The Employment Rights Bill is continuing its canter through Parliament! On Friday 14 March it had its first reading in the House of Lords and it is due to have its second reading on Thursday 27 March. When it started out in October it was a mere 158 pages long; following its passage through the House of Lords it has ballooned to an impressive 310 pages!
We discussed some of the changes to the Bill arising out of the various consultations that the government issued last autumn in our recent bulletin 'Employment Rights Bill update: the consultation responses'. Now that we have the fully amended version of the Bill we wanted to draw your attention to the other changes
Strengthening maternity protections
The Bill allows for regulations to be introduced to protect employees from dismissal other than by way of redundancy (they already have protection in a redundancy scenario) during or after the protected period of pregnancy. This protection will apply to other forms of family leave too.
The amendments provide for regulations to be made setting out details of notices to be given to the employee, evidence to be produced by the employer, as well as "other procedures" to be followed. The consequences of failing to comply with these provisions will also be covered.
Collective consultation on redundancy
In its original form, reference to "one establishment" was going to be removed.
In its amended form, there is a new threshold test. Collective consultation will be required if there are 20 or more redundancies at one establishment or a different threshold is met which will be based on redundancies across the employing entity as a whole. This will be defined in the regulations but could be a specified number of employees, a specified percentage of employees, or a number that is the higher or lower of two or more numbers.
When carrying out collective consultation, the employer will not need to consult all employee representatives together or try to reach the same agreement with all of the representatives. This addresses a concern raised in the consultation.
Fair Work Agency
The Bill creates a new state enforcement agency known as the Fair Work Agency (FWA). The Bill has been amended to add details of the enforcement powers of the FWA.
- It will be able to enforce failure to comply with the new obligation on employers to keep records demonstrating compliance with holiday entitlement. These are to be kept for 6 years and failure to comply will be a criminal offence punishable with fines.
- The FWA will be able to enforce failure to pay certain statutory payments to workers, including holiday pay and statutory sick pay and can issue notice of underpayment to employers which specifies the amount payable within 28 days. The penalty for failure to comply is 200% of the sum due and is payable to the Secretary of State. Where the sum would be more than £20,000 then the penalty will be £20,000, and where it is less than £100 the amount of the penalty will be £100.
- Workers will be able to claim up to 6 years' worth of underpayments starting from the date the notice is given. The Bill provides for the making of regulations which may specify different claim periods in relation to different statutory pay provisions, but the period will never be longer than six years. Although a notice of underpayment may not relate to any sum due before the passing of the Act it can relate to sums that become due before the coming into force of these specific provisions.
- The FWA will be able to bring employment tribunal proceedings on behalf of a worker if the worker has the right to bring a claim, but it appears they are not going to. There will also be a power to provide legal assistance for employment-related proceedings.
- It will be able to recover enforcement costs incurred by the Secretary of State from employers who are not complying with the law.
It remains to be seen how often the FWA will exercise its powers, but the new obligation on employers to keep records going back 6 years to demonstrate compliance with holiday entitlement is something which, given the sometimes tricky nature of holiday pay calculations, may well prove both challenging and time-consuming.
Umbrella companies
The Bill has been amended to bring umbrella companies within the definition of employment businesses so that they will be regulated by the Employment Agency Standards Inspectorate until the FWA takes over. An umbrella company is a company that employs individuals as part of a chain in which their labour is supplied for the benefit of an end client.
Statutory bereavement leave for miscarriage
In January the Women and Equalities Committee (WEC) published a report concluding that a period of paid leave should be available to all women and partners who experience a pre-24-week pregnancy loss. In the recent Commons debate on the Employment Rights Bill the government indicated that it accepted the need for bereavement leave for pregnancy loss and committed to having further discussions with the House of Lords on the matter during the Bill's passage.
In other news…
A consultation was issued on 18 March seeking views on how to introduce mandatory ethnicity and disability reporting for employers with 250 or more employees. The responses to the consultation will help shape proposals which will be included in the Equality (Race and Disability) Bill. The consultation closes on 10 June.
In the meantime we'll continue to keep you up-to-date with developments. For the latest position on the employment changes ahead please see our bulletin, 'The government's employment plans' .
