Employment Law Care Sector Update – Employment Rights Bill 2024
22nd October, 2024
The long awaited Employment Rights Bill 2024 was published on 10 October 2024. There is no doubt that there will be landmark changes but a lot of detail still needs to be fleshed out in the coming months (or years?) as consultation on the detail takes place.
Consultation is not a quick process and it is expected that the majority of the changes will not come into effect until 2026.
All businesses and sectors will feel the impact of these new employment laws but there are several that will make life for care providers particularly challenging.
Unfair dismissal: Day one right
Currently employees can be dismissed if they have less than two years’ service without the threat of an ordinary unfair dismissal claim subsequently landing on the Service Manager’s desk. This is particularly helpful in cases of poor performance or misconduct but going forward all employees will have the right not to be unfairly dismissed from the date their employment commences. This new law will be subject to some flexibility with a maximum probationary period being introduced, most likely up to 6 or 9 months. What we don’t know yet is what procedure will need to be followed in order to dismiss someone during the probationary period but it is likely that a prescriptive process will be introduced.
Providers should start to put in place a method of monitoring performance during probationary periods and their expiry if this is not already in place. It will be crucial not to miss deadlines and leave the business with underperforming employees who then need to follow a lengthy performance improvement process before they can be fairly dismissed.
SSP
Another day one right will be the right to receive Statutory Sick Pay when absent from work due to illness. The current three day waiting period will be reduced, as will the requirement to meet the current lower earnings threshold of £123 per week, meaning that the increased cost needs to be built into budgets.
Zero hours contracts
The government’s proposal was to ban “exploitative zero hours contracts” causing worry that bank staff would be no more. This is not going to be the case. Instead what we seem to have, will be a series of new requirements which, if employers do not follow, can result in Tribunal claims and compensation payable to the affected worker. These are:
- Zero hours workers who have worked consistently during a (to be determined) reference period, must be offered a permanent contract that reflects the hours worked. The reference period will be agreed following consultation but will most likely be the previous 12 weeks.
- Businesses will be required to give reasonable notice of a shift to a zero hours worker and give reasonable notice of cancellation or changes to a shift. What reasonable notice is, is yet to be determined.
This was a big worry to providers but following the Bill’s publication, is less of a concern. Bank staff play a crucial part in keeping services safely staffed and if there are consistent hours available, it would be beneficial for the business to have an employee on a permanent contract for set shifts. I would expect however that the take up from bank staff for permanent contracts will be low as many will not want to give up the flexibility afforded by their current working arrangement.
Collective redundancy consultation
The obligation to carry out a collective consultation process arises when an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. Where this is triggered, the consultation period must begin at least 30 days before the first redundancy takes effect, or at least 45 days before, where there are 100 or more redundancies proposed.
Currently, care providers are able to class each of their care homes as an individual establishment, meaning that if one home closes and 19 employees are made redundant, the redundancy of two members of head office shortly after would not trigger collective consultation obligations. Following the introduction of the Employment Rights Act in due course, this will no longer be the case.
Businesses will no longer be able to treat homes as separate establishments but will need to monitor the number of redundancies across the organisation as a whole on a rolling 90 day basis to determine when collective consultation is triggered.
This is a fairly straightforward change so consultation should not be needed, meaning that this could be one of the first changes to be introduced. The change will require more careful planning and monitoring for providers and training for managers and HR is recommended.
Trade unions
The rights of trade unions will be expanded significantly under the new Employment Rights Act such that providers should expect to receive increased communications from unions seeking voluntary recognition and if not agreed, commencing the statutory recognition procedure.
The statutory recognition process is being simplified and the thresholds to be met for recognition to be granted are being lowered.
Trade unions will be increasingly visible too in care homes once access agreements are introduced for agreement between the employer and union to permit access on agreed terms to the employer’s premises and staff for the purpose of recruitment, organising and collective bargaining. Employment contracts will also need to be updated to highlight that the individual has the right to join a trade union and amongst other things, the rights of trade union representatives in the workforce will also be extended.
Fair pay agreement in adult social care
The Employment Rights Act will see the creation of the Adult Social Care Negotiating Body. The purpose of this body will be for representatives from employers in the sector and trade unions to agree a minimum level of terms and conditions, such as pay rates, which will then be binding on all adult social care employers.
Quite how this will work in practice remains to be seen but it is safe to say that the intention will be for pay to be above National Minimum Wage, which is projected to increase from £11.44ph to over £12ph (for over 21’s) in 2025. Significant increases in pay for front-line staff has the effect of reducing the differential higher up the pay grades which will exacerbate the reluctance to take on increased responsibility with more senior roles, for only a small increase in hourly pay. It’s also notable that there has not yet been any mention of an increase in funding to help pay for such pay increased.
In addition to the above, there are a raft of other proposed changes including minor changes to flexible working requests, paternity and parental leave also becoming day one rights, enhanced protection for pregnant employees and those returning from maternity leave and dismissals where an employee refuses to agree to a variation of their contractual terms becoming an automatically unfair dismissal. As the consultation commences we will provide updates to social care sector employers.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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