Changes to employment law: what optometry business owners need to know

The Government has published its Employment Rights Bill, a key commitment of its first 100 days in office.

In July, the AOP advised members that “significant changes” to employment law were likely to be coming, after the government revealed its intention to introduce ‘a new deal for working people,’ and to strengthen employment rights.

The Employment Rights Bill has been designed “to help deliver economic security and growth to businesses, workers and communities across the UK,” the government said.

Now that the 158-page bill has landed, optometry business owners can have a better idea of what changes they might need to implement in the near future.

Likewise, employees will benefit from getting up to speed on their rights as they will soon stand.

Here, OT lays out the key points that both employers and employees need to be aware of.

1 New rights from day one

Before publication of the bill, perhaps the most discussed aspect was the strengthening of ‘day one’ rights – rights that until now have only been legally required after a set period of time in employment.

Paternity (two weeks after a partner has given birth) and unpaid parental leave (up to 18 weeks until a child is 18 years old) will now be a requirement from the first day of employment, as will protection from unfair dismissal.

Unpaid parental leave is currently only a legal requirement after one year of service, and employees are currently only protected from unfair dismissal after two years.

Currently, paternity leave is not a legal requirement until 26 weeks of service.

The reforms will allow “more flexibility and security for working families,” the Government said.

Briefing documents emphasise that “workers must be supported to work while balancing the essential responsibilities of their wider life.” 

On unfair dismissal, “the current system is arbitrary and leaves workers waiting years for basic rights,” the Government said.

It is expected that reforms around unfair dismissal will strengthen the rights of nine million employees.

Employers will still be able to run probationary periods for new staff, but a statutory period may be implemented – a consultation on this will run in the near future.

2 New requirements around statutory sick pay

Statutory sick pay will be a legal requirement from the first day of sickness, rather than day four. The lower earnings threshold to qualify will be removed, and instead the amount paid will be a percentage of salary.

The percentage is to be decided through an amendment to the bill as it passes through Parliament, the Government said.

3 Changes to bereavement leave

Currently, statutory bereavement leave (of two weeks) is only a legal requirement for parents who lose a child under the age of 18, or those who have had a stillbirth after 24 weeks of pregnancy.

The bill will see bereavement leave extended more widely, although details of what the relationship to the deceased must be to qualify haven’t yet been published. Statutory non-parental bereavement leave is expected to be set at one week.

4 ‘All reasonable steps’ to prevent third party sexual harassment

The bill will see the duty on employers to prevent sexual harassment by third parties raised. Employers will need to carry out risk assessments and have clear policies for reporting and handling incidents in place.

These changes are the most time sensitive: businesses will need to be up to speed on this by 26 October 2024. This is due to rules being introduced this month by the Equality and Human Rights Commission. Read more on that here. 

5 Banning of fire and rehire

Terminating employment because an employee refuses to accept a variation in their contract will become illegal, as will firing and then rehiring an employee (or hiring someone else) to do the same job under different employment terms.

There is one exception to this rule: a defence that the business in question would effectively need to cease operations unless employees accepted new contracts.

6 Flexible working strengthened

Greater implementation of flexible working is detailed in the bill, with employers only having the grounds to refuse flexible working if the grounds are ‘reasonable.’

A list of specified grounds for refusal has been published, and includes:

• The burden of additional costs
• A detrimental effect on ability to meet customer demand
• Inability to reorganise work among existing staff
• Inability to recruit additional staff
• A detrimental impact on quality
• A detrimental impact on performance
• Insufficiency of work during the periods the employee proposes to work
• Planned structural changes.

If an employer refuses a flexible working request, they must explain why they have done so to the employee in question in writing.

The aim of the reforms is to see more flexible working requests agreed to and to make flexible working the ‘default,’ the Government said.

7 An end to zero-hours contracts

Instability for employees on zero-hours contracts is set to end with the implementation of the bill, with guaranteed hours, the right to reasonable notice for shifts, and payment for last-minute cancellations all coming into play.

Details on a minimum number of guaranteed hours and what ‘reasonable notice’ means specifically are yet to be seen.

8 Compulsory gender pay gap and menopause reporting

New ‘equality action plans’ on the gender pay gap and menopause support will be required from companies with more than 250 employees. There isn’t a huge amount of detail on this yet, other than that the companies will not be required to publish their data more frequently than every 12 months.

The policy paper states that the Government will “also require larger companies to publish information on their ethnicity and disability pay gaps,” although details of this are not present in the current bill. 

9 Collective redundancy consultation

In the case of redundancies at a large business, collective consultation will need to take place if more than 20 employees are affected across the entire business – rather than in one branch or establishment.

10 Support for new mothers

The Government is also promising to “strengthen protections for pregnant workers, making it unlawful to dismiss them within six months of their return to work except for in specific circumstances” - although we don’t as yet have the specifics of what this might mean. OT will update with more details when they are published. 

11 Removal of minimum wage age bandings

The removal of ‘discriminatory’ minimum wage age bandings is another commitment noted in the policy document, but not as yet detailed in the bill. This is tied to work carried out by the Low Wage Commission in July 2024, which will see the minimum wage tied to cost of living for the first time by April 2025. 

More as we get it, but we imagine this is a rule that employers will find pertains particularly to their most junior members of staff.

12 Creation of the Fair Work Agency

Existing enforcement functions will be brought together to increase fairness, and ensure “that workers and businesses are protected from the minority who knowingly break the rules.”

The Fair Work Agency will hold responsibility for the employment tribunal penalty scheme, labour exploitation and modern slavery, and the enforcement of holiday and statutory sick pay and the minimum wage.

The aim is to give employees a single body to approach for help if needed and provide greater clarity for employers, the Government said.

13 We do not yet have a date for implementation

The publication of the Employment Rights Bill does not mean that all provisions detailed will come into law immediately. As the government sets out in its Next Steps to Make Work Pay paper, consultation on the reforms will take place throughout 2025, with no changes expected to be implemented before 2026. 

The Government has emphasised that reforms to unfair dismissal will not come into effect before autumn 2026.

Consultations will seek “views on several areas to inform the government’s next steps.”

The Government also emphasises that it “welcomes innovative ideas on how to ensure we support all businesses in getting the right advice on any upcoming changes.”

The bill will, of course, also have to pass through both Houses of Parliament before implementation can begin.

14 The impact on retail businesses

The British Independent Retailers Association (Bira) has offered “cautious optimism” on the proposed reforms.

The association has emphasised the need for careful consideration of the independent retail sector’s “unique challenges.”

Andrew Goodacre, CEO of Bira, said: “The consultation process will be crucial in striking the right balance between protecting workers and maintaining the viability of our High Streets.

He added: “We urge the government to consider the unique position of independent retailers, who may lack the resources of larger corporations to easily absorb significant changes to employment practices.”

Independent retailers often have close-knit teams and flexible working arrangements already in place, Goodacre said, which could be impacted by one-size-fits-all legislation.

He also noted that extended parental leave could lead to a “potential administrative burden” on small businesses.

Implementing new flexible working rights in retail environments where customer-facing roles are essential could also provide a challenge, he said.

The AOP employment team will provide details for members on the measures contained in the Employment Rights Bill, and those relating to future employment law developments, in due course.