NEW EMPLOYMENT RIGHTS BILL LANDS
The worst kept secret in employment law is out, the Government has now formally announced the publication of the Employment Rights Bill. After setting themselves the target of 100 days, they have met that with just a couple days to spare.
Whilst we await the actual draft legislation, the Department for Business and Trade has released their press release this morning to launch much of the headlines with the full 158 page Bill now available to dissect here
“The legislation is being hailed as the most significant reform in a generation, covering a wide array of issues such as zero-hour contracts, redundancy protections, and working conditions for gig economy workers.”
The legislation is being hailed as the most significant reform in a generation, covering a wide array of issues such as zero-hour contracts, redundancy protections, and working conditions for gig economy workers.
As the UK economy and labour market have evolved over the last decade, the need for reform has become increasingly clear. “Exploitative” practices such as "fire and rehire" and insecure work have exposed gaps in the current framework, which the Government says this bill will address head-on. The bill forms part of the Government’s wider "Make Work Pay" programme, aimed at ensuring that employment conditions in the UK reflect a fair balance between business flexibility and worker security.
Key Features of the Employment Rights Bill
There are 28 individual areas of reform but we have outlined the most impactful here:
Ending Exploitative Zero-Hour Contracts
One of the headline reforms is the move to end zero-hour contracts, a “hot topic” employment model that has been criticised for creating job insecurity. Under the new bill, workers will have greater control over their working hours and will be entitled to predictable working patterns. This builds on recent legislation, such as the Workers (Predictable Terms and Conditions) Bill, which grants individuals on atypical contracts, like zero-hour agreements, the right to request more predictable hours.Protection Against Unfair Dismissals
The new bill extends "day one" protection from unfair dismissal, a significant shift aimed at addressing the vulnerability of employees in their early stages of employment. Traditionally, employees had to work for two years before acquiring this protection, but the bill brings this forward to cover all workers from the start of their contracts. However, there will be consultations over the introduction of a maximum 9 month probationary period.New Fair Work Agency
As anticipated the new agency with responsibility for protecting workers and their rights will be established. For a more detailed assessment of the agency, see our article here.Eliminating ‘Fire and Rehire’ Practices
One of the most anticipated reforms is the introduction of legislation that effectively bans "fire and rehire" practices, except in circumstances where employers can demonstrate no viable alternative. This provision aims to stop employers from using termination as a tool to impose less favourable terms on workers.Sick pay
Statutory sick pay will be changed, removing the lower earnings limit for all workers and scrapping the three-day waiting period before it begins.Future changes
As the Government say “The Make Work Pay Plan doesn’t stop with this bill.” Future flags for reform include employment status, race pay gap reporting, and the Right to Switch Off. With so much change ahead, some of these very technical questions will have to wait.
When will the new rules apply from?
A key question for everybody! We’re afraid there isn’t a simple answer. The Bill will be subject to debate, and its expected many elements will be subject to consultation with industry and unions. However, the best guess is October 2026, which suggests some time for adjustments.
Business Reactions
The government has engaged closely with business leaders throughout the drafting of this bill, and consultations are ongoing and will be absolutely necessary to get these changes right. Ministers have reassured businesses that their voices will be heard, acknowledging that while reforms are necessary, they will strive to balance worker protections with the need for business flexibility and growth.
“For businesses, these changes will mean increased compliance obligations, particularly around probation, employment contracts, and redundancy processes. Some industry groups have expressed concern about the potential costs.”
For businesses, these changes will mean increased compliance obligations, particularly around probation, employment contracts, and redundancy processes. Some industry groups have expressed concern about the potential costs. The chair of policy and advocacy for the Federation of Small Business, said: “This legislation is a rushed job; clumsy, chaotic and poorly planned – dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.”
Others have welcomed the predictability and fairness these measures could bring, particularly in relation to worker retention and morale.
“The Employment Rights Bill will first be debated in Parliament on 21 October 2024, where we expect further details to be explored, especially concerning the scope of the protections and the specific mechanisms for enforcement. We will follow these developments closely and publish more insights on the final provisions of the bill…”
Next Steps
The Employment Rights Bill will first be debated in Parliament on 21 October 2024, where we expect further details to be explored, especially concerning the scope of the protections and the specific mechanisms for enforcement. We will follow these developments closely and publish more insights on the final provisions of the bill once it progresses through Parliament.
Looking Ahead
Next week, we will delve into some of the more technical aspects of the bill, including the compliance requirements for businesses and how the new redundancy and dismissal protections could reshape employment practices. We will also explore the bill's potential impact on the gig economy and what businesses should do to prepare for these changes.
Stay tuned for our detailed analysis after the first Parliamentary debate on 21 October 2024. We’ll break down the key takeaways and provide guidance on how employers can adapt their policies to comply with the new legislation.