the holiday pay she is due for the 1.87 weeks’ leave she took during each school holiday.

The Supreme Court held that even if the [...]

P&O Ferries: was firing 800 staff unlawful?

Law and Labour — Sat, 19 Mar 2022 10:54:57 +0000

On 17 March 2022, the management of P&O Ferries announced by video call to 800 workers that their employment was to be terminated with immediate effect. Many are stunned that a major British employer could fire so many employees at will. However, there are potential legal consequences to P&O Ferries’ actions.

Under UK employment law, an employer needs a fair reason in order to dismiss an employee. It is unclear what reason P&O is likely to rely upon to justify the sackings. The company reportedly said the sackings were necessary “to reduce our crewing costs by 50 per cent, secure the future of our business and set it up for growth”.

One reason P&O Ferries might rely on is redundancy. This reason is appropriate where dismissal is due to a need to reduce headcount. However, P&O Ferries could struggle to prove that this was a genuine redundancy situation. It does not appear that staff numbers are being reduced; the main motivation appears to be reduction of staffing costs.

Alternatively, P&O Ferries could rely on the catch-all category of “some other substantial reason” (SOSR). This reason is typically used by employers where the reason for dismissal does not align neatly with one of the other legally accepted reasons for dismissal.

Whatever reason is chosen an employer must follow a fair procedure when dismissing staff. The appropriate procedure to follow depends on the reason for dismissal. With either redundancy or SOSR, a fair process involves consulting with employees prior to their dismissal. Given the swift manner in which the dismissals took place, no form of consultation seems to have occurred.

Without a fair reason or a fair procedure being followed prior to dismissal, P&O Ferries may find itself facing claims of unfair dismissal in the employment tribunal. However, those are not the only claims it could potentially face.

Where 100 employees or more are facing dismissal, an employer is legally required to take certain steps under collective consultation legislation. These include consulting collectively with employees at least 45 days before the date of the first dismissal. The penalty for not engaging in collective consultation is a protective award for each employee of up to 90 days’ gross pay. This is one of the most expensive liabilities an employer may face in employment law.

Another requirement is the need to notify the Secretary of State of the Department for Business, Energy and Industrial Strategy (BEIS) of the planned dismissals. The notification must be sent to BEIS at least 45 days before the first dismissal. Failure to do so is a criminal offence punishable by a fine. According to reports, the Government only learnt of the planned dismissals the night before the P&O Ferries announcement. The company’s directors could face criminal proceedings for failing to comply with the collective consultation obligations.

According to reports, P&O Ferries has offered its employees severance packages containing enhanced redundancy payments. These are likely being offered as a means of staving off claims for unfair dismissal and failure to carry out collective consultation. However, the company cannot dispel the potential criminal charges the company [...]