Talking Employment Law: The Employment Rights Bill – Part 2

In October 2024, the Government unveiled its Employment Rights Bill which is currently making its way through Parliament to become law. This Bill introduces major reforms to workers’ rights.

In part 2 of the Employment Rights Bill podcast in the ‘Talking Employment Law’ series, Louise Keenan and Melanie Pimenta, members of the employment team at Clarkslegal, will discuss some of the main provisions of the Bill, including:

• Changes to collective redundancies
• Flexible working
• Sick pay

Please contact our employment team if your business needs help with any of these proposed changes. It’s important to seek advice and plan for the changes now to be ready when they come into force.

The Employment Rights Bill Podcast Series

 Part 1.  Unfair dismissal and family rights 

Transcript

Louise Keenen: 00:05

Welcome. In October 2024, the Government unveiled its Employment Rights Bill which is currently making its way through Parliament to become law.  This Bill introduces major reforms to workers’ rights.

This podcast is part of a series of podcasts which will be discussing some of the main provisions of the Bill. 

We previously discussed the government’s proposals with regard to unfair dismissal and family rights and in this podcast, we will be discussing changes to collective redundancies, flexible working and sick pay.

My name is Louise Keenan, I am an Associate in the employment team at Clarkslegal and this is Melanie Pimenta who is also an Associate at Clarkslegal. 

It’s important to first highlight that as this is a Bill, it is subject to change and so the provisions we’ll be discussing may be amended as it makes its passage through parliament.

Melanie Pimenta: 00:57

Yes, so let’s start with redundancies. Currently, if an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, it must collectively consult on its proposal. This involves consultation with representatives of the affected employees, as well as with the employees themselves individually.

The collective consultation process must begin in good time, which is at least 45 days prior to the first dismissals taking effect where 100 or more redundancies are proposed, or at least 30 days before, where fewer than 100 redundancies are being proposed. Employers also have a duty to notify the Secretary of State of its proposals, in line with these timeframes.

Failure to comply with these obligations can result in a protective award of up to 90 days' gross pay per affected employee. Additionally, failing to notify the Secretary of State is a criminal offense.
 
Louise Keenen: 01:59

That’s right, but the Employment Rights Bill is proposing a few changes to this process.  In particular, it is proposing to remove the words ‘at one establishment’ so that the collective redundancy threshold will be based on the whole workforce and not just one establishment. The duty to notify the Secretary of State would also no longer be subject to the proposal being at ‘one establishment’.   

Melanie Pimenta: 02:24

Yeah, this is a really big change isn’t it and one I know we have already had clients asking about and trying to plan for.

Louise Keenen: 02:31

It is a big change, it’s going to have a significant impact on businesses that operate across multiple sites because currently, employers can focus on particular sites and the numbers impacted at these sites. However, going forward, the obligation to collectively consult for multi-site organizations could be triggered more easily.

Melanie Pimenta: 02:52

Yes, it’s going to be a difficult one for some businesses to manage because they are going to need effective mechanisms in place to identify where and when redundancies are happening in the business. 
 
Louise Keenen: 03:04

Yeah, lots of companies manage redundancies at different sites locally and they’re going to have to have a more central system to keep track of what is happening at various locations so that they are aware if the collective consultation thresholds have been reached.   
 
Melanie Pimenta: 03:24

The bill is also seeking to increase the protective award available to 180 days’ pay instead of 90 days.   

Louise Keenen: 03:32

Yes, they talked about possibly removing it entirely didn’t they but appear to have decided against that.
 
Melanie Pimenta: 03:38

Yes, the government has said they felt doubling the limit instead was more proportionate. The policy intent behind increasing the award, is to make it more difficult for the small number of employers who ignore their collective redundancy obligations.

Louise Keenen: 03:54

Yeah, because the government says doesn’t it, that most do comply with their obligations but, it used statistics from 2022/23 to highlight that there are still some that don’t.  Those stats showed that Employment Tribunals received 5,026 cases in that year of employers failing to inform and consult on redundancies.
 
Melanie Pimenta: 04:16

Successful cases?

Louise Keenen: 04:18

Well, no.  That’s what I find interesting about the government stats, these are just the number of cases where claimants have alleged a failure but there’s no stats provided on how many claims actually resulted in a finding against the employer.  So, the stats are not as conclusive there as people may think.

