8 things SMEs need to know about the Employment Rights Bill

As an SME employer, the new Employment Rights Bill published on October 10, 2024, introduces several important changes that will impact how you manage your workforce. It will be a while before it comes into force – possibly not until October 2026. Here's a simplified overview of what you should know:

1. Unfair Dismissal: The two-year qualifying period for unfair dismissal claims will be removed. This means employees can claim unfair dismissal from day one. However, you’ll still be able to dismiss employees during their probation period, which is likely to be set at around nine months but not for redundancy. There will be a consultation on a new statutory probationary period and the process required to dismiss during the probation period.
2. Flexible Working: The Bill supposedly makes flexible working the default unless you can justify why it's unreasonable. There are likely to be more requests for things like remote work or adjusted hours, but you can still refuse them if you have valid business reasons and you explain why you think a refusal is reasonable.
3. Zero Hours Contracts: If you use zero-hours contracts or low hours contracts , employees who regularly work more hours than they're contracted for must be offered a new contract that guarantees those hours. The employee is also entitled to reasonable notice of a shift or cancellation of a shift or changes to a shift with an entitlement to payment if shifts are cancelled, moved or curtailed at short notice. As drafted, this does not apply to agency workers, so there might be a significant increase in the use of agency workers unless this loophole is closed.
4. Sick Pay: Statutory sick pay will be available to employees from day one of their employment, with no earnings threshold or waiting period. You’ll need to update your policies in due course to reflect this change.
5. Family-Friendly Leave: Paternity and parental leave will be available from day one, and there will be a new right to bereavement leave for all employees ( one week unless a child is lost when it’s 2 weeks ) .
6. Fire and Rehire: The Bill cracks down on the controversial practice of firing employees and rehiring them on worse terms. You'll need to show that the business is in dire straits financially , that firing and rehiring is essential and that you have followed a fair procedure including consultation. It will be a high bar to get over.
7. Trade Union Rights: If your business has union involvement, the Bill enhances unions' access to workplaces and makes it easier for them to represent employees. You’ll also need to ensure that new employees are informed of their right to join a union.
8. Harassment: You will be subject to a duty to take all reasonable steps to prevent sexual harassment of your employees and also to prevent any type of harassment by third parties ( e.g customers or clients  )

This Bill aims to balance protecting workers' rights while giving businesses the flexibility they need. You'll need to review your employment contracts, policies, and dismissal processes in due course to ensure they comply with these new rules.