Implications for charities of the Employment Rights Bill

These changes, prompted by extensive consultation, include new provisions and revised obligations aimed at enhancing worker protections. While many of the reforms continue to support the Government’s ambition to “make work pay”, they bring additional complexity for charity employers - particularly those dependent on flexible staffing models, agency workers, and project-based staffing models.

Key proposals under the Bill

The Bill's key proposals include changes to unfair dismissal rights, the rules surrounding fire and rehire, the rights of zero-hours and low-hours workers to guaranteed work, the flexible work regime, the law on sexual harassment, and more. 

The Bill introduces measures designed to enhance worker security and rights, but these will also bring additional administrative and operational challenges. For charity employers, this includes navigating obligations such as tracking hours for zero-hours workers, restructuring shift scheduling processes to minimise liability, and adapting dismissal practices to meet stricter standards.

'Day-one' unfair dismissal rights

One of the most heavily reported changes proposed by the Bill is the removal of the current two-year qualification period for unfair dismissal claims. This means that, once the Bill is passed and comes into force, employees will no longer have to accrue two years' employment before they can bring a claim. 

Alongside the day-one unfair dismissal rights, the Bill also introduces a statutory "Initial Period of Employment" (IPE).  The length of the IPE is yet to be confirmed: the government has indicated a preference for nine months but this is subject to consultation.   

During the IPE, employers may be able to dismiss employees using a "light touch" procedure, which could involve a meeting where concerns are explained, and the employee has the right to be accompanied. However, the exact requirements and interplay with the Acas Code of Practice are still to be defined in the forthcoming regulations.

Crucially, the lighter process during the IPE will not be available for all dismissals. It is expected to apply only where the principal reason for dismissal relates to the employee’s capability, conduct, illegality, or another substantial reason directly connected to the employee (not including redundancy or restructuring under SOSR). This narrower scope suggests that employers will need to carefully document and justify dismissal decisions even during the IPE. Effective management of new starters during probationary periods will become increasingly important, as the probationary review process is likely to provide essential evidence of the reason for dismissal during the IPE. Charity employers should ensure that their review procedures are thorough, transparent, and well-documented, allowing them to demonstrate that any dismissal decisions are fair, reasonable, and compliant with the new requirements.

Guaranteed hours for zero-hours workers

Another key proposal under the Bill is the right to guaranteed hours for zero-hours and low-hours workers.  Charity employers will need to make guaranteed hours offers to employees based on their average hours worked over a defined reference period. Workers will then have a set period to accept or reject the offer.  Non-compliance may result in Employment Tribunal claims, creating additional legal, and reputational risks for charities.

For charities, where funding cycles and project-based activities often dictate workforce requirements, the new obligation could pose challenges. The cyclical nature of the process means employers will need to monitor and track changes in workers' hours. If a worker's hours increase after declining or completing a previous offer, employers will be required to make another guaranteed hours offer.  

This proposal has been profiled as one of the government's flagship policies.  However, much of the detail around how the new rights will work in practice is yet to be clarified and is likely to be fleshed out through a mixture of amendments to the Bill and secondary legislation.  Some key issues for charities to monitor include:

• The length of the reference period used to calculate average hours;
• The response time workers will have to consider offers;
• Provision for temporary guaranteed hours during fluctuating demand period, particularly relevant to seasonal charity activities; and
• Exemptions, if any, that may apply to specific roles or sectors.

The latest amendments to the Bill suggest that employers may be permitted to contract out of the guaranteed hours requirement through a collective agreement with a recognised trade union. This could offer a useful route for charities that recognise unions and rely heavily on a flexible workforce. However, it is likely that concessions may be sought in other areas to facilitate an agreement on guaranteed hours.

Reasonable notice of shifts and compensation for changes

Under the Bill, charity employers will be required to provide reasonable notice of shifts to workers and compensate them for late changes or cancellations. While the amount of compensation will be capped at the pay for the lost shift, the specific details - including the definitions for terms such as "short notice" and "qualifying shift" - will be determined in regulations.

