The government published the Employment Rights Bill in October, which is intended to help deliver economic security and growth to businesses, workers and communities across the UK.
The bill will bring forward 28 individual employment reforms, from ending exploitative zero hours contracts and fire and rehire practices to establishing day one rights for paternity, parental and bereavement leave for millions of workers. Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in. The existing two-year qualifying period for protections from unfair dismissal will be removed, ensuring that all workers have a right to these protections from day one on the job.
The government will also consult on a new statutory probation period for companies’ new hires. This will allow for a proper assessment of an employee’s suitability to a role as well as reassuring employees that they have rights from day one.
The bill will end exploitative zero hours contracts, following research that shows 84% of zero hours workers would rather have guaranteed hours. They, along with those on low hours contracts, will now have the right to a guaranteed hours contract if they work regular hours over a defined period, giving them security of earnings whilst allowing people to remain on zero hours contracts where they prefer to.
The bill will also:
- Change the law to make flexible working the default for all, unless the employer can prove it’s unreasonable;
- Set a clear standard for employers by establishing a new right to bereavement leave;
- Deliver stronger protections for pregnant women and new mothers returning to work, including protection from dismissal whilst pregnant, on maternity leave and within six months of returning to work;
- Tackle low pay by accounting for cost of living when setting the Minimum Wage and remove discriminatory age bands; and
- Establish a new Fair Work Agency that will bring together different government enforcement bodies, enforce holiday pay for the first time and strengthen statutory sick pay.
An Impact Assessment for the bill has been published suggesting the measures will impose a direct cost on business of up to £5 billion a year. It suggests that these costs are relatively modest since they estimate that the uplift in wage bill for employers in lower-paid sectors would be 1.5% at most. However, it also found that several of the measures will have a disproportionate impact on small and micro employers.
The government has launched consultations on 4 areas of the proposed legislation, which will be incorporated as amendments to the bill in the early part of 2025. In the meantime, the bill is at committee stage in Parliament, where it is being given a detailed examination.
Employers should prepare by looking at how the bill will affect their employment procedures and budgeting for any increased costs.