But I think ultimately, it’s got to be more of an incentive to do the right thing, if the penalty for not doing it is more than what it would have cost you to go through the correct process.
 
Melanie Pimenta: 04:46 

Yeah absolutely.
 
Louise Keenen: 04:48

I do think, because of the removal of the ‘one establishment’ requirement, we may well have generally good employers who inadvertently breach the rules because they don’t have a good enough system in place to track redundancies across sites and this is what larger multi-site employers now have to be looking at. 
 
Melanie Pimenta: 05:08

Yeah, and before we move on it is also worth highlighting that, whilst, not in the Bill itself, the government has also suggested that it will consult on the possibility of increasing the minimum consultation period, from 45 to 90 days, where more than 100 redundancies are being proposed
 
Louise Keenen: 05:26

Yeah, it’s interesting because this is essentially reverting to the position that we were in, in 2012, when a 90-day period applied.  Going back to that time, there were lots of arguments in favour of shortening the timeframe.  You know, it was considered that it was too onerous for businesses,  that shortening the process could reduce costs, thereby potentially saving other jobs and also that it was too long a period and that often all matters had been addressed well within the 90-day period.  So, I think it’ll be interesting to review any new evidence and arguments in the Government’s proposal when we have more details of this to see what has changed and why a longer period is now considered to be the better approach, if that’s what the government decides.

Melanie Pimenta: 06:13
 
Okay, so now, let's look at flexible working. Currently, the law allows all employees to make up to two flexible working requests a year from day one of their employment.

Flexible working may involve a change to hours of work, change to working arrangements or a change to a place of work. Employers need to deal with requests in a reasonable manner and can only refuse on one of eight statutory grounds.

The Employment Rights Bill proposes to make flexible working the default position.  Employers can still reject the request on one of the eight existing grounds but under the new bill there is a requirement that it be “reasonable for the employer to refuse the application on that ground”.  The employer will need to explain their decision and why they believe it is reasonable to the employee.

The Bill also provides that the Secretary of State may set out further regulations that employers must follow to demonstrate compliance with the requirement to consult the employee before refusing a request.
 
Louise Keenen: 07:18

Yes, although in reality, it is unclear how much impact this change will have. 

Melanie Pimenta: 07:25

Yes, I agree because employers are already required to deal with requests in a reasonable manner and the ACAS Code of practice on requests for flexible working already provides that consultation should take place with the employee before a request is refused and provides some clarification on what this should entail.  It also says that clear communication about the reasoning for refusal can help establish understanding and trust that the request has been handled reasonably.
 
Louise Keenen: 07:53

Exactly, so most employers will already act reasonably when seeking to refuse a request, consult with the employee and provide clear reasons for its decision.  So the Bill may provide some clarity about what is needed here but it seems unlikely to significantly impact organisations that already follow best practice although businesses will need to check their written policies and may need to amend these to more clearly reference the statutory process.

Melanie Pimenta: 08:21

Yes agreed. So, finally, let’s touch on sick pay.
 
Louise Keenen: 08:25

Yes, this is the proposal for employees to be eligible for statutory sick pay from day one of sickness, rather than having to wait until day four for this to kick in.

Melanie Pimenta: 08:34

Yes, and the lower earnings limit will be removed, making all employees eligible for this.  So there will be increased obligations on employers to pay SSP.

The Government has said that the current system forces people to work when they are unwell, which can lead to spreading infectious diseases at work, worse long term health outcomes, and lower productivity for businesses. So that’s the rationale for making the change.
 
Louise Keenen: 09:03

Yes, some businesses particularly small and medium sized businesses may struggle with this added cost as SSP cannot generally be claimed back by employers (unlike other forms of statutory pay) and so it’s another cost for business.
 
Melanie Pimenta: 09:18

Yes, on top of things like national insurance increases and increases to national minimum wage that we’ve seen lately.
 
Louise Keenen: 09:26

Exactly.   

Melanie Pimenta: 09:28

So that brings us to the end of this podcast. If your business needs help with any of these proposed changes, please do let us know. It's important to seek advice and plan for the changes now so you are ready when they come into force.

Thank you for listening, and please check our Clarkslegal and Employment Buddy websites for updates.