Employment Rights Bill

The LGA is keen to work with the Committee and government to ensure the Employment Rights Bill is workable for local authorities and that resulting costs do not exacerbate the stretched budgets of the sector. As an organisation with a history of sectoral and national collective bargaining, we have a significant experience in many areas covered by the Bill.

School Support Staff Negotiating Body (SSSNB)

• The LGA has a key role to play in the reinstatement of the SSSNB, having been involved in the previous SSSNB and currently managing the collective bargaining apparatus and employer sides.
• While many of the details of the SSSNB have yet to be finalised, it is important that existing national collective bargaining arrangements in the local government sector are given due consideration.
• Should the SSSNB result in school support staff roles being paid more than other roles in the same employer who were previously carrying our work rated as equivalent it would open the scope for equal pay claims at considerable cost.
• Councils could incur other costs through SSSNB/SoS ratified agreements that are not backed by funding. There will also be implementation costs for councils for which there is no funding currently committed.
• It is imperative that no agreements are forced on to councils for which funding would be required. To help prevent this, the LGA suggests that provision is made to ensure that local authority employers hold the majority of seats on the SSSNB employer side, as is currently the case for the collective bargaining mechanism.

Adult Social Care Negotiating Body (ASCNB)

• While many of the details of the ASCNB have yet to be finalised, it is important that existing national collective bargaining arrangements in the local government sector are given due consideration. There is also no funding committed to cover the implementation costs for councils.
• A particular concern in this respect is that the SoS could make regulation on pay which doesn’t consider the wider reward packages available to local authority staff, including access to the Local Government Pension Scheme.
• It is important that local authorities can input to, and make representations on, proposed agreements. Clause 37 contains no requirement for the SoS to consult the ASCNB before making the regulations in the absence of ASCNB agreement.
• There is risk that any increased costs resulting from the ASCNB are passed back to councils, and that some providers may terminate contracts resulting in service disruption, where social care services are outsourced from councils.

Trade union reform

• The LGA believes that for there to be a mandate for industrial action, there should be a minimum turnout threshold. The removal of the current 50 per cent threshold should be replaced with and be set at 35 per cent.
• The LGA disagrees with the proposal the Government is consulting on to extend the ballot mandate from six to 12 months, given how councils often need to adapt rapidly to meet changing pressures on finances and demand for services.
• Having adequate time to prepare for industrial action is important for local and fire authorities, to enable them to prepare for the action and to ensure that critical public services continue to be delivered during the action.
• The LGA supported the revocation of Minimum Service Level rules that threatened to undermine these voluntary agreements. Seven days’ notice of industrial action will in many cases not be enough and employers and unions are now familiar with the 14-day notice period, and so there is logic in retaining the period of notice at 14 days.

‘Fire & Rehire’

• The use of what is often termed fire and rehire is rare in councils and is very much treated as a last resort. Councils will approach the option of fire and rehire with great care and will make every effort to avoid using it.
• Removal of the possibility of fire and rehire, without a replacement mechanism for making contractual changes, would impact on councils’ bargaining positions when they were seeking to agree changes. 

Zero hours contracts

• Zero hours arrangements are not common in the majority of local authority jobs. However, we are concerned for the impact of provisions to the use of on-call firefighters. The LGA believes that the “excluded workers” provisions are an important feature of the Bill and should be explicitly used for the fire service.

