UK Employment Rights Bill - What It Means for Your Business
The Government has today published draft legislation outlining changes to the Employment Rights Bill, following through on its promise to implement their Make Work Pay plans “within 100 days of entering government”.
The Employment Rights Bill covers 28 of the around 70 proposals in Labour’s Make Work Pay scheme.
However, the Government has confirmed that the majority of reforms will not take effect until 2026 as they will consult with businesses and the reform needs to go through secondary legislation.
The bill will bring forward individual employment reforms, from ending exploitative zero hour contracts and fire and rehire practices as well as establishing day-one rights for paternity, parental and bereavement leave.
Make Work Pay was a key component of Labour’s manifesto in the general election and is being overseen by Deputy Prime Minister Angela Rayner. Today is the first time the government has specified details of the scheme since gaining power.
What Employment Rights Bill means for CEOs
The Employment Rights Bill is set to introduce a whole raft of employment law legislation, including tightening up grounds for dismissal during probation, more generous parental leave and strengthening the case for flexible working.
Nine-month probation period?
Ministers are due to consult on the maximum length of the employee probation period but according to officials they are leaning towards selecting nine months - this is much longer than the originally proposed axing of the probationary period altogether.
Terminating new joiners
UK CEOs will be able to fire new recruits after providing them with a warning during this purported nine-month probation period, a change from Labour’s original plans to give workers unfair dismissal rights from “day one”.
Until now, bosses have been able to let new recruits go without any warning providing they are still in their probation period.
Ministers have said this will benefit about nine million workers who have been with their current employer for less than two years.
However, if a worker is let go within those nine months, it is unclear under what circumstances they could still make a claim for unfair dismissal and when they cannot.
Zero-hours contracts
While workers can stay on zero-hours contracts if they’d prefer to, they now have the right to a guaranteed-hours contract if they work regular hours over a defined period.
Fire-and-rehire
The bill will shut down loopholes that allow unscrupulous employers that allow fire-and-rehire or fire-and-replace practices.
Statutory sick pay (SSP)
Statutory sick pay (SSP): Workers will be entitled to SSP, external from the first day they are ill, rather than the fourth day.
Lower earnings limit for SSP
Currently, workers earning less than £123 per week cannot claim SSP. This limit will be removed but the bill will set out a lesser level of sick pay for lower earners.
Paternity leave
Fathers or partners to be eligible from day one of employment, instead of 26 weeks.
Unpaid parental leave
Parents will be eligible from day one of employment for unpaid parental leave, instead of one year.
Unpaid bereavement leave
This will become a “day one” right for workers.
Flexible working
Bosses will be expected to consider any flexible working requests made from day one, and say yes unless they can prove it is unreasonable. There are eight grounds they could give for refusing a request, relating to impact on the business.
Fair Work Agency
As part of the overhaul of workers rights, the Government is also planning to set up a new Fair Work Agency (FWA) which will be given the power to issue fines “in the low thousands” and bring prosecutions to businesses that do not conform with reformed workers rights laws.
Tacking job insecurity
Ms Rayner said: “The UK’s out-of-date employment laws are holding our country back and failing business and workers alike. Our plans to make work pay will deliver security in work as the foundation for boosting productivity and growing our economy to make working people better off and realise our potential.”
Business Secretary Jonathan Reynolds told BBC Radio Four’s Today programme the bill would “be a significant change tackling insecurity” and “level the playing field towards the best employers”.
Caspar Glyn KC, chairman of the Employment Lawyers Association, said: “Labour is trying to navigate a tricky tightrope to strengthen workers’ rights without creating undue costs and restrictions on businesses.
“Companies will want to have sufficient time to ensure they can dismiss employees who are unsuitable… if they feel unable to remove workers who are not a good fit, then businesses will hire more slowly and conduct more checks before bringing someone on board, which could have negative repercussions for the labour market.”
Mr Reynolds responded to criticism that said he was “knocking businesses in the kneecaps” today.
He told BBC Radio 4’s Today programme: “I reject that entirely and I think to be honest a lot of those points remind me of things around the introduction of the minimum wage, which again were not found to be true once it came in. On zero-hours contracts, where a worker works a regular number of hours, they do deserve a contract that reflects those hours.”
Employment Rights Minister Justin Madders said: “We know that most employers proudly treat their staff well. However, for decades as the world of work has changed, employment rights have failed to keep pace, with an increase in one-sided flexibility slowing the potential for growth in the economy.”
He added: “The steps we’re taking today will finally right these wrongs, working in partnership with business and unions to kickstart economic growth that will benefit them, their workers and local communities.”
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