The Employment Rights Bill has just passed its third reading in the House of Lords and is now heading back to the House of Commons, where the various amendments made by the House of Lords will be considered and voted on.
You may remember the House of Lords introduced some significant amendments to the Bill – some of which were (comparatively) good news for businesses, such as the amendment providing for an unfair dismissal qualifying period of six months, but will they make it into law?
The House of Commons could choose to accept the amendments or strike them down, in which case the Bill will go back to the House of Lords (and we could see some back and forth as final wording is agreed).
We’ve dusted off our crystal ball to take a look below at three of the key amendments and what we think it’s likely their future will be.
- Six-month qualifying period for ordinary unfair dismissal
- Reduced scope of ‘fire and rehire’ ban
- Right to request guaranteed hours for zero and low-hour workers
Six-month qualifying period for ordinary unfair dismissal
The Bill was originally planned to make ordinary unfair dismissal a day one right, subject to an initial period of employment (anticipated to be around nine months) during which a simpler (but as yet unknown) process could be used to dismiss in most cases.
However, this was amended in the House of Lords so that, as it stands, there will be a six-month qualifying period for ordinary unfair dismissal rights. Unfortunately, this amendment is highly likely to be overturned by the Commons, as the day one ordinary unfair dismissal rights were a flagship Labour manifesto commitment.
Reduced scope of ‘fire and rehire’ ban
Originally, ‘fire and rehire’ was to be automatically unfair, except where the business was in ‘significant financial distress’. Amendments at the House of Lords stage now see less stringent restrictions in place:
- The ‘ban’ on fire and rehire will only apply to ‘restricted variations’, including reductions in an employee’s pay or holidays, changes to hours, pension and other changes defined in regulations
- Where an employee is dismissed for failing to agree to a variation of their contract that is not a ‘restricted variation’, the dismissal will no longer be automatically unfair, and the matters that must be considered in determining whether the dismissal is fair or unfair are set out in a new provision. This requires tribunals to take into account matters including the reason for the variation and any individual or collective consultation, and anything the employee was offered in return for the change.
This was a government-backed amendment in the House of Lords, making it highly likely that it will be retained. This would be good news for businesses, but in many cases, it would still prevent employers from making variations in situations they would like to.
Right to request guaranteed hours for zero and low-hour workers
The requirement in the original Bill was for employers to make offers of guaranteed hours to workers on zero and low hours contracts, reflecting the actual hours they’ve worked over a reference period. A House of Lords amendment would see the requirement kicking in only if it is requested by the qualifying worker.
Whilst the amendment would be welcomed by many businesses as striking a fairer balance and being more practical to manage, it is vulnerable to being struck down in the Commons as guaranteed hours for these workers was a manifesto commitment.
We will continue to keep you up to date with Employment Rights Bill developments. In the meantime, if you have an HR matter you would like assistance with, please don’t hesitate to get in touch.