Employment Rights Bill- A Direct payments guide to potential changes

 

Employers and employees should not be overly concerned at this stage, as the bill currently provides only a broad outline of the main points. It still needs to pass through the full parliamentary process, during which time further consultations will be held, and people will have opportunities to voice their concerns and encourage their local MPs to address specific issues. 

For those looking to gain a deeper understanding of the parliamentary process, we recommend our recent training session on understanding the law to maximise your budgets. https://youtu.be/ZSNWogr9lU4

There is still a long way to go before this bill becomes law. These initial proposals are essentially just headings; once the bill is approved, regulations will need to be introduced under the new law, providing the necessary details and guidance. In short, this is simply an early notice of what may be coming.

One of the key changes for both employers and employees will be the introduction of certain rights from day one of employment. This means that employees will gain full rights immediately upon starting their job. Currently, many employee rights (aside from those related to equalities) only come into effect after two years of service. However, there will likely still be processes in place, as is often the case, to manage employee terminations within a probationary period.

Another significant change is that statutory sick pay will be available from day one, removing the current three-day waiting period during which employers are not required to pay. For employers of direct payment users, this will result in additional costs, which should be factored into future budgets when the change takes effect. The Care Act’s statutory guidance on ensuring sufficient funds should address this. Additionally, the current earnings threshold of £123 per week before qualifying for statutory sick pay will be eliminated. It is expected that consultations will take place to determine what, if any, new threshold will be set.

Regarding flexible working, as I have often said, the interpretation of specific wording in legislation is crucial. While employees have long had the right to request flexible working arrangements (particularly following recent changes to carers' rights), this will now be formally enshrined in law. However, this does not guarantee that requests will always be granted, particularly if they would disrupt the business. There will be specific reasons that employers can cite when rejecting a request, along with an explanation. For individual employers, the decision could be as straightforward as considering the business environment and practicalities (we’ll have to wait and see), but employers may be required to communicate their decisions more formally, possibly in writing. Much like the Carers’ Rights Bill, this legislation suggests increased rights for employees, but in practice, it primarily reinforces their right to ask.

The end of zero-hours contracts. Workers who have regular hours over a 12-week qualifying period will gain the right to a contract, with further qualifying periods in place. Essentially, if someone works consistent hours, they will be entitled to a contract for those hours. Employers won’t be able to retract this easily, so some flexibility will need to be built into workforce management. This will likely have a greater impact on homecare agencies than on direct payment users, in my opinion.

There will also be a new right to reasonable notice of changes to working hours, such as being told if you’re not needed or are being asked to work different hours. Importantly, employees will have the right to be paid for cancelled shifts.

Pregnant women, during and after family leave, will receive protection for up to six months after returning to work. Employers will only be able to terminate their employment under specific circumstances during this time. However, in my view, this simply sets a time limit and doesn’t offer significant additional protection, as the Equality Act already provides these safeguards for a longer period.

Potentially, enhanced protections from sexual harassment may be introduced sooner, as these changes were promised by the previous government. The key proposal is to amend employers' duties from taking “reasonable steps” to taking “all reasonable steps.” This seemingly minor change imposes a stricter standard on employers. 

Other duties under the Equality Act could also be expanded, including protections for those going through the menopause.

For our staff, I hope the Fairer Pay Agreement (which I expect will include direct payment users, although we will need to push on this) will ensure better pay. It appears that a board will be established to set the minimum wage for our personal assistants and carers.

No significant changes are expected until at least 2025, with consultations anticipated in 2026. Therefore, there is plenty of time for input, and much could change before anything is finalised.

Separately, the government has also pledged to review age-discriminatory wage bands for workers under 21. It will ensure that the Low Pay Commission takes into account the cost of living when determining wages. Ideally, this means that wages will rise in line with inflation or other economic factors, much like benefits are adjusted.

There is also a review underway to clarify the definition of self-employment, particularly for those who work as personal assistants or carers, which may affect employers of self-employed staff.

Additionally, carer leave, parental leave, and extended bereavement leave are all under consideration for addition or/and reform.

For job seekers, there’s some good news: large employers may soon be required to publish pay data for disabled employees and employees of different races, similar to the current gender pay reporting. This will expose any significant pay gaps and will be enforced by a new legal agency.

I've tried to focus here on the changes that are likely to affect individual employers, such as direct payment users. However, it's still early days, and I’ll continue to provide updates through my various networks as more information becomes available.