Overview

• The introduction of the Employment Rights Bill is a key area of interest for councils. With 1.4 million council employees in the sector and more than half a million teachers, firefighters and other local authority related personnel, local government can be said to be the largest workforce in the country and a pioneer of sectoral bargaining.
• The LGA manages the collective bargaining arrangements for around two million employees in the UK. Elected councillors and trade unions (and other employer representatives where appropriate) work together to reach collective agreements on key employment issues such as pay, terms and conditions. There are many areas of the draft legislation to which the LGA and our member councils can provide insight and assistance as the Bill continues its passage.
• It is vital that councils are properly resourced for the reforms in the Bill to be effective. LGA analysis shows that due to inflation and wage pressures alongside cost and demand pressures, English councils face a £2.3 billion funding gap in 2025/26 rising to £3.9 billion in 2026/27. This is a £6.2 billion shortfall across the two years. Chief among the wage related costs is the impact of the National Living Wage where funding from central to local government needs to fully reflect its commitment to the National Living Wage policy. Costs flowing from the proposals in this Bill will exacerbate this issue if not matched by increased funding to councils; in addition, if the legislation is not adapted to be workable in the local government context, the resultant bureaucratic and legal burdens will mean public money is diverted from service delivery.
• The Government needs to give clarity on whether councils will be protected from extra cost pressures from the increases to employer National Insurance contributions for directly employed and contracted out services.
• The LGA will work with partners and parliamentarians on the issues set out in this briefing, as well as on other points in the Bill. We are keen to work with the Department for Business and Trade to ensure the voices of councils, schools, fire authorities and other employers in the sector are heard.

Zero hours workers: Clauses 1 to 6

• Clauses 1 to 6 of the Bill deal with zero hours workers issues and will provide rights to guaranteed hours, reasonable notice of working hours and rights to compensation in some cases where shifts are cancelled, moved or curtailed. The right to guaranteed hours though will not apply in the case of an “excluded worker”, to be defined in further regulations (see new sub-sections 27BA(3)(d) and (10) of the Employment Rights Act 1996 at clause 1 of the Bill).

LGA view: Zero hours workers

• Zero hours arrangements are not common in the majority of local authority jobs but where the new rights are to apply, they will create considerable administrative demands on managers, Human Resources (HR) and payroll. Further, where they are used, it may be to fill roles where demand for work fluctuates over the year, for example in the case of school holiday clubs. It is important that the requirements both now and in future regulations, will be workable for councils and other employers, overall.
• One specific concern is the potential impact on the use of on-call firefighters in fire authorities. Those firefighters work on the basis that they are paid a basic annual retainer to provide a certain level of hours availability to work, but apart from regular training sessions and similar, they will then only be called upon to work at very short notice to deal with emergencies. Therefore, work is unpredictable, making it very difficult to see how guaranteed hours could be provided, at anything other than very short notice. We are of the view that the “excluded workers” provisions are an important feature of the Bill so that on-call firefighters and similar workers can be excluded from the zero hours worker requirements.

Statutory Sick Pay: Clauses 8 and 9

• Clauses 8 and 9 will mean that Statutory Sick Pay (SSP) will be payable from the first day of sickness absence. Related to that change, the qualifying Lower Earnings Limit (currently £123 per week) will be removed, and the rate of SSP will be the lower of £116.75 per week (subject to an annual review) or a “prescribed percentage” of the employee’s normal weekly pay.

LGA view: Statutory Sick Pay

• SSP being payable from the first day of sickness absence is unlikely to have much impact on the local authority directly employed workforce as most of those employees are already entitled to contractual sick pay from the first day of absence.
• SSP entitlements for lower paid workers is also not expected to have a substantial impact on local authorities, as lower-paid workers will already in many cases be entitled to contractual sick pay at full pay for periods ranging from one month up to six months.
• However, the SSP changes may have an impact in respect of some local authority workers, and on workers where work has been outsourced. Costs associated with these provisions in social care are likely to fall on local authorities as the costs are of commissioned services are affected.

Dismissal for failing to agree to variation of contract, etc.: Clause 22

• Clause 22 inserts a new section 104I into the Employment Rights Act 1996 to provide that a person will be regarded as automatically unfairly dismissed if they are dismissed due to the fact that the employer wanted to vary their contract but the employee refused or the employer wished to employ another person, or re-engage the employee, on a varied contract to carry out substantially the same duties as before the dismissal.
• There is an exception to this where the employer needs to vary the contract so that it could deal with any financial difficulties that were affecting (or imminently likely to affect) the employer’s ability to carry on the business as a going concern or to continue to carry on the activities constituting the business, and the employer could not have reasonably avoided the need to make the changes.