This presents a challenge for charities relying on flexible staffing models, including part-time workers, casual/seasonal staff, or short-term contracts. Scheduling processes will need to be carefully reviewed and adapted to prevent liability for late-change compensation, particularly in roles dependent on fluctuating demand, such as seasonal events or fundraising campaigns.

Recent amendments to the Bill confirm that the right to guaranteed hours and reasonable notice will also apply to agency workers, with the end hirer (the charity) responsible for facilitating this.  

Discrimination and harassment

The Bill will expand the current duty on charities to take reasonable steps to prevent workplace sexual harassment. Charities will now be required to take 'all' reasonable steps to prevent such harassment. Regulations will be introduced to provide further guidance on what these reasonable steps will look like and charities will need to ensure that they act promptly to implement them to comply with the duty. Reporting sexual harassment will also become a protected disclosure for whistleblowing purposes giving protection from detriment and dismissal to the individual alerting the charity of such misconduct.

The Bill will also make employers liable for the harassment of staff by third parties, unless all reasonable steps are taken to prevent such harassment. It is important to note that this liability will apply to all types of harassment, and not just sexual harassment. In preparation for this, it would be sensible for charities to carry out risk assessments to identify any particular roles or situations where third-party harassment is more likely to occur and consider what steps can reasonably be taken to prevent it. This may involve:

• reviewing lone working arrangements and public facing roles
• introducing anti-harassment provisions and training requirements into agreements with contractors and suppliers
• publishing guidance for service users on acceptable behaviour
• introducing methods of reporting and monitoring incidents of third-party harassment
• putting up clear signage in public facing areas to make it clear that harassment will not be tolerated and taking action when third-party harassment does occur. 

Collective redundancy provisions and increased penalties

Currently charities are required to inform and collectively consult with trade unions or employee representatives where 20 or more redundancy dismissals are proposed at 'one establishment' i.e. one site or setting.

The Government initially proposed removing the phrase "at one establishment" from the collective redundancy thresholds when the Bill was first introduced.  This raised concerns that collective consultation would be triggered whenever the total number of redundancies across an organisation reached 20 or more, regardless of whether each individual site was making fewer than 20 redundancies. The Government has now altered this approach. The amended proposal reinstates the concept of 'at one establishment' but introduces an additional provision allowing regulations to set a higher threshold (above 20) for situations where redundancies are taking place across multiple sites. In addition, the maximum protective award for failing to consult will increase from 90 to 180 days’ pay per employee which could create a considerable financial liability.

Statutory Sick Pay (SSP) and enforcement of underpayment

The Bill will require SSP to be paid from the first day of sickness absence. Currently, SSP is payable from the fourth day of absence, after three 'waiting days'. The lower earnings threshold for SSP eligibility will also be removed, meaning all employees will qualify regardless of earnings. Employees earning below a certain threshold will receive the lower of 80% of their average weekly earnings or the statutory SSP rate. A new enforcement power also allows the Secretary of State to issue notices of underpayment covering up to six years.

What happens next?

The Bill is currently progressing through parliament and is expected to be passed in mid-2025 at the earliest, although the government has confirmed that the unfair dismissal provisions are not expected to take effect until Autumn 2026. 

Charities will need to carefully monitor the progress of the Bill in order to prepare for change.  Once in force, it will be essential for charities to balance new legal obligations with their funding cycles and mission-driven objectives, ensuring compliance without compromising their ability to meet their charitable objects.

Early preparation will be essential for charity employers to meet compliance obligations without compromising service delivery.

Bookmark our Employment Rights Bill tracker to keep up to date with the progress of the Bill. We will continue to report on any developments and how they may impact the sector.

For more information, please contact Joanne Oliver in our Employment team on 0117 314 5361, or complete the form below.