On the 10th of October 2024, the UK Government introduced the Employment Rights Bill, a pivotal piece of legislation designed to modernise workplace protections and create a more equitable and inclusive labour market.
This extensive reform aims to reshape workplace policies for both employers and employees, prioritising stability, equality, and flexibility in the workplace. As the Bill progresses through Parliament, it is crucial for businesses and employees to understand its potential effects and prepare accordingly. This blog is designed to help you navigate the landscape ready for the potential changes ahead.
What is Labour’s new Employment Rights Bill?
The Employment Rights Bill is an ambitious and comprehensive proposal designed to overhaul the UK’s labour laws. Introduced as part of Labour’s “Plan to Make Work Pay,” the Bill addresses key employment challenges such as job instability, workplace harassment, and gender disparities. Its core provisions include guaranteed hours for zero-hours workers, expanded rights to flexible working, and protections from unfair dismissal from day one of employment.
The government has described this Bill as “the biggest upgrade in employment rights for a generation,” aimed at raising living standards, supporting fair business practices, and fostering inclusive economic growth.
When will the new Employment Rights Bill be introduced?
The Bill was presented in the House of Commons on the 10th of October 2024, and is currently proceeding through the parliamentary process. If approved, the reforms are expected to take effect no earlier than 2026, allowing businesses a fair amount of time to prepare for the new regulation’s changes.
The main changes for employers
There are several significant reforms that employers will need to prepare and adapt to, including:
- Regulating zero-hours contracts: Employees who consistently maintain the same working hours over a 12-week period will be entitled to guaranteed hours. Additionally, employers must provide reasonable notice of shifts and compensate workers for last-minute cancellations.
- Unfair dismissal protections: Employees will gain immediate protection from unfair dismissal from their very first day of work, although a statutory probation period (proposed to be nine months) will allow for a structured and streamlined dismissal process during this time.
- Flexible working as a default: Employers must be transparent and provide clear, reasonable justifications when denying flexible working requests.
- Restrictions on fire-and-rehire tactics: Dismissals aimed at forcing employees to accept less favourable contract terms will be deemed automatically unfair unless the business is facing extreme financial distress.
- Increased employer responsibility for workplace harassment: Employers will face stricter obligations and accountability to prevent workplace and third-party harassment.
- Enhanced reporting obligations: Larger employers may need to create equality action plans addressing things like gender pay gaps and menopause support, while also strengthening gender pay gap reporting for outsourced workers.
Key benefits for employers
While the Bill introduces stronger worker protections, it also offers several advantages for employers, including:
- Increased workforce stability: By ensuring fairer contracts and greater job security, businesses can reduce employee turnover, leading to a more stable and committed workforce.
- Enhanced productivity and employee satisfaction: Improved working conditions, flexible work arrangements, and fair treatment can lead to higher productivity and morale, benefiting overall business performance.
- Reduced legal risks: Clearer employment regulations will help businesses avoid costly legal disputes related to unfair dismissals, workplace harassment, and contractual disputes.
- Positive employer branding: Companies that comply with and champion fair employment practices may enhance their reputation, attracting top talent and boosting customer trust.
- Stronger economic growth: A fairer and more transparent labour market can contribute to a healthier economy, benefiting businesses by increasing consumer spending and overall market stability.
The main changes for employees
The Bill introduces several substantial benefits for employees, including:
- Immediate employment protections from day one: Employees will be entitled to unfair dismissal protection, parental leave, and statutory sick pay without any minimum earnings threshold.
- Enhanced sick pay: Statutory Sick Pay (SSP) will be available from the first day of illness, and the lower earnings threshold will be removed to broaden accessibility.
- Shift security for zero-hours workers: Workers on zero-hours contracts will gain greater predictability in their work schedule when working the same number of hours over a 12-week period. Additionally, there will be protections against last-minute changes, giving you much more stability.
- Flexible working as a presumptive right: Employees will have the default right to request flexible working, and employers must provide a transparent, reasonable explanation for any rejections.
- Better protection against workplace harassment: Employers will be legally required to implement preventative measures against workplace harassment.
- Parental leave flexibility: Paternity and unpaid parental leave will become available from day one of employment, with added flexibility for paternity leave following shared parental leave arrangements.
How can we help?
Although the Employment Rights Bill is not yet enacted into law, it does represent a significant shift in the UK’s employment landscape. At this point, employers should review their contracts, policies, and workplace practices to ensure they comply with the proposed changes when they come into effect. For employees, these reforms promise a more stable and equitable working environment.
If you have any questions about how the Employment Rights Bill might impact your business or employment, our expert legal team at Scott Bailey is here to help. Contact us today for tailored advice.