LGA view: Dismissal for failing to agree to variation of contract, etc.

• The use of what is often termed fire and rehire to effect changes to terms and conditions is rare in councils, and it is very much treated as a last resort.
• In councils, the reason for making such changes will typically be driven by the pressing need to address, for example, equal pay and equality issues though the introduction of a new pay and grade system, or as a consequence of factors outside the control of the employer, such as need to implement changes in the way that vital public services need to be delivered.
• Changes may also be needed sometimes to ensure financial budgets can be met. Underpinning this will be the need to deliver value for money to the taxpayer.
• Councils typically recognise trade unions for collective bargaining purposes and so terms and conditions in councils will normally be collectively agreed with unions. Therefore, where changes are required, councils will always seek to make them through agreement with recognised trade unions. Extensive efforts will be made to do that, involving often lengthy consultations processes with unions and employees, in some cases with Acas involvement.
• If agreement to the changes cannot be obtained through agreement with the unions, then councils might consider whether agreement could be obtained directly with individuals. However, that carries risks, particularly in terms of s.145B of the Trade Union and Labour Relations (Consolidation) Act 1992, which makes it unlawful for employers to bypass the union by offering new terms and conditions directly to employees who are union members.
• Therefore, councils will approach the option of fire and rehire with great care and will make great efforts to avoid using it. Nevertheless, in limited circumstances, it may be the only option left if one or more trade unions refuse to reach agreement to changes. Removal of the possibility of fire and rehire, without a replacement mechanism for making contractual changes, could discourage trade unions from engaging in meaningful negotiation around proposed changes leading to the retention of working practices.
• We are concerned that the limits which will be placed on the use of fire and rehire through the new clause 22 will in effect make the use of it in councils almost impossible. This is because the circumstances in which the exception to the right to claim automatic unfair dismissal applies in cases of fire and rehire are very limited. It appears to apply only where businesses are dealing with severe financial difficulties, and they need to make changes to employment contracts to allow them to cut costs to keep the business afloat.
• Those circumstances are very unlikely to apply in the case of councils. This is because while many councils are under severe financial pressures, it will be rare that they would be able to demonstrate that the financial pressures were such to fall into the category covered by the exemption. For them to do so, it is likely that the council would need to have issued a section 114 notice, which is a notice indicating that the council’s forecast income is insufficient to meet its forecast spending for the next year, and that it must take swift action to address the budget shortfall. The issue of such a notice carries serious consequences and, therefore, they will only be issued where absolutely necessary. Even if s114 notice was to be added to the exemption, this would not help councils in the majority of cases but would encourage unproductive or unequal situations to persist until the finances are affected to such a degree that a s114 notice was issued – this would be a very poor use of public money and resources.
• As currently drafted, fire and rehire will no longer be an option for councils, as it might still be for other employers. Importantly, it would impact on councils’ bargaining positions when they were seeking to agree changes in the first place, rendering agreements even harder to achieve.
• Instead, sub-section 104I(4) of the Employment Rights Act 1996 inserted by clause 22(3) of the Bill should be amended to insert a new provision providing that the automatic unfair dismissal protections will not apply where the reason for the variation of the contract was to ensure compliance with equality law duties, effect local government reorganisation or to ensure value for money in the delivery of public services. It should be noted that if such an amendment was made, the protections currently at subsections 104I(4)(b) and (5) would remain in place.

Procedure for handling redundancies: collective redundancy: Clause 23

• At present, the statutory collective redundancy obligations in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 are triggered where 20 or more dismissals are proposed within 90 days at one ‘establishment’, which in many cases can mean an individual workplace. Clause 23 of the Bill will change this so that the duties will be triggered with reference to the number of dismissals across the employer as a whole, not just at the relevant establishment.

