Employment Rights Bill and White Paper: Key Updates

Last week, we saw several developments regarding the proposed reforms to employment law. First, the White Paper was published on Tuesday 26 November 2024, outlining the government’s proposals to tackle economic inactivity and support people into work. You can find the link to the White Paper here: Get Britain Working White Paper - GOV.UK. It certainly makes for interesting reading!

Key Points of the White Paper

The White Paper outlines policies to support the 2.8 million people the government describes as “locked out of work due to long-term sickness.” Even for those in work, there has been a decline in health, with a staggering increase of 300,000 people over the past year reporting a health condition that limits their ability to work. Mental health is now the “leading health condition among those aged 44 and younger.” Ill health also impacts the employment prospects of those who provide unpaid care.

The government’s long-term goal is to achieve an 80% employment rate for the UK.

Focus on Retaining Workers with Health Conditions

The White Paper emphasises the importance of keeping people in work for longer, particularly those with health conditions or disabilities, to prevent them from becoming economically inactive. An independent review will be led by someone with strong business experience, supported by a group of experts in the field, to consider what more can be done to:

• Increase the recruitment and retention of disabled people and those with health conditions, including through the new jobs and careers service.
• Prevent people from becoming unwell at work and promote healthy workplaces.
• Undertake early intervention for sickness absence and increase returns to work.

The review will run until Summer 2025 and involve employers, employees, trade unions, health experts, and disabled people with health conditions. The aim is to complement the government’s Make Work Pay reforms, which tackle job insecurity and expand flexible working. It will be an evidence-based review, producing practical recommendations to support employers.

Green Paper and Future Developments

With an expectation to encourage people to remain in work, a Green Paper will be brought forward in Spring 2025. The government will engage with disabled people to assist in the development of reforms in this area, alongside proposed changes to the employment support system.

Supporting Businesses and Workers

The government emphasises the benefits for individuals in having a job – giving them a sense of “purpose, value, and control.” To assist businesses, the government wants to focus on increasing the amount of skilled labour, noting that 35% of current vacancies are due to skills shortages. However, UK employers invest half as much per employee in training compared to the EU average, with investment in training falling by nearly 20% since 2011.

In 2022/2023, an estimated 35.2 million working days were lost due to work-related illness and non-fatal workplace injuries in Great Britain. Musculoskeletal conditions made up around a quarter of all self-reported cases, while work-related stress, depression, and anxiety accounted for around half of all cases.

Local “Get Britain Working Plans”

All areas in England will be given resources to produce a local “Get Britain Working Plan.” The government has said that the thinking behind these plans was informed by the 1,900 responses to the Fit Note Call for Evidence, which includes insights from employers, healthcare professionals, and patients about the role of the Fit Note process in supporting people to stay in work while managing their healthcare condition.

Encouraging employers to be more inclusive in their recruitment policies related to disability, health, and wellbeing, protecting the health of existing workers, and supporting retention and rehabilitation for disabled employees and those with health conditions are key objectives.

With the government’s Youth Guarantee in England – ensuring every young person aged 18-21 has access to further learning, help to get a job, or an apprenticeship – the government plans to transform the Apprenticeship Levy into a more flexible Growth and Skills Levy. This change will give employers more flexibility to ensure apprenticeships focus on the skills needed by businesses and, where possible, offer shorter apprenticeships.

Employment Rights Bill

An Amendment Paper was published by the House of Commons on 27 November 2024. The bill is currently being scrutinised by the Public Bill Committee, which will report to the House of Commons by 21 January 2025. The paper runs to 53 pages. The biggest amendment proposed is to increase the time limit for bringing a tribunal claim to six months. This change is not limited to unfair dismissal claims but extends to all tribunal claims. The amendment has been tabled by employment rights minister Justin Madders and is likely to be accepted, despite not appearing in the text of the bill because it was mentioned in Labour’s pre-election Green Paper on workers' rights – New Deal for Working People.

Day-One Right for Unfair Dismissal Claims

Regarding the day-one right for unfair dismissal claims, the “initial period of employment” is now said to be between three and nine months. This will allow for a lighter touch process for employers to consider a termination of employment.

Non-Disclosure Agreements and Substitution Clauses

Non-disclosure agreements that prevent workers from making disclosures about sexual or other forms of harassment would also be void if the amendment included in the paper is accepted. A prohibition on the use of substitution clauses in agreements between an employer or contractor of services and an employee, worker, or dependent contractor has also been proposed.

Amendments to Guaranteed Hours and Shift Cancellations

Additional amendments to the process of offering and withdrawing guaranteed hours have also been proposed, with more changes expected regarding payments to be made if shifts are cancelled, moved, or curtailed at short notice.

Regulatory Policy Committee’s Report

Interestingly, the Regulatory Policy Committee (RPC), an independent body that scrutinises government policy decisions, published its report on 25 November. The RPC concluded that eight of the impact assessments, including those related to unfair dismissal rights, flexible working, guaranteed hours, harassment by third parties, fire and rehire, and the repeal of the Trade Union Act 2016 and MSL Act 2023, were “not fit for purpose.” The RPC considered them based on insufficient evidence, flawed rationales, and inadequate analysis of the impact on small and micro businesses.

For example, regarding flexible working requests, the RPC found that there was little evidence of employers unreasonably rejecting requests and questioned the rationale for such changes. It recommended further analysis and evidence to be produced. For many businesses, the RPC’s conclusions reflect concerns that the burden of these reforms could negatively impact the job stability that the government aims to protect.

Conclusion

In conclusion, the position is one of change, and as more developments occur, we will keep you updated. If you have any questions in the meantime, please get in touch with me or any member of the BLHR & Employment Team, and we will be happy to assist you.