The Employment Rights Bill introduced last week by the newly elected Labour government, stands to have a profound impact on employers. The bill, with its ambitious array of reforms, will significantly reshape the employment landscape.
The driving force behind the bill is laudably protecting workers from low pay and insecure employment, which is welcomed by groups supporting employees’ workplace rights. However, many employers are concerned that aspects of the bill will increase their regulatory load and exposure to employment tribunal claims. A particular concern for healthcare sector employers, is that it will reduce their flexibility to use casual workers to fill staffing gaps and cover peaks in activity.
In this article, we highlight the key provisions of the Employment Rights Bill and advise what measures employers in the healthcare sector can take in preparation.
One of the most significant proposals is the introduction of day one unfair dismissal rights. This will give employees the right to claim unfair dismissal from the very first day of their employment, a drastic shift from the current two-year qualifying period.
For healthcare employers, who commonly face high turnover rates, a workforce split across a disparate geographical area and complex staff management issues, this could pose challenges.
The silver lining (albeit a very thin one) is that the bill proposes introducing statutory probationary periods, with a nine-month window for employers to assess suitability and with greater flexibility to dismiss within that period. This change will also have a phased introduction, giving employers until autumn 2026 to prepare.
The bill proposes that workers on zero-hour contracts will have the right to request guaranteed hours, with a specific reference period being used to calculate those guaranteed hours. Employers will also be required to give reasonable notice for changes to shifts and provide compensation for last minute cancellations.
These proposals have the potential to increase costs and the administrative burden for healthcare businesses which rely on truly flexible staffing arrangements.
In the healthcare sector, particularly social care, zero hour and other casual work contracts are widely used to manage fluctuating patient needs - meeting the requirements to provide a 24/7 service, and perhaps move significantly, to fill critical gaps in rotas to address the ever increasing recruitment crisis in the sector.
The bill proposes to remove the current four-day waiting period so that SSP will be payable from the first day of illness, it will abolish the lower earnings threshold which previously excluded many low-paid workers from SSP entitlement.
Whilst this will offer crucial support to workers particularly in lower paid roles, it could have a financial impact on healthcare businesses already facing tight margins. Another concern is that payment of SSP from day one of absence, could increase employees taking ‘duvet days’ or ‘pulling a sickie’, ultimately leading to an increase in short term intermittent absences, which can be difficult to cover.
Another key reform is extending employer liability for third party harassment.
Employers will be required to take ‘all reasonable steps’ to prevent employee harassment by patients, visitors, or other third parties.
Given the nature of healthcare environments, staff are more likely to be exposed to potentially volatile situations, often involving members of the public, than employees in other sectors. Employers will therefore need to invest in comprehensive training and robust reporting mechanisms to mitigate these risks.
Throughout 2023, the healthcare sector experienced widespread industrial action, with workers in a variety of roles within both the public and private sectors striking over pay, working conditions and understaffing, amid soaring inflation and growing patient demand. This frustration is evident from the Royal College of Nursing supporting strike action by its members for the first time in their union’s century-long history.
The bill makes provision for large sections of the Trade Union Act 2016, together with the minimum service level legislation in its entirety, both of which were enacted by the previous government, to be repealed. The totality of the proposed changes will strengthen the power of trade unions and reduce employers’ ability to resist workers’ collective bargaining attempts.
Significantly, repealing the Strikes (Minimum Service Levels) Act 2023 removes the power employers had to require a minimum level of service is provided during a strike in six specific sectors, of which public health services was one.
As a result, employers in the sector may face more frequent strike action whilst also struggling to maintain continuity of care during industrial action.
Whilst the bill lays important groundwork, one of its prominent features is that it lacks detail in key areas.
The majority of the proposals will be subject to parliamentary debate and a variety of public consultations. Consultation will inevitably be time consuming and complex so it’s anticipated that the bill’s more radical flagship policies will not materialise until 2026 or later. It also leaves questions about whether all of the proposed reforms in the bill will actually materialise in their current form.
The bill certainly gives employers a lot to grapple with, but as the detail becomes clearer, there will be ample time to prepare and adapt.
In terms of practical steps to prepare now, there is little employers could, or should, currently do – it’s a ‘wait and see situation’. That being said, practical measures employers can take now is ensuring they have robust internal policies and that managers are trained on dealing with disciplinary and performance issues from the outset when taking on new hires.
For further information, please contact the employment team.
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