Employment Rights Bill
An overview of the proposed changes and what this means for employers and workers.
Overview
On 10th October 2024, the Labour Government announced the new Employment Rights Bill as part of the UK Government’s ‘Make Work Pay’ plan.
Although many of the changes will be subject to consultations that may see implementation delayed for two years, the Employment Rights Bill aims to enhance worker protections and flexibility and represents the biggest upgrade to rights at work for a generation.
The purpose of this document is to outline the proposed changes in legislation and what this means for both employers and workers.
Labour’s Employment Rights Bill: The Headlines
Day-One Rights
Unfair Dismissal: Employees will be protected against unfair dismissal from their first day, unlike the current two-year requirement.
Parental Leave: Day-one rights for paternity leave and unpaid parental leave.
Bereavement Leave: Requirement for employers to have a policy on bereavement leave.
Sick Pay
Universal Entitlement: Employees will receive statutory sick pay from the first day of illness, removing the three ‘waiting days’.
Lower Earnings Limit Removal: Sick pay eligibility will no longer depend on a lower earnings limit (currently average earnings of at least £123 per week).
Probation
Statutory Probation Period: A statutory probation period will be introduced, with a maximum of nine months. Employers will have a “lighter touch” approach during this period but must still handle dismissals fairly.
Zero-Hours Contracts
Guaranteed Hours: Employees on zero-hours contracts can request guaranteed working hours if they work regular hours over a specified period.
Flexibility: Employees have the right to remain on zero-hours contracts if preferred.
Fire and Rehire
Ban: Fire and rehire practices will be banned except in extreme circumstances, requiring employers to seek alternatives to changing terms and conditions.
Flexible Working
Default Flexible Working: Flexible working will become the default where practical, necessitating adjustments to work arrangements.
Gender Pay Gap Plans: Employers must create action plans to address gender pay gaps and support for female employees through menopause.
Pregnancy Protections: Stronger protections against dismissal during pregnancy and after maternity leave.
Enforcement
Fair Work Agency: Establishment of the Fair Work Agency to enforce rights, requiring employers to stay updated and compliant with regulations.
Minimum Wage
Cost of Living Consideration: Low Pay Commission to consider the cost of living when setting minimum wage, potentially leading to wage increases for younger workers.
Removal of Wage Bands: Elimination of age bands for the minimum wage, ensuring equal pay for all ages.
Trade Unions
Union Rights: New rights to online balloting will be introduced, and certain union restrictions enacted by the current government will be opposed or modified.
Beyond the Bill: Additional Proposals
Moving on from the Bill, the Government also plans to implement the following, subject to consultation:
Right to Switch Off: Guidance will be provided on preventing employees from being contacted outside working hours.
Pay Discrimination: Future legislation will address pay discrimination and require reporting of ethnicity and disability pay gaps for larger employers.
Single Worker Status: A move towards a single status of worker, which might lead to significant changes in worker classification.
Parental leave and carers leave systems: A review of parental leave and carers’ leave systems to ensure they are delivering for employers and workers.
We hope that you have found this a useful overview of the proposed changes and what this means for employers and workers.
These changes will require employers to update their policies, procedures, and employment contracts to ensure compliance with the new regulations.
We will be closely monitoring these changes to legislation as they are consulted on. Please do get in touch if you require any further advice or support.