Employment Rights Bill

The King’s Speech outlined the government’s priorities for the new parliamentary session and introduced new legislative plans. Many of the proposed bills build upon Labour’s agenda for working people, with a significant focus on employment law. These bills aim to make work more secure by enhancing employment rights, banning exploitative practices, and increasing wages. But what exactly do these changes involve?

Banning Exploitative Practices:

As anticipated from their manifesto, Labour has set out a plan to provide workers on zero-hour contracts with more rights and to ban exploitative zero-hour contracts. While further details on what constitutes an exploitative zero-hour contract are yet to be outlined, we can expect an end to one-sided flexibility. ?Workers on zero-hour contracts will have the right to request a more stable hours pattern and a contract that reflects their regular work patterns. They may also expect more security regarding notice periods, shift changes, and compensation for cancelled or curtailed shifts.

Another exploitative practice set to end is the current practice of fire and rehire. Labour will reform existing legislation to restrict its use by employers. This change aims to provide workers with greater security, ensuring that their negotiated contracts cannot be easily thrown away under threat of dismissal.

Enhancing Rights:

Several employment rights currently require qualifying periods of service before they take effect. To enhance rights and protect workers, the new employment rights bill proposes removing qualifying periods and introducing day-one rights. Changes will affect areas such as unfair dismissal, parental leave, parental pay, and sick pay. Unfair dismissal currently has the longest qualifying period of two years, which was extended in 2021. However, unfair dismissal will remain subject to a probation caveat, meaning that many employers may look to extend probation periods to cover themselves since the two-year grace period will no longer apply.

Sick pay is currently available only to those earning above the lower earnings limit and on the fourth day of incapacity. The new bill aims to remove the lower earnings limit and shorten the qualifying period to one day. Both parental leave and parental pay will become day-one rights, removing specific employment and due date requirements.

Boosting Wages:

In addition to legislative changes, Labour intends to boost wages by delivering a real living wage and revising the national minimum wage. They plan to introduce a cost-of-living adjustment to the national minimum wage to ensure fair compensation in the current market. Furthermore, they are considering revising and potentially removing the age-banding criteria for the national minimum wage. This will benefit the younger workforce, currently disadvantaged by age-banding. However, it will increase costs for many employers and businesses, particularly those with a young workforce.

Although many of the new bills seem like a positive change for workers, they will have varying impacts on businesses. Upon commitment, many employers will need to review and change their current policies to ensure they are prepared for any upcoming or current new starters and additional costs.

What do you think about the new employment bills?