LGA view: Procedure for handling redundancies: collective redundancy

• Local authorities always seek to comply with their collective redundancy consultation duties in a meaningful way and have well established processes. This will involve meaningful dialogue with the recognised trade union, as well as consultation with employees on an individual basis.
• The change in when the duties will be triggered will mean the statutory collective consultation duties are likely to be triggered more often in local authorities. This is because the employee workers across a wide range of functions and locations, which currently fall into the category of separate establishments. For example, schools will often be separate establishments, and so at present the duties are triggered with reference to those smaller groups.
• Crucially, decisions about proposed redundancies will often be made within the relevant establishment/function, albeit during consultation the wider position across the local authority will be considered, for example in terms of whether suitable alternative employment can be offered as a way of avoiding redundancies.
• While the change in the law will no doubt result in local authorities and other large employers putting procedures in place to try and ensure that a central record of the number of proposed dismissals across the employer is known, it must be recognised that at some times the duties may be inadvertently triggered, due to decisions on proposed dismissals being taken separately across various part of the authority. In such circumstances, it would be wrong for authorities to be unduly penalised for such inadvertent breaches, which in many cases will be minor as once it comes to light that that duties have been triggered, authorities will then take all reasonable steps to remedy the situation. We will make this point in our response to the consultation on strengthening remedies against abuse of rules on collective redundancy and fire and rehire.

Public sector outsourcing: protection of workers: Clause 25

• Clause 25 of the Bill enables the establishment in England of a ‘two-tier code’ in public sector procurement processes, where employees of a contracting public authority (which includes local authorities) are transferred to a contractor in an outsourcing process, a Minister of the Crown may by regulations specify that the outsourcing contract must ensure that:
• the transferring workers are treated no less favourably than they were as workers of the contracting authority; and
• the contractor’s workers “of a specified description” (to be confirmed) who did not transfer from the contracting authority are treated no less favourably than the contracting authority’s workers.

LGA comments: Public sector outsourcing: protection of workers

• From 2003 to 2011, ‘two-tier’ code type requirements applied to councils through the ‘Code of Practice on Workforce Matters in Local Authority Service Contracts’. The main feature of the Code required local authorities to specify in outsourcing tender contracts that employees hired by the successful contractor had to be provided with terms and conditions “no less favourable overall” to the TUPE transferred ex-public sector employees they would work alongside.
• If a new two-tier code is to apply to councils, it is important that its requirements are clear, workable and proportionate. To help ensure this, the LGA should be involved in the drafting of regulations, and any code of practice and guidance.
• It is anticipated the two-tier code will result in additional costs for councils. It is important that those costs are funded, otherwise service delivery will be adversely affected.

The School Support Staff Negotiating Body: Clause 28 and Schedule 3

• Clause 28 and schedule 3 will reinstate the School Support Staff Negotiating Body (SSSNB) and sets out the remit, powers and process for how it will work.
• An SSSNB was first introduced under the previous Labour government. However, that SSSNB was abolished before any such framework was implemented.
• The reinstated SSSNB will be comprised of representatives of employers (expected to include the LGA amongst others), representatives of support staff (unions), an independent chairperson and secretariat and Secretary of State (SoS) representatives.
• The details of the SSSNB’s remit will be set out in secondary legislation, which may provide for any specific categories of school support staff to be excluded. Unlike the previous SSSNB, the re-instated SSSNB will also apply to school support staff based in academies in England, as well as in local authority-maintained schools. The SSSNB will cover remuneration, terms and conditions, training, and career progression.
• Broadly speaking where the SSSNB and or the SoS determine that provisions within that remit should apply to school support staff, regulations will be made to implement the relevant provisions. Where an existing term is prohibited or inconsistent with an SSSNB/SoS provision, the Bill provides that the relevant term will no longer have effect. However, an SSSNB/SoS provision cannot be made which would reduce pay or be detrimental to existing terms and conditions.

