On 10th October, Labour met their first manifesto promise to develop their Employment Rights Bill within the first 100 days of office. The Bill brings forward 28 individual reforms.
What does the Bill include?
Basic rights from day one
- Employees will have protection against unfair dismissal from day one.
- In addition, the bill will establish rights to bereavement, paternity and parental leave. It will strengthen statutory sick pay, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in.
- A statutory probation period will be introduced for companies’ new hires which will allow for a proper assessment of an employees’ suitability for a role. The length of the probation period is yet to be consulted on, but the government’s preference is 9 months.
- Ending fire and rehire or fire and replace: The Bill will shut down loopholes that allow bullying fire and rehire and fire and replace to continue, meaning employers will no longer be able to fire and rehire on less favourable terms.
Ending unfair practices
- Zero-hour contracts: while workers can remain on zero-hour contracts if they prefer to, the Bill means they will have the right to a ‘guaranteed hours’ contract if they work regular hours over a defined period.
- Employees will require reasonable notice of shifts and compensation for shift cancellation, movement and curtailment at short notice for those on zero and other specified contracts.
- Flexible working will be the default unless employers can provide a clear and reasonable cause for refusal.
- Fair pay agreements: This will aim to establish minimum pay standards and working conditions across various sectors, although it will be initially targeted at the adult social care sector.
Trade unions and industrial action
The Bill removes restrictions on trade unions, giving them greater freedom to organise, represent and negotiate on behalf of their workers.
Fair Work Agency
The Fair Work Agency will be a new body, established under the Employment Rights Bill, designed to oversee the enforcement of labour market legislation and ensure compliance with employment rights.
‘Next Steps’
The Make Work Pay Plan doesn’t stop with this bill. As an outlook to the future, the government has also published a ‘Next Steps’ document outlining reforms they will look to implement in the future. Subject to consultations, this includes:
- A right to switch off, preventing employers contacting employees out of hours, except in exceptional circumstances.
- A strong commitment to end pay discrimination by expanding the Equality (Race and Disparity) Bill to make it mandatory for large employers to report their ethnicity and disability pay gap.
- A move towards a single status of worker and transition towards a simpler two-part framework for employment status.
- Reviews into the parental leave and carers leave systems