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What does the Employment Rights Bill mean for social housing?
Kirsty Thompson, employment partner at Devonshires, outlines how the changes to workers’ rights may affect sector employers
Kirsty Thompson is an employment partner at Devonshires
We now have the published Employment Rights Bill, most of which had been well-trailed. There is a lot of detail still to be resolved, and a number of specific consultations already under way, but what are the key issues for the social housing sector?
The bill has elements that will have an impact on all employers, for example unfair dismissal becoming a day-one right. It also has elements that fall short of what was promised, for example flexible working will not become a default right – it will remain a right to request, but just with a duty on the employer to act reasonably if deciding to refuse a request.
Then there are also elements that are of questionable impact, for example making sexual harassment a specific category of whistleblowing given that it already counts as whistleblowing for being a breach of legal obligation.
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However there are three areas that will potentially have the greatest sector-specific impact.
Zero-hour and ‘low-hour’ staff – of which there are many in this workforce – will become entitled to a contract for a guaranteed number of hours, reflecting the regular hours they work; reasonable notice of shifts or any changes to shifts; and compensation for cancelled and curtailed shifts.
A lot of the detail as to how the new arrangements will apply (for example, what qualifies as a ‘low-hour’ contract, what amounts to “reasonable” notice, how much compensation should be paid) is still to be settled.
The new rules do not go as far as a ban on zero-hour contracts, which had previously been promulgated. However the changes are still likely to lead to a reduction in these working arrangements, if only because the rules are so complicated that employers won’t think them worth it anymore. Employers that currently rely on such arrangements may want to reassess their workforce strategy to see what alternatives will suit their needs.
Another seismic change in this area will be the establishment of an Adult Social Care Negotiating Body, tasked with negotiating pay and conditions for adult social care workers at a collective level. Once ratified, such terms would automatically apply, creating a minimum level of terms and conditions that must be complied with by employers.
Dismissal as part of a dismissal and re-engagement process to change terms and conditions will become automatically unfair except in very limited circumstances.
This has been a reasonably commonly used tactic, in particular as part of strategies to close out defined benefit pension schemes in the sector.
The reasons for employers wanting to close out their pension schemes have not, thus far, been because of current or imminent financial viability concerns. However, that will be the only scenario in which dismissal and re-engagement won’t create automatic unfair dismissal liability; the exemption will apply where the employer wants to vary the employment contract in order to eliminate or mitigate financial difficulties which are affecting, or are likely in the immediate future to affect, its ability to carry on business as a going concern or to carry on its business activities.
Closing out defined benefit pension schemes where employees have a right to participate will become much more expensive to deliver as employers will either need to secure consent (which will come at a price), or accept the cost of the compensation that would be due for the unfair dismissal claims. We may see employers that had been content to maintain defined benefit pension schemes into the medium term decide to exit before it becomes more difficult, or at least take steps to build in the future right to leave.
“It will become easier for trade unions to gain recognition as a result of reductions to the required level of workplace membership and employee support for recognition”
It will become easier for trade unions to gain recognition as a result of reductions to the required level of workplace membership and employee support for recognition. An application for recognition could proceed with as little as 2% of the bargaining unit being union members, and could pass with just a simple majority in a ballot, regardless of turnout.
Unions will also be able to apply for rights of access to workplaces where they are not recognised. They could use such access to, among other things, recruit and organise workers and thus put themselves in a better position for a successful recognition application.
Once recognised, organising industrial action will be made easier by virtue of removing minimum ballot turnout requirements.
Unions have already been feeling more empowered and these changes will continue that trajectory. The presence and role of trade unions in the sector is likely to increase.
As trailed, this is definitely the beginning of the biggest upgrade in rights at work for a generation, with more to come. The government’s plan is that it will “make work pay” and in turn grow the economy. However, there is much anxiety among RPs about the operational, financial and legal impact. These changes will all happen, but there is at least time to prepare as the majority of changes will not be implemented until at least 2026.
Kirsty Thompson, employment partner, Devonshires