LGA view: The School Support Staff Negotiating Body

• The LGA was involved in the previous SSSNB and currently manages the collective bargaining apparatus and employer sides for both support and teaching staff in schools, as well as other local authority employees. As such, it has a key role as the representative of councils in the reinstatement process, and as an employer side representative member of the SSSNB itself.
• School support staff are currently collectively bargaining nationally as part of the local government sectoral collective bargaining framework. This sets pay awards and some terms and conditions and other provisions for more than 1.4 million people and in addition to maintained schools, many academies and MATs also follow the agreements reached by the National Joint Council for local government.
• While many of the details of how the SSSNB will operate have yet to be finalised, it is important to note that due consideration of the consequences of the SSSNB on existing national collective bargaining arrangements in the local government sector is an important requirement, including in relation to equal pay. This is because school support staff in councils are currently performing roles in councils which have been rated as equivalent for equal pay purposes to other non-school support staff in the council, and so are being paid the same under existing collective bargaining arrangements.
• Should the SSSNB result in school support staff roles being paid more than other roles in the same employer who were previously carrying our work rated as equivalent, without any substantive change in the support staff roles meaning that the work was then of ‘higher value’, it would open the scope for equal pay claims from those in the other non-school support staff roles. In such a claim, the fact that roles had previously been rated as equivalent would be strong evidence of equal value, which the claimant(s) could rely on. While there may be some potential defences to those claims which could be considered, including whether the different rates of pay are justified, the fact that two or more groups of employees’ terms and conditions, including pay, are governed by different collective bargaining structures would not ordinarily provide a defence of itself. It is also important to note as well that since the case of North & Ors v Dumfries and Galloway Council (Scotland) [2013] UKSC 45, it is easier for employees working in different parts of an employer to bring an equal pay claim, using a comparator in another part of the employer.
• As well as those risks, councils could incur other costs through SSSNB/SoS ratified agreements that are not backed by funding. There will also be implementation costs for councils for which there is no funding currently committed.
• It is imperative that no agreements are forced on to councils for which funding would be required to be transferred from local authority budgets which are already severely stretched or that expose councils (and therefore local taxpayers) to legal risk. To help prevent this, the LGA suggests that provision is made to ensure that local authority employers hold the majority of seats on the SSSNB employer side as is the case for the existing collective bargaining mechanism for school support staff (through the National Joint Council for local government services).

The Adult Social Care Negotiating Body: Clauses 29 to 44

• Clauses 29 to 44 will establish an Adult Social Care Negotiating Body (ASCNB) and set out the broad remit, powers and process for how it will work. It will operate in a similar manner to the SSSNB, and it will cover the remuneration of social care workers terms and conditions of employment; and “any other specified matters relating to employment as a social care worker”.
• The details will be set out in secondary legislation, but clause 31 defines a social care worker as “a person who is employed wholly or mainly in, or in connection with, the provision of adult social care in England”. Subject to some exclusions, adult social care is then defined as including “any form of personal care or other practical assistance provided for individuals aged 18 or over who, by reason of age, illness, disability, pregnancy, childbirth, dependence on alcohol or drugs, or any other similar circumstances, are in need of such care or other assistance”. Potentially therefore the ASCNB will cover a wide range of employees and their employers, including local authorities and there directly employed staff.
• Broadly speaking where the ASCNB and or the SoS determine that provisions within that remit should apply to social care workers, regulations will be made to implement the relevant provisions. Where an existing term is prohibited or inconsistent with an ASCNB/SoS provision, the Bill provides that the relevant term will no longer have effect. However, an ASCNB/SoS provision cannot be made which would reduce pay or be detrimental to existing terms and conditions.

