With recent additions increasing the expected cost to UK businesses by another £80m a year, total compliance costs are now forecast to exceed £5bn annually.

In this article, we outline some of the key proposals and explain what they could mean for your business:

New clauses added to the Bill

NDA (non-disclosure agreement) limits:
Clauses preventing staff from disclosing work-related harassment or discrimination would no longer be valid, a change the Government estimates will cost businesses £30m a year.

Impact: This proposal will make it harder for employers to negotiate settlements with employees, potentially leading to more claims progressing to Employment Tribunal. Employers should continue ensuring that their employees are provided with training to tackle discrimination and harassment, whilst continuing to identify risks and adopt measures that seek to prevent discrimination and harassment in their workplaces.

Extension of unpaid bereavement leave:

Unpaid bereavement leave to be extended to those who lose a pregnancy before 24 weeks. The Government estimates this proposal could add more than £50m a year in costs for employers.

Impact: Once implemented managers will need to be trained on handling requests sensitively and in line with the law, whilst HR policies and payroll systems will need to be updated.

Other clauses included in the Bill

Unfair dismissal as a day-one right
The current two-year qualifying period will be removed. It is however expected that the changes will include a mechanism for terminating the employment of those with short service on probationary periods in prescribed circumstances.

Impact: This change is expected to lead to a sharp rise in unfair dismissal claims and greater scrutiny over probationary dismissals. Employers should ensure disciplinary and performance processes are well-documented from day one.

Right to guaranteed hours

Workers on variable or zero-hours contracts could request a minimum number of paid hours. With 2.4 million people eligible, the Government estimates the costs for businesses may reach £1bn annually.

Impact: This clause is expected to hit businesses in health, education, retail and services hardest, where flexible and zero hours contracts are more typically used. Workforce planning and budgeting will need to be reviewed.

Paternity and unpaid parental leave become day-one rights
The current qualifying periods to access statutory paternity and unpaid parental leave would be removed. Employees returning from maternity leave would also gain stronger protection from dismissal during the six-month period following their return to work – this measure will supplement existing statutory provisions that grant employees returning from maternity leave, and certain other forms of family leave, enhanced rights to suitable alternative vacancies in redundancy cases.

Impact: Once the detail is known, employers will need to update family leave policies and incorporate the new protections into planned redundancy exercises, re-organisations and other cases where dismissals are being considered.

Statutory sick pay extended
The current qualifying period for sick pay would be reduced, while the lower-earnings threshold for eligibility would also be cut – extending the right to staff on lower incomes or irregular hours.

Impact: Employers will face higher absence management and payroll costs, and it will become more important to invest in effective processes to manage absence, including training managers to ensure that they can manage absence within the law.

Whistleblowing extended to sexual harassment
Reports of sexual harassment from employees will legally count as whistleblowing, further enhancing the protection against dismissal or unfair treatment that already exists.

Impact: Increases the risk of unfair dismissal, whistleblowing detriment, discrimination and harassment claims if grievances and complaints are mishandled. Employers should refresh grievance and whistleblowing procedures and should ensure that managers are correctly trained.

Industrial action protections widened
Currently employees taking part in industrial action can be lawfully dismissed after 12 weeks, in appropriate cases, but this limit would be removed, rendering dismissals automatically unfair. Employers will also be barred from treating striking workers less favourably for taking part in official industrial action.

Impact: Employers in unionised sectors should review industrial relations strategies.

Preparing your business

The Employment Rights Bill will demand substantial changes to HR policies, employment contracts and other documentation once the detail of the legislation has been finalised. It also increases yet further the importance employers must place on having effective grievance processes and ensuring that managers have received recent training.

Now is the time for employers to:

• Budget for potential increases in tribunal exposure.
• Budget for the additional cost of HR administration, including preparing to audit and update policies and procedures as further detail of the changes becomes known and the various measures approach implementation.
• Train managers to improve workplace practices and provide the skills they need to tackle workplace issues effectively and within the law.
• Ensure that effective disciplinary and performance management procedures are in place and processes are being followed (and well-documented) from day one.

How TWM can help

At TWM, we work closely with businesses to help them implement effective people management processes, including helping them understand and prepare for the impact of new legislation, which often has far-reaching implications.

Our employment specialists advise on risk management, settlement strategies, and compliance, helping clients navigate even the most complex legislation.

We also provide training for businesses to help with developing management skills and ensuring a clear understanding of what the law requires and how to work within that legal framework to tackle day to day issues in the workplace.

To discuss how the Employment Rights Bill may affect your organisation, please contact our Employment Law team today.