You know what they say, you wait forever for one amendment to the Employment Rights Bill and then they all come at once…

Linked to the consultation responses, many many updates to the Employment Rights Bill (‘ERB’) soon followed as the Bill progressed through the House of Commons report stage and third reading.  We studiously got to work wading through all 310 pages of amendments.  However, it appears that not all of the proposed amendments are government backed.  So, in a bid to provide some clarity and efficiency in the sea of change, in this update we’re focusing only on the key government backed changes to the ERB.

Statutory Sick Pay (‘SSP’)

The ERB makes SSP payable from the first day of sickness absence and will extend eligibility to employees earning below the Lower Earnings Limit (LEL) (currently £123, increasing to £125 in April), effectively scrapping the LEL for SSP purposes.  Eligible employees will now receive the lower of either:

• 80% of their average weekly earnings; or
• the flat weekly rate of £118.75.

This reflects the position in the government’s consultation response which aimed to strike a balance between providing financial security for employees who may previously have had to (to quote the government) “choose between health and wealth” and limiting additional costs to businesses.

Collective consultation and the protective award

We’ve previously updated you about the straightforward proposal to remove the concept of ‘establishments’ when considering if collective consultation is needed in redundancy situations.  The original plan would have meant that a company would always need to total up all of the proposed redundancies across the whole business, regardless of location. However, in this round of changes, the situation has become more complex.

It now seems that the current establishment principle will remain and, in addition, collective consultation will also be required where the “threshold” number of redundancies are proposed across more than one establishment.  Future Regulations will confirm what the threshold will be.  We believe the intention behind this amendment is to capture organisations proposing to make fewer than 20 redundancies at each establishment, but potentially make redundant a large proportion of their workforce when looked at as a whole.

In addition, the government has tabled an amendment which will see the protective award for failure to comply with collective consultation obligations double from 90 days to 180 days pay.  Therefore, the financial consequences for employers that fail to adhere to the requirements will be even more significant than before.  The government’s approach is to try and make it too expensive for employers not to comply with the rules.

In some good news, the proposals to allow employees to apply for interim relief in fire and rehire and collective redundancy scenarios are not being taken forward in the ERB.  Interim relief applications are often urgent, complex and costly to deal with.  This is therefore a positive development for employers.

Employment Tribunal time limits

As previously expected, employees will generally have six months (instead of the current three) to bring Employment Tribunal claims.  While measures are being put in place to try and address the Tribunal backlog, changes will need to be implemented quickly for the system to cope with the inevitable increase in claims, particularly when taken together with the inevitable increase in claims due to ‘day one’ rights.

Zero hours contracts

The major headline here is that the already very wide-ranging increased rights for zero hours and low hours workers will also apply to “qualifying agency workers”.  We assume that most agency workers will be captured by this definition, which will be confirmed in later Regulations.  However we do know that:

• The end hirer (i.e. the business engaging the agency worker) will need to make offers of guaranteed hours to qualifying agency workers
• Agency workers will also be entitled to reasonable notice of shifts and notice if a shift is moved, changed or curtailed. End hirers and agencies will share the responsibility for providing reasonable notice
• Agencies will be responsible for paying compensation to agency workers if they are not provided with the correct notice, regardless of whether they are at fault. However, the agency may be able to recoup the cost of the compensatory payment from the end hirer, depending on the terms of their commercial arrangement
• Agency workers will have broadly the same rights as employees and workers to bring an Employment Tribunal claim if the organisation they are engaged by does not comply with the duty to offer guaranteed hours and/or the reasonable notice requirements
• It may be possible to agree to avoid these obligations under the terms of a collective agreement

This extension of rights to agency workers is highly significant.  Typically, the very reason for businesses engaging agency workers rather than direct hires is the flexibility and ‘on/off’ nature of the relationship.  The proposed changes may significantly reduce the demand for agency workers overall, or will, at least, drive businesses to be much more careful in how those relationships are managed.

Trade Unions

The first draft of the Bill introduced a number of sweeping changes to Industrial Relations laws, seeking to turn back the clock on many years of reforms which had put barriers in the way of Trade Unions expanding their influence and taking industrial action.

The latest amendments are a mixed bag of watering down some of the changes, largely on a common sense basis, but introducing some further significant increases in union rights.  Key highlights are:

• The increased access to workplaces proposed originally has been expanded to include ‘digital’ access (e.g. the right to provide union updates via the company intranet) but sensibly restricted only to certified independent unions, and to exclude workplaces that are also a private dwelling;
• The original plan to reduce the notice needed to be given of industrial action from 14 to 7 days has been weakened, with a compromise position of 10 days notice adopted;
• The mandate duration for industrial action following a ballot will be increased from 6 months to 12, giving unions much wider scope to plan and implement industrial action without reballoting members.
• The requirements for what information a union needs to provide to employers in relation to ballots and notices will be simplified. The current requirements are detailed and technical, and it was not uncommon for unions to make a minor error by failing to provide the correct information, rendering a ballot ineffective.  These changes will result in employers having considerably less information about potential action, making it harder to plan for, and mitigate, the effects of industrial action.
• Employers will be prevented from changing numbers of employees within a bargaining unit once an application for statutory recognition has been made. This is designed to prevent employers flooding a proposed bargaining unit with new employees to dilute the level of union support.

Non-government backed amendments

As mentioned above, there are a raft of other proposed changes that are not currently ‘government backed’.  This means they are less likely to become part of the new legislation than the changes already discussed here.  However, for completeness (and in case you see these being mentioned elsewhere) the main ones are:

• A duty on employers to support their employees who are (or are suspected to be) victims of domestic abuse, including a statutory right to 10 days of domestic abuse victims’ leave
• Further enhanced family friendly provisions including making carer’s leave a paid entitlement, requiring employers to publish their parental leave and pay policies and introducing protected paternity or parental partner leave for all employees
• Requiring employers to protect workers from gender-based violence and harassment

We hope you find this overview helpful.  If you have any further questions regarding any of the proposed amendments and how these may affect your business, please do not hesitate to contact a member of our team.

As you’ll know if you’re a regular reader of our updates, our annual Employment Law Now Live series of events begin next week in London, Peterborough and Cambridge.  We will be hosting break out sessions where you’ll have a chance to speak with our team about the ERB changes and how you need to prepare for them.

There are still limited spaces available, click here for more information.  We hope to see you there!