Just as the Employment Rights Bill makes its way to the last stages of the parliamentary process before it is given Royal Assent, peers in the House of Lords have proposed 63 pages of amendments. The surprising element of this is that a number have come from Baroness Jones of Whitchurch and other Labour peers (many with cross party support), and are therefore more likely to find their way into the final Act.
The amendments contained in the list are significant, both in their number but also the likely effect that they will have on both employers and employees alike. We have previously written about the detail of the Bill and its evolution to date, but set out in this article a summary of the some of the latest proposals.
Extended Family Leave Rights
Bereavement leave will be extended to cover pregnancy loss, providing support for those who suffer a miscarriage prior to the 24th week of pregnancy. This proposal was announced some weeks ago, but the draft wording is now in the Bill.
A new type of parental leave, called 'kinship leave' will be introduced for friends, relatives or extended family members who take responsibility for the raising of a child. The leave will be for a maximum of 52 weeks where the care is expected to last for at least a year and until the child turns 18. If more than one person takes responsibility, the 52 weeks may be shared between them. Further details relating to protection from redundancy, the right to return and, crucially, the right to be paid during any period of kinship leave will be set out in statutory instruments to follow.
The Bill mandates a comprehensive review of all statutory parental leave. The amendment sets out that this review must be laid before Parliament by no later than 1 January 2027, with incremental increases to paternity leave and pay coming into effect within six months of the publication of that review. Additionally, statutory paternity pay is to be substantially increased. A cross bench amendment from Labour and Conservative peers requires the Secretary of State to introduce secondary legislation to provide fathers and second parents with six weeks' pay, calculated at the rate of 90% of the father's salary or the median gross earnings in the UK, whichever is the lower. This will not come into force until at least 2030, but is likely to improve the uptake of both paternity leave and, potentially, shared parental leave.
Non Disclosure Agreements
One of the most significant amendments is Labour's proposal to make confidentiality clauses void when they prevent workers from reporting harassment or discrimination unless the provision is in an 'excepted agreement'. It is not yet clear what will constitute an 'excepted agreement', but it will be defined in subsequent secondary legislation.
This amendment has been welcomed by unions and campaign groups such as Can't Buy My Silence UK (run by Zelda Perkins, the former assistant to Harvey Weinstein). Some say that employers should be publicly named and shamed in order that real cultural change within failing organisations might occur.
However, other commentators are concerned that this could lead to a far greater reluctance on the part of employers to settle claims of harassment, thereby forcing those who have endured discrimination to undergo the stress and expense of lengthy Employment Tribunal litigation to achieve redress.
It may be the intention that a valid settlement agreement (where the individual must take independent legal advice for the agreement to be binding in relation to certain statutory claims) will constitute an 'excepted agreement'. Given that solicitors are already subject to a warning notice from their regulator, the SRA, that puts significant limitations on their ability to draft clauses that seek to silence complainants, this may provide the necessary balance to mitigate unintended consequences.
In any event, however, employers would be well advised to properly investigate any allegations of sexual harassment and be prepared to publicly defend their actions in response.
"Fire and Rehire" Restrictions
The original proposals that sought to prevent employers from forcing through changes to contracts by way of 'fire and rehire' were draconian and complicated. An employer seeking to make any change to an employee's contract would be liable for automatic unfair dismissal if it fired the individual and rehired them (or hired another person to fill their role) unless they could show that they needed to make the change in order to avert the imminent financial failure of the business.
The proposed amendments are still draconian, and are now even more complicated. The amendments now protect the employee if the proposed change is a 'restricted variation'. The list of restricted variations are wide ranging and include changes to pay, piece work, pensions, hours, shifts, time off, or (inevitably) any other variation that may be set out in secondary legislation. Interestingly, changes to duties are not covered, but the employer cannot reduce the pay that the employee receives as a result of that change. Similarly, a requirement for an employee to relocate is also not covered, but the other terms and conditions in the new location would need to mirror the existing role or fall foul of the protection.
The Government has also spotted the potential loophole that might allow employers to make unilateral changes to contracts without the employee's consent and has closed it (although it would appear that existing variation clauses in contracts may continue to be valid).
Another loophole was that while employers would still be liable for unfair dismissal if they replaced the employee who refused the proposed variations with another employee, they could seemingly avoid the problem if they engaged an agency worker instead. This has now been addressed.
Observers had also noticed that if the only way that changes could be made to workers' contracts was if the organisation faced an existential financial threat, public sector bodies (and in particular local authorities) would never be able to rely on this exception: they could never, in effect, go out of business. The amendments introduce new tests for public sector organisations that are essentially akin to the existing exceptions for businesses in the commercial sector.
Statutory Joint Industrial Councils
Lord Hendy (Labour) has proposed that the Bill allows for the creation by way of secondary legislation of a Statutory Joint Industrial Council. This would mean that workers in certain sectors of the economy would be entitled to have their levels of pay, terms, conditions and benefits to be decided by collective agreement. This builds on the existing provisions in the Bill relating to collective bargaining for adult social care and school support staff and will potentially have very far-reaching effects.
Miscellaneous
The proposed amendments also contain a number of other provisions:
- additional protections have been given to agency workers when it comes to employers offering them guaranteed hours, essentially ensuring that they are paid at least as well as when they were working as temps;
- it looks like the definition of 'short notice' when it comes to penalties arising from shift changes on short notice will be 48 hours; and
- there may, subject to statutory instrument, be some protection for SMEs when it comes to statutory sick pay: Lord Goddard (Labour) has suggested that those who employee fewer than 250 staff may be entitled to a rebate. The secondary legislation needs to be put in place within 60 days of the date the Act is passed.
Other proposed amendments
As well as some (predominately Conservative) amendments designed to water down the Government's flagship plans, peers from outside the Labour party have also sought to introduce some new, interesting provisions into the Bill. While these may not become law in this piece of legislation, they may nonetheless gain traction over the coming years. These include:
- the creation of a new body corporate called the 'Office of the Whistleblower', tasked with protecting whistleblowers and overseeing the process of whistleblowing;
- the introduction of a criminal offence for those who cause whistleblowers to suffer detriment, punishable by a fine of up to 10% of the organisation's annual global turnover;
- the introduction of a new duty on medium and large employers, and those in financial services or with vulnerabilities to money laundering or terrorist financing to investigate whistleblowing allegations;
- a new obligation on employers with more than 250 employees to publish details of their policies on parental leave and parental pay on their website; and
- various protections relating to freelancers, including a new duty on the Government to consider them when developing policy or regulations.
These amendments will return to the House of Lords on 14 July for further debate before returning to the House of Commons for a final vote.
The final vote will now take place after summer recess, and it is clear that a lot of work still needs to be done by various government departments in order to prepare the statutory instruments that will be required to give effect to much of the substance of the legislation in the proposed timeframe.