Employment rights legislation is making its way through Parliament. When it becomes law, it will affect businesses in the cold chain. Here two legal experts outline what the changes could mean, writes Dan Parton.
In October 2024, the Employment Rights Bill was introduced to Parliament, a significant step in bringing through a raft of 28 changes to employment legislation that could have a substantial effect on businesses operating in the cold chain.
While the bill is still some way from becoming law – most measures are expected to come into force during 2026 – managers need to be preparing now for the potential impact.
One of the biggest changes in the bill is scrapping the two-years’ service qualification period for unfair dismissal and it becoming a ‘day one’ right. This means the same processes and standards will have to be applied to managing employee conduct and performance to all staff, regardless of their length of service.
“There will be an increased risk of tribunal claims being made against a business, and more time will need to be spent on ensuring fair and thorough disciplinary and performance management processes are followed,” says Dominic Cooper, a professional support lawyer at Citation.
“However, the impact of these changes will be softened by the Employment Rights Bill allowing for more relaxed rules still to apply during a probation period and it is likely that lower levels of compensation will be set for any dismissals in the probation period that are found to be unfair.
“Furthermore, it has always been possible to bring claims for discrimination or ‘automatically unfair dismissal’ on certain specific grounds from the start of employment, so recommended good practice had always been to follow robust and transparent processes before dismissing employees even in the early stages of their employment, and companies that already have these systems in place should not need to change their approach significantly.”
Heather Lunney, a solicitor in the employment team at Backhouse Jones, says that while the legislation isn’t expected to come into force until Autumn 2026, operators should be looking at tightening up their recruitment and reference/pre-employment checks and processes now. She says: “Operators should be thinking about putting measures in place to closely monitor new employees during probationary periods and ensure that probationary periods and the end of them are properly diarised.”
Zero-hours changes
Another significant change is to zero-hour contracts. Lunney says the bill provides a right for workers on zero-hour or minimum hour contracts to be offered a guaranteed hours contract that reflects the number of hours worked during a previous reference period and guarantees a minimum number of hours going forward.
“They have specifically stated that it also includes minimum hours contracts, which effectively prevents employees from putting workers on a one- or two-hour contract now to get around this new legislation,” she says.
“The reference period employers will need to look at is suggested to be 12 weeks, but that’s not guaranteed. That will be up for debate for during the consultation period – this will be fraught with difficulties in respect of seasonal fluctuations.
“Once a guaranteed hours contract has been offered the worker has the right to accept or reject the offer during a response period. We know many workers prefer zero-hour contracts because it gives them flexibility to accept or decline offers of work, so they can if they wish choose to stay on it.
“The overall terms of the new contract can’t be less favourable than the existing contract, so you can’t, for example, offer them a reduced hourly rate to compensate for the guaranteed hours they are entitled to.”
Lunney adds that workers will have the right to reasonable notice of a shift and of cancellation. “So they would be entitled to a payment every time a shift is cancelled at short notice,” she says. “We don’t know what’s reasonable, but it won’t be more than seven days.
“The government has made it clear that the right to be offered guaranteed hours contracts, given reasonable notice etc will also apply to agency workers, meaning operators can’t avoid this by just using agency workers.”
Cooper adds that in sectors like the cold chain, where flexibility and round the clock planning is required, this could require extra effort to be put into ensuring shifts and schedules are managed efficiently to avoid short notice changes. “Employers may also want to consider whether zero-hours contracts are the most effective arrangement for managing employees’ hours and the needs of the business, or whether alternatives such as variable hours contracts (on higher minimum hours), temporary, seasonal or genuinely casual agreements may be more suitable,” he says.
Flexible friends
The Employment Rights Bill will also make changes to flexible working arrangements. While it was billed in advance as making flexible working arrangements the default, the bill hasn’t gone that far.
“Employers will still have the right to refuse requests, and the grounds of refusal remain the same,” says Lunney. “Currently, an employer only has to inform an employee of the ground for refusal. The bill provides that employers will now have to state the grounds of refusing the application and explain why they consider it reasonable to refuse the application.”
Cooper notes that increasing take-up of the right to request flexible working could pose challenges if numerous employees want to work on very different arrangements, making the co-ordination of logistics more difficult. “However, if there are reasonable grounds to believe that granting requests will have a materially detrimental effect, employers can still refuse these or offer compromise alternative arrangements,” he says. “The key requirement is that requests are handled fairly and any refusal is objectively justifiable.”
Financial implications
Cooper says that as the Employment Rights Bill is still only in the early stages of being reviewed in Parliament, it is difficult to make reliable estimates on likely financial implications. “However, the government have already started publishing estimates of the costs to businesses of certain specific measures, for instance they have estimated that increased administrative costs related to flexible working could cost about £2bn over 10 years, and that the introduction of unfair dismissal as a day one right will have a net cost of around £330m after balancing financial benefits and costs to employers and employees.
“However, the government has stated that they believe, and their intention is, the various changes introduced by the bill will ultimately help drive growth and productivity and result in financial benefits to companies as well as costs, albeit the benefits will perhaps be more indirect than the costs. Although some changes will represent a measurable upfront cost to businesses, if implemented effectively they could lead to longer-term savings from metrics such as reduced absences, improved employee retention, fewer disputes and greater trust and engagement leading to improved productivity.”
Prepare early
While most cold chain companies are aware of the bill and some of its headline points, Cooper says businesses should start gaining a greater understanding of it and preparing for it sooner rather than later. “Employers should review their standard policies and contract terms and identifying areas that may be in conflict with the upcoming changes or which may need strengthening.
“There is also value in looking at current shift patterns and working arrangements to consider how increased flexible working and/or reduced use of zero-hours contracts could be managed. As with any changes to working practices we would recommend consulting with staff to encourage greater buy-in and acceptance and understanding of any changes and make the transition smoother.
“Good resources are already available to learn more about the bill, and there is plenty of time to get fully to grips with it before it comes into effect.”
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