The new Employment Rights Bill

The highly anticipated Employment Rights Bill was published in October 2024, and it sets out the new Government’s plans and its ambition to “make work pay” which is likely to come into force in 2026. The proposed changes to employment law will affect all businesses, but some of the proposals will have a greater impact on those sectors who require a more flexible workforce – notably the drinks and hospitality sectors.

Businesses in these sectors will be affected by the new restrictions on the use of zero hours contracts. 

We await the details of how the new restrictions on the use of zero hours contracts will work in practice and they are subject to consultation and further change. 

Whilst a ban on zero hours contracts isn’t yet taking place there are significant changes being proposed around working hours. 

A requirement to offer guaranteed hours for staff 

Employers will be required to make an offer of guaranteed hours to a qualifying worker at the end of every reference period which is expected to be 12 weeks. A qualifying worker will include workers who are engaged on a zero hours contract and those with a low number of guaranteed hours. 

We don’t yet know what amounts to “low hours” but the offer must reflect the hours worked during the reference period. 

There are going to be exceptions, so an offer of guaranteed hours can be on a fixed term basis due to periods of high demand or at busy times of the year. 

A worker who isn’t offered guaranteed hours may be able to bring a claim in the employment tribunal so it will be important to review future needs and plan accordingly. 

Rights to be given reasonable notice of shifts and changes to them 

All employers will be required to provide reasonable notice to workers of the shifts they will be working and changes to shifts. Reasonable notice will be dependent on the circumstances and employers will be obliged to compensate staff where changes are made at short notice and calculated in a way that is proportionate to the change. 

Businesses might more broadly need to review their own terms and conditions to reflect costs that they may incur due to customers cancelling and changing plans so that these costs can be recovered from them rather than incurred by the business. 

Businesses that have genuine changes in staffing needs from one day to the next, will find it harder to respond to and manage these employment changes. 

In situations where an offer of guaranteed hours is accepted, the worker will be entitled to be offered that level of work, whether it is available or not. Changes at short notice to working hours will come at a cost for some business owners and they may have too many staff and risk incurring significant costs where shift changes are needed at the last minute. 

Other considerations of the Bill 

Employers who want to make redundancies will in the future need to carefully manage the process as the right to claim unfair dismissal will apply from day one. Also, an employee will be considered to have been automatically unfairly dismissed if the principal reason for dismissal is because they previously accepted guaranteed hours. 

Businesses should start to prepare for how the changes will impact on them which may include: 

✓ Auditing your workforce and where you rely on zero hours workers. 

✓ Determine which of your workers would be entitled to an offer of guaranteed hours under the new rules. 

✓ Look at your business and where you have fluctuations in demand and whether you can use fixed term contracts to address this or agency workers as the new rules won’t apply to them now. 

✓ Review your approach and processes for managing of shifts and consider changes to customer contracts so that the cost of cancellations can be recovered. 

If you need help navigating the new employment bill and how it will change the management of your workforce, get in touch with our team.