10 of the most asked questions about the Employment Rights Bill

Throughout 2024 there were a variety of proposed changes to Employment Law. The Employment Rights Bill, and the legislation updates that come along with it have been a cause for concern for many business owners and HR professionals. The Employment Rights Bill has 28 proposed reforms alone. Understandably, business owners are concerned, and are looking to understand how their organisations will be impacted, which has resulted in lots of employment law FAQ’s. 

To clarify what the new legislation actually means for businesses, and how business owners and HR professionals can prepare for the changes, we hosted an employment law webinar. Our most popular webinar sparked lots of questions from our attendees, so we wanted to dive a little deeper and answer some of the most pressing questions on everyone’s mind. 

Keep reading for more insights on The Employment Rights Bill, where our legal experts, Simon Obee and Amy Cunningham answer our top 10 most asked employment law FAQ’s. 

1. What are possible grounds for refusing a flexible working request? Will employers have to provide evidence of why it is not reasonable to the requester?

The proposed new laws will not change the possible grounds for refusing a flexible working request. The eight grounds for refusing a flexible working request remain the same. 

These are:

• the burden of additional costs
• detrimental effect on ability to meet customer demand
• inability to reorganise work among existing staff
• inability to recruit additional staff
• detrimental impact on quality
• detrimental impact on performance
• insufficiency of work during the periods the employee proposes to work
• planned structural changes

For more information, see paragraph 9 of the Acas Code, here:

What the Bill changes is to require a refusal of a flexible working request to be reasonable, rather than it being a  completely subjective test. In other words, the employer must act reasonably in deciding that the flexible working request cannot be agreed on one of the above grounds.

Employers are not required to provide evidence to justify their decision, but it can be helpful when explaining to an employee why a request cannot be agreed.

2. With Fire & Re-Hire bans in place, what recourse does a company have if employees refuse a new working pattern after consultation?

If an employee’s contract has been set up so that they work fixed hours with no discretion for the employer to vary those hours, and an employer needs to vary those hours, best practice will be to consult with the employee and get them to agree to vary their hours.

If the employee opts not to agree to the proposed variation, it will automatically be an unfair reason to terminate their employment for refusing to change their contract. The caveat to this is when an employer can show they are facing significant financial hardship and the change is needed to avoid bankruptcy.

We cannot see that there is any easy solution for an employer facing a situation where an employee will not agree to change their hours, which is why before these provisions come into effect it will be prudent for employers to review their current arrangements to ensure that their contractual terms allow for a reasonable amount of flexibility regarding changing hours, if the employer may need to adjust shift patterns in the future.

It may be that these provisions will be amended further as the Bill progresses through Parliament and we will of course keep you up to date with any developments.

3. Under new rules on zero-hours contracts, can employers offer a fixed-term contract with overtime paid for extra work?

There isn’t an automatic exclusion for employees on fixed-term contracts under the new provisions which deal with offering employees on zero hours contracts / low hours contracts a guaranteed number of hours. 

However, if the “reference period” over which the guaranteed hours are calculated is prescribed by Regulations as being 12 weeks, and an employee is engaged on a fixed-term contract for 10 weeks and then their employment ends, this will mean that there won’t be an obligation to offer them guaranteed hours at all (as they will not longer be an employee after the 12 week reference period).

Equally, it would be possible to put an arrangement in a fixed-term contract (or indeed, a permanent contract) whereby an employee was paid overtime for working more than their guaranteed hours. This would not avoid the need of offering them increased guaranteed hours if they worked more than their contractual hours, but an employee might well decline this offer if the alternative is to remain on a contract with a lower number of guaranteed hours, but the opportunity to be paid overtime when they work these additional hours.

Remember too that the obligation to increase guaranteed hours based on the reference period will only apply where the employee is on a zero hours contract or one where the employee is guaranteed hours below a set number of hours per week. For employees guaranteed hours above this number (which is still to be set) there will be no obligation to offer to increase their guaranteed hours, no matter how many hours they work.

See also comments below in relation to the potential use of fixed-term contracts for seasonal workers.

4. In seasonal businesses, it is usual for employers to have employees on a variable hours contract. How would a guaranteed hours contract affect our ability to increase and decrease hours seasonally?

This is one area of concern that many commentators have raised with the Bill, as it will obviously be a challenge to have to offer guaranteed hours in sectors affected by seasonal variations (retail, leisure, hospitality) where workers tend to work much longer hours at certain times of the year than in others.

