It's all action stations on the Employment Rights Bill front!
Last week saw the publication of the implementation roadmap, and this week, amidst a flurry of press reports, we have some government amendments to the Bill which are not insignificant!
Whilst these amendments are not yet finalised, they're likely to pass given their government backing. So, what's new?
Fire and rehire
A brief recap, the Bill makes dismissals automatically unfair (with no qualifying service needed) if the reason or principal reason is:
- The employer sought to vary the employee's contract of employment and the employee did not agree to it; or
- To enable the employer to employ another person, or re-engage the employee, under a varied contract of employment to carry out substantially the same duties as the employee carried out before being dismissed.
As originally drafted, the nature or extent of the proposed variation was irrelevant, but now the government has limited the protection to a "restricted variation".
What constitutes a "restricted variation"? In essence anything relating to pay, hours and holidays and any additional matters specified by the Secretary of State via regulations.
Perhaps unsurprisingly, employers won't be able to circumvent fire and rehire provisions by inserting a variation clause into the contract of employment. However, existing variation clauses will continue to be valid.
What if the dismissal relates to a non-restricted variation? Employers won't automatically be in the clear. The Employment Rights Act 1996 (the ERA 1996) will be amended to require the employment tribunal to consider various factors, including: the reason for the variation; any consultation carried out with the employee (or appropriate representatives); what was offered to the employee in return for agreeing to the variation; and other matters specified by the Secretary of State via regulations.
There is an exception to the automatically unfair dismissal rule where:
- the variation was necessary to eliminate, prevent or significantly reduce, or significantly mitigate financial difficulties which at the time of the dismissal were affecting (or were likely in the immediate future to affect) the business as a going concern; and
- in all the circumstances, the employer could not reasonably have avoided the need for the variation.
Two new tests apply for:
- public sector bodies - the exception will apply if the employer faces financial difficulties that are likely in the immediate future to affect "the financial sustainability of carrying out the employer's statutory functions"; and
- local authorities - the exception will apply if financial difficulties have resulted in a "relevant intervention direction" relating to the financial management or governance of the authority.
Previously, employers could have dismissed employees and replaced them with non-employees. This loophole will be closed. Dismissals will be automatically unfair when the principal reason is replacing employees with non-employees (agency workers or contractors) carrying out substantially the same activities, unless it's a genuine redundancy situation.
Non-disclosure agreements
Non-disclosure agreements (NDAs) preventing workers from speaking out about harassment or discrimination will be void. The government press release states that if passed the new rule will mean that any confidentiality clauses in settlement agreements or other agreements will be null and void.
The rule also applies to disclosures about how the employer responded to allegations or disclosures of harassment or discrimination and applies to both current and former workers.
Regulations may extend protection to include contractors, trainees and those on work experience.
The protection will apply whether the alleged discrimination is by the employer or another worker, and the complainant can be the victim or another worker.
An NDA won't be void if contained in an "excepted agreement" satisfying regulatory conditions, but there is no detail on this yet.
It will be interesting to see how this will work in practice. This change may reduce an employer's appetite to enter settlement discussions without confidentiality guarantees, potentially leading to increased litigation of matters both parties might prefer to settle confidentially.
Extension of bereavement leave
Families experiencing pregnancy loss before 24 weeks will become entitled to protected bereavement leave. Currently, statutory parental bereavement leave only extends to parents who lose a child under 18 or experience stillbirth after 24 weeks of pregnancy. This amendment follows the government's earlier commitment to address bereavement leave for pregnancy loss during Commons debates.
Zero hours
There are new provisions setting out requirements for the terms and conditions of employment relating to pay that are proposed by a guaranteed hours offer made by a hirer to a qualifying agency worker. The Bill has been amended to provide for Conditions A, B, C and D. Provided that one of these conditions is met the requirements will be satisfied. The purpose behind the amendments is to ensure that the pay of agency workers cannot be eroded through a guaranteed hours offer compared to others.
Another suggested amendment provides that where a qualifying agency worker accepts a guaranteed hours offer from a hirer so that (respectively) they become a worker and an employer, there will not be a new initial reference period in relation to the former agency worker.
What's next?
The Bill is heading to Report stage in the House of Lords on 14, 16, 21 and 23 July. There will then be a third reading in the Lords before the Bill returns to the House of Commons for consideration of amendments before receiving Royal Assent.
Once we have more news we'll be in touch!