LGA comments: The Adult Social Care Negotiating Body

• Many of the issues we have set out on the SSSNB will apply to the ASCNB. If it will cover directly employed council staff, then due consideration of the consequences of the ASCNB on existing national collective bargaining arrangements in the local government sector is an important requirement, including in relation to equal pay. A particular concern in this respect is that the SoS could make regulation on pay which doesn’t consider the wider reward packages available to local authority staff, including access to the Local Government Pension Scheme.
• As well as those consequences and risks, a major concern is that councils could incur other costs through ASCNB/SoS ratified agreements that are not backed by funding.
• It is important that local authorities can input on and make representations on proposed agreements. They should in many cases be able to do this through representation on the ASCNB. However, a concern we have is that in the absence of ASCNB agreement, the SoS will still be able to make regulations binding the relevant employers (see clause 37). We recognise in some cases that might be necessary, but clause 37 contains no requirement for the SoS to consult the ASCNB before making the regulations. We submit there should be a requirement, as there is for the SSSNB (see new section 148K(5) of the Education Act 2002, inserted by Schedule 3 at page 121 of the Bill).
  • Text: 37(8) - "(8) Before making any regulations under subsection 37(2) the Secretary of State must consult the Negotiating Body."
• There will also be implementation costs for councils for which there is no funding currently committed.
• Finally, where social care services are outsourced from councils, there is the risk of any increased costs resulting from the ASCNB being passed back to councils, and some providers may terminate contracts resulting in service disruption.

Industrial action: ballots: Clause 54

• Clause 54 will remove the industrial action ballot threshold requirements, introduced under sections 2 and 3 of the Trade Union Act 2016. Those requirements are that at least 50 per cent of those eligible to vote must have voted and, in the case of important public services, which includes fire and rescue and education services, at least 40 per cent of those eligible to vote, must vote in favour of taking action. Prior to the 2016 Act there was no such turnout threshold, and all that was required was that a simple majority voted in favour of the industrial action.
• Related to this change, the government is consulting on whether the length of a ballot mandate should be extended from six to 12 months.

LGA view: Industrial action ballots

• It is important that trade unions have a meaningful mandate for their actions, including proposed industrial action. Evidence of such a mandate will demonstrate to employers the importance of the relevant issue to employees, which in turn will then help underpin negotiations with a view to reaching a constructive agreement. The LGA therefore believes that for there to be a mandate for industrial action, there should be a minimum turnout threshold, and so on the removal of the current 50 per cent threshold it should be replaced with a reasonable new threshold that provides sufficient assurance that any industrial action genuinely is the will of union members. We believe that threshold should be 35 per cent. That level is a reasonable balance between the interests of employers in ensuring that lawful industrial action cannot be taken without a reasonable level of employee support, and the interests of unions in ensuring they are able to take lawful industrial action without unreasonable hurdles being placed on them and their members.
• The LGA disagrees with the proposal to extend the mandate from six to 12 months. During the course of a year a lot can change, especially in councils which often need to adapt rapidly to meet changing pressures on finances and demand for services. Therefore, it is not appropriate that a ballot mandate should last for 12 months, it is highly likely that the surrounding circumstances underpinning the dispute on which the action was called will have changed. In such cases it is appropriate that the union should have to re-ballot if industrial action is to continue. The default expiration date of an industrial action ballot should remain as six months.

Industrial action: provision of information to employer: Clause 57

Clause 57 reduces the minimum notice period for industrial action that must be provided by the union to the employer from 14 to seven days before the action is due to start.

LGA view: Industrial action: provision of information to employer

• Having adequate time to prepare for industrial action is important for local and fire authorities, to enable them to prepare for the action and to ensure that critical public services continue to be delivered during the action. Part of that preparation will often include negotiating arrangements with the trade unions for cover to be provided by some of their members. The LGA supported the revocation of Minimum Service Level rules that threatened to undermine these voluntary agreements, but it remains important that sufficient space exists to have these vital discussions. These plans take time to agree, and seven days’ notice will in many cases not be enough. Employers and unions though are now familiar with the 14-day notice period, and so there is logic in retaining the period of notice at 14 days. Such a period does not undermine the ability of unions to take effective industrial action, as even where the employer has enough notice to be able to plan for it, the action will still cause disruption but not endanger the public.

Archie Ratcliffe, Public Affairs and Campaigns Advisor

Email: [email protected]