If an employer has to offer guaranteed hours based on the employee’s hours during a busy seasonal period, this isn’t going to align with the number of hours an employer would ordinarily require the employee to work in a quieter period.

The Bill does seem to envisage that in some circumstances it will be possible to engage an employee on a fixed-term contract without guaranteed hours where it is reasonable to do so (which could feasibly cover seasonal workers), but the details in regards to this will be set out in Regulations so we will have to wait and see how this develops.

5. Will statutory sick pay (SSP) be paid from day 1 but still based on a 7 days absence? Or would an employee be paid SSP even though they were absent for 1 day for example?

Statutory sick pay (SSP) is currently paid from the fourth day of absence; an employee does not need to be absent for seven days to be entitled to SSP.

Going forward, the proposal is that SSP will be paid from the first day of absence. Employees won’t need to be off for 7 days in order to be paid SSP.

6. Are there any proposed changes to maternity leave?

The Employment Rights Bill will give the Government power to introduce regulations to prevent other dismissals (i.e. that are not redundancies) taking place during pregnancy, maternity leave or following return to work. The Bill also makes clear that this enhanced protection will apply to other family leave e.g. shared parental leave. Whilst the detail is still unclear, the explanatory notes to the Bill suggest that these changes will ban dismissals of women who are pregnant, on maternity leave, and during a six month return to work period, except in specific circumstances. We do not yet know what “specific circumstances” means.

7. Which provisions in the Bill relate to equality and inclusion?

The strengthening of flexible working obligations for employers obviously supports a level playing field being created for employees who have traditionally benefited from flexible working arrangements (parents, carers, people with a disability, etc).

The provisions of the Bill which will allow the government to make Regulations requiring employers with 250 or more employees to publish equality action plans (on gender pay gaps, support with employees who are going through the menopause or support for employees suffering from menstrual difficulties) are aimed at creating more equality for women in the workplace.

Similarly, given women are more likely to suffer from sexual harassment than men in the workplace, the provisions in the Bill that increase obligations regarding preventing sexual harassment will further gender equality in employment.

8. How should we consult staff about implementing the changes set out in the Bill?

We would say that best practice would be to consult with staff as early and as broadly as possible about any changes that may affect them, and to ensure that you consult with staff that are absent from the business too (for example those on family leave).

Consider that employees may have different working patterns and preferred methods of communication. They may not feel comfortable raising concerns in a group setting so think about different ways in which they can communicate with you (can you offer individual meetings if someone wants to discuss an issue and/or allow them to raise matters by phone or email?). Remember too that English may not be the first language of all of your employees so think about whether you need to distribute information in a way that will cater for this. Also encourage managers to discuss matters in team meetings and one-to-ones.

Employees are likely to feel supportive of any changes if they are told why the business is considering making changes, and if the employees are able to have a voice in decisions that impact the workforce.

9. Will the potential changes to flexible working and unfair dismissal rights apply to PAYE Agency Workers?

Agency workers employed directly by an employment agency (but who work in a “host” employer) cannot currently claim unfair dismissal against their host employer, but can of course claim it against the direct employer (ie the agency).

This will not change under the Employment Rights Bill. Agency workers will be able to claim unfair dismissal against their agency employer from day one of employment.

However, if the reason the agency needs to terminate their employment is because the host employer no longer requires them, this will generally provide a valid reason to terminate their employment and avoid a successful unfair dismissal claim, subject to the employment agency following the correct process prior to terminating the employment.

The potential changes to flexible working apply equally to employees of employment agencies – the fact that they are employed by an employment agency makes no difference.

10. What is the timeline for the Employment Rights Bill to come into effect?

The government has said the majority of the provisions will come into force in 2026, for unfair dismissal (only) they have said Autumn 2026. 

Given the government’s comments, we consider it is likely that there will be some staggering of the provisions coming into force.

Stay up to date with Employment Law changes with Employment Hero

Staying up to date with legislation is difficult for any business and it can often feel like a bit of a minefield. This is why we are trying to make staying compliant less daunting by answering your employment law FAQ’s. 

At Employment Hero we’ll be providing lots more blogs, guides and webinars as the Employment Rights Bill works its way through Parliament.  To get you started, take a look at our Detailed look at the Employment Rights Bill and A further breakdown of the Employment Rights Bill. 

If you’re still feeling confused about what the Employment Rights Bill means for your business, get in touch with one of our HR Advisors today.