Reed Smith Newsletters

Welcome to our monthly newsletter, with a summary of the latest news and developments in UK employment law.

Our December 2024 update looks at the latest proposed employment law reforms, including plans to extend the time limits for bringing ET claims to six months, as well as details of a new criminal offence for businesses that fail to prevent fraud. We also provide a round-up of recent interesting cases, covering issues such as accent-based harassment, swearing at work and improper behaviour during negotiations, as well as a very expensive unlawful deductions claim.

Latest employment law reforms – Employment Rights Bill

Amendments to the Employment Rights Bill: As the Bill is making its way through the parliamentary process, a number of amendments have been made or proposed to the content. These include:

  • Employment tribunal (ET) time limit: Extending the time limit for bringing ET claims from three months to six. This is not altogether surprising: whilst the time limit extension was not in the original Bill, the accompanying paper did suggest it would end up being included. Extending the time limit will increase risks for employers and further burden the already stretched ETs.
  • Unfair dismissal – initial period of employment (IPE): Whilst the initial Bill was silent on the length of the IPE (nine months being the government’s expressed preference in an accompanying paper), the Bill now explicitly states it should be between three and nine months. There is no suggestion that the government’s preference for nine months has changed, but the amendments set out parameters should the IPE length need to be adjusted in the future.
  • Unfair dismissal – compensation for unfair dismissals during the IPE: A new clause gives powers to set a maximum compensatory award for unfair dismissals during the IPE. This is consistent with previous suggestions of a different compensation regime for dismissals during the IPE, and we can expect this to be a topic for consultation.
  • NDAs: A new proposed clause expressly renders void any confidentiality provisions which prevent a worker from making a disclosure about harassment, including sexual harassment.
  • Contractors: New provisions propose a ban on substitution clauses in contracts for services.

Impact assessments: The Regulatory Policy Committee (RPC) has published a report highlighting serious concerns about the planned reforms and the inadequacy of the impact assessments, which accompany the draft legislation. Describing the impact assessments as unfit for purpose, the RPC’s report requires the government to undertake more labour market and macroeconomic analysis to better understand the impact of the reforms on employment, wages, output and the costs to employers. It also requires the worst-rated impact assessments to provide further analysis and evidence to support them, including further consideration of an option to simply reduce the unfair dismissal qualifying period as an alternative to current plans, evidence as to whether employers are currently handling flexible working requests unreasonably, and more analysis of the prevalence of third-party harassment.

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