Summary of the Employment Rights Bill: Key Implications for Businesses & HR Professionals

The Employment Rights Bill introduces significant changes to employment law in the UK, impacting HR policies and procedures across various sectors. The long-awaited legislation is expected to return to the Commons for report stage and its third reading at a later date, which will see MPs debate the bill and suggest amendments.

Below is a breakdown of key provisions and their implications for HR professionals.

1. Zero-Hours Workers & Shift Work

Right to Guaranteed Hours: Employers must offer guaranteed hours to workers who have worked a certain number of hours over a reference period.

Shift Work Protections:

• Employers must provide reasonable notice of shifts.
• Workers are entitled to compensation if shifts are cancelled, moved, or curtailed at short notice.
• Repeal of the Workers (Predictable Terms and Conditions) Act 2023: This suggests a shift towards stronger protections for workers with uncertain work patterns.

The Employment Rights Bill will have a notable financial impact on businesses, particularly in areas such as payroll, HR operations, and compliance costs.

Key areas where businesses may incur additional financial burdens include:

Increased Labour Costs

• Guaranteed Hours for Zero-Hours Workers: Employers must offer guaranteed hours based on a worker’s reference period, potentially increasing wage costs.
• Compensation for Cancelled or Changed Shifts: Employers will have to pay workers for shifts that are cancelled or altered on short notice.
• Higher Statutory Sick Pay (SSP) Costs: The removal of the waiting period and lower earnings threshold means more employees will be entitled to sick pay from day one.

??Impact on HR: HR teams will need to review and update policies on shift allocation, ensure compliance with guaranteed hours requirements, and introduce clear protocols for shift cancellations to avoid penalties.

2. Flexible Working Rights

• Right to Request Flexible Working: Strengthens employees’ rights to request flexible work arrangements.

Compliance & Legal Costs

• Stronger Harassment Protections: Employers must take “all reasonable steps” to prevent sexual harassment, which may require investment in training programmes, updated policies, and legal consultations to ensure compliance.
• Greater Enforcement & Penalties: Government agencies will have enhanced powers to investigate and fine businesses that fail to comply with employment regulations, increasing the risk of litigation and tribunal claims.

??Impact on HR: Policies on flexible working will need updates, and HR will have to ensure fair and transparent decision-making processes for requests. Increase training in sexual harassment.

3. Statutory Sick Pay (SSP)

• Removal of the SSP Waiting Period: Employees will receive SSP from day one of their absence.
• Lower Earnings Limit Removal: More workers will qualify for SSP.

Administrative & HR System Changes

• HR Policy Overhaul: Employers will need to revise contracts, leave policies, and dismissal procedures to align with the bill’s changes.
• Payroll Adjustments: Ensuring compliance with new leave entitlements, redundancy rules, and flexible working requests may require HR software updates and payroll system modifications.

??Impact on HR: Increased costs for employers and the need for payroll adjustments. Absence management policies should be revised.

4. Entitlements to Leave

• Parental & Paternity Leave: Removal of qualifying period, meaning employees gain entitlement immediately upon starting employment.
• Paternity Leave Flexibility: Can be taken after shared parental leave.
• Bereavement Leave: Strengthened statutory rights.

??Impact on HR: Leave policies and HR systems will need updates to reflect new entitlements.

5. Protection from Harassment

• Employer Duties: Employers must take “all reasonable steps” to prevent sexual harassment.
• Third-Party Harassment: Liability extends to harassment by customers, clients, or suppliers.
• Whistleblower Protections: Enhanced for those reporting harassment.

??Impact on HR: Employers must implement stronger anti-harassment policies, provide training, and ensure robust reporting mechanisms.

6. Dismissal Protections

• Unfair Dismissal: Removal of the qualifying period, meaning all employees gain protection from day one.
• Pregnancy & Family Leave: Enhanced protections against dismissal during and after leave.
• Contract Variations: Protection for employees who refuse detrimental contract changes.

??Impact on HR: HR must ensure dismissal decisions are fully justified and documented to avoid legal risks.

7. Redundancy & Outsourcing

• Extended Collective Redundancy Requirements: More situations will require collective consultation.
• Public Sector Outsourcing Protections: Additional rights for workers affected by outsourcing.

??Impact on HR: Employers will need more rigorous redundancy consultation processes and must ensure fair treatment of outsourced workers.

8. Pay & Conditions in Specific Sectors

• School Support Staff & Social Care Workers: New national negotiating bodies to determine fair pay and conditions.
• Seafarers’ Wages: Stronger protections and alignment with international standards.

??Impact on HR: HR in these sectors will need to engage with sector-specific wage regulations and workforce planning.

9. Trade Union & Industrial Action Reforms

• Union Access Rights: Strengthened rights for trade unions to engage with employees.
• Electronic Balloting for Strikes: Introduction of online voting.
• Protection Against Dismissal for Strike Action: Stronger legal safeguards for workers participating in industrial action.

??Impact on HR: HR teams must prepare for increased union engagement and possible industrial action, ensuring compliance with new regulations.

10. Labour Market Enforcement & Compliance

Stronger Enforcement Powers: Government agencies will have enhanced powers to investigate and enforce employment law compliance.

Increased Fines & Penalties: For non-compliance with labour market regulations.

??Impact on HR: HR teams must ensure compliance with employment laws, particularly around pay, working conditions, and dismissal procedures to avoid enforcement actions.

??Key Takeaways for HR Professionals

• Greater Employee Protections: Stricter regulations around zero-hours contracts, shift work, and unfair dismissal require updated HR policies.
• Flexibility & Leave Adjustments: HR teams must ensure compliance with new statutory leave entitlements and flexible working rights.
• Harassment Prevention is Critical: Employers will need stronger anti-harassment measures, including third-party protections.
• Union Relations & Industrial Action: HR teams should prepare for more active trade union engagement.
• Compliance is More Important Than Ever: Stronger enforcement mechanisms mean non-compliance could lead to severe penalties.

??HR professionals should review employment policies, update contracts, provide training, and ensure robust legal compliance to align with the changes in this bill.

AI can significantly aid HR professionals in ensuring compliance with the new Employment Rights Bill

AI can significantly aid HR professionals in ensuring compliance with the new Employment Rights Bill by automating monitoring, reporting, and risk mitigation. AI-powered HR compliance platforms can track employment law updates, flag non-compliant policies, and generate real-time alerts for shift notice requirements, guaranteed hours, and redundancy procedures. AI-driven document automation can ensure employment contracts, leave policies, and dismissal notices align with legal requirements.

AI-powered chatbots can provide instant responses to employee queries about rights and entitlements, reducing HR workload. Predictive analytics can also identify harassment risks, pay discrepancies, and unfair dismissal trends, enabling proactive intervention.

Implementing AI solutions will help HR teams maintain compliance, minimise legal risks, and improve operational efficiency while adapting to evolving employment regulations.

?How Businesses Can Mitigate Costs

• Leverage AI & HR Tech: AI-driven HR tools can automate policy updates, compliance tracking, and payroll calculations, reducing administrative overheads.
• Legal & HR Audits: Conducting regular compliance reviews can prevent costly tribunal claims and fines.
• Workforce Planning: Reviewing shift scheduling and redundancy strategies can help optimise labour costs under the new regulations.

?Would you like help with specific policy updates or training materials related to this bill? If yes, contact me via DM

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