Employment Edit: 31 October 2024

Employment Rights Bill – employer’s handbook

We will shortly be launching our employer’s handbook on the Employment Rights Bill and other proposed changes. This will be a go-to resource for employers to help you navigate the road ahead. In the handbook (which will be available to our mailing list and via our socials next week), we will look at each of the key proposed reforms and consider what they mean for employers.

In the meantime, for a recap of which of Labour’s proposals made it into the Bill and which were left out, why not check out our initial briefing below. If you would like to discuss how the Bill might impact your business, please contact Luke Bowery or your usual employment team contact.

Employment Rights Bill – consultations and call for evidence

The government has launched a call for evidence on the Employment Rights Bill, encouraging respondents to submit written evidence to the House of Commons Public Bill Committee as soon as possible. That Committee is expected to report to the House of Commons on 21 January 2025.

The government has also launched four consultations linked to several reforms contained in the Bill and the Next Steps to Make Work Pay document. The consultations are on:

• the remedies available in collective redundancy and fire and rehire cases;
• how the Employment Rights Bill reforms relating to zero hours workers (including the right to a guaranteed hours contract and reasonable notice of shifts) could apply to agency workers;
• a range of industrial relations reforms; and
• the percentage of average weekly earnings that should be used for the new rate of Statutory Sick Pay.

The first three consultations close on 2 December 2024, with the SSP consultation set to close on 4 December 2024.

Autumn Budget news

One of the headline points from yesterday’s Autumn Budget was the news that employer National Insurance contributions (NICs) will rise from 13.8% to 15% from 6 April 2025. From the same date, the threshold at which employers start paying NICs on a worker’s earnings will be lowered from £9,100 per year to £5,000 per year.

Ahead of the Budget, the government also announced increases to the National Minimum Wage. Based on recommendations from the Low Pay Commission, the rates include an increase to the rate for 18 to 20 year olds that narrows the gap between that and the National Living Wage (NLW) in anticipation of the plan for the NLW (which currently applies to those aged 21 and over) to be expanded in future years to apply to those aged 18 and over.

The new rates, which apply from 1 April 2025, will be:

• £12.21 per hour for workers aged 21 and over;
• £10.00 per hour for 18 to 20 year olds; and
• £7.55 per hour for 16 to 17 year olds and apprentices.

Acas sexual harassment guidance

Acas has updated its guidance on sexual harassment to reflect the new duty for employers to take reasonable steps to prevent sexual harassment of their workers, which came into force on 26 October 2024. You can read the updated Acas guidance here. For more information on the new duty and what it means for employers, check out our briefing below.

‘Fire and rehire’ compensation

The government has reinstated draft legislation to extend the power that tribunals have to award an uplift of compensation where an employer has unreasonably failed to comply with the Code of Practice on dismissal and re-engagement.

Since the Code came into force on 18 July 2024, tribunals have had the power to increase awards for certain employment tribunal claims (including unfair dismissal) by up to 25% where the employer unreasonably fails to comply with the Code. The previous government had intended to extend these powers to enable tribunals to order an uplift of the protective award that can be made where an employer has failed to comply with its collective consultation obligations. However, the relevant legislation did not make it through in time before Parliament was dissolved prior to the election.

Last week, the current government introduced draft legislation on this point, meaning that the power for tribunals to uplift protective awards is now expected to come into effect from 20 January 2025. Protective awards are capped at 90 days’ pay so, with a 25% uplift applied, these awards could equate to up to 112.5 days’ pay.