On 10 October 2024, the UK government unveiled the Employment Rights Bill, which introduced significant reforms aimed at enhancing worker protections.
The government has positioned this legislation as a ‘pro-business, pro-worker’ initiative with some of the key changes including:
Day-one employment rights
Employees will have the right to unfair dismissal protection from their first day of employment, eliminating the current two-year qualifying period. However, the bill allows for a potential probationary period during which different dismissal rules may apply.
Zero-hours contracts
While zero-hours contracts are not entirely banned, the bill introduces requirements for employers to offer a guaranteed hours contract based on regular working patterns. Workers will also be entitled to reasonable notice of shift changes.
Ban on “fire and rehire”
The bill seeks to make it automatically unfair to dismiss employees if they refuse to accept contract changes, addressing the controversial practice of firing employees only to rehire them under worse terms.
Flexible working
Flexible working will become the default, and employers will be required to provide detailed explanations for any refusal of a request for flexible work.
Strengthened family leave
The bill expands family leave rights by removing qualifying periods for paternity and parental leave, and introducing stronger protections for pregnant workers and those returning from family-related leave.
Statutory sick pay
Changes will make statutory sick pay available from the first day of illness, and the lower earnings limit for eligibility will be removed.
Trade unions
The bill enhances trade union rights, such as workplace access, and repeals restrictive elements from previous legislation, including parts of the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023.
Enforcement
A new labour enforcement body, the Fair Work Agency, will consolidate existing agencies to ensure compliance with employment laws, particularly around pay and working conditions.
These reforms are expected to be rolled out gradually, with some changes taking effect by 2026. The bill is part of the broader ‘Plan to Make Work Pay’ initiative by the Labour government, which emphasizes fairer employment practices and greater worker protections.
Make Work Pay
The government’s ‘Plan to Make Work Pay’ is central to its mission of driving economic growth, improving living standards nationwide, and creating opportunities for everyone. The initiative aims to address issues such as low wages, poor working conditions, and job insecurity, which have been hindering economic progress, through helping more people retain their jobs, improve job stability, and elevate living standards.
The Plan to Make Work Pay will be rolled out in phases, including revising the Low Pay Commission’s mandate to consider the cost of living when setting minimum wage rates. Age-related pay bands will also be abolished. The government announced the repeal of the Strikes (Minimum Service Levels) Act 2023 and confirmed, following a High Court ruling, that employment agencies cannot supply workers to replace those involved in strikes or industrial action.
Response to the Employment Rights Bill
Response to the bill has generally been favourable from all stakeholders such as the CBI, who commented that the government should be recognised for its openness to collaborating with both businesses and unions with a cooperative approach to identifying the best path forward, ensuring improved living standards while avoiding the negative outcomes that businesses have cautioned against.
Working Families, a national charity for working parents and carers, also noted that they were encouraged by the positive outlook brought by the transformative changes proposed in the upcoming bill, which could greatly benefit millions, but warned that it was crucial that the government continues the constructive dialogue to ensure the final details of this important bill are thoroughly refined.
Trade unions were more sceptical however, stating that the proposal had “more holes than Swiss cheese” and the government had tied itself up in knots trying to avoid what was promised.
Many employers are also worried the changes could increase costs and reduce hiring. Plus, the expansion of trade union rights, such as greater access to workplaces, is causing concern among industries with traditionally low union membership, like tech.
Balance of power
Traditionally, employers hold more power because they control important elements such as job opportunities, pay and working conditions. However, various factors, including labour laws, trade unions and collective bargaining, play critical roles in redistributing this power and protecting employees from exploitation. This bill will shift the balance of power towards workers as it addresses some of the ‘bad’ practices undertaken by some employers.
The bill still doesn’t address issues highlighted by the P & O sacking scandal in 2022, as the ferry service provider essentially ‘settled’ with their workers which is difficult to prevent. However, the new bill does seem to benefit good employers to compete on quality and innovation, rather than a race to the bottom, which has been the theme for a number of years.
Small businesses, already struggling with tight profit margins, are most likely to feel the brunt of these changes as it could push up costs as well as enforce a freeze on recruitment. The proposals for expanded trade union rights, including greater access to workplaces, are particularly worrying for firms in the technology industry and other areas with historically low union membership rates.
The government’s decision to consult on many of the proposed reforms shows a pragmatic approach, but there is concern that increased regulation might hinder productivity rather than lead to a more buoyant economy. Additionally, what is described as pragmatism may also come across as uncertainty.
This post was originally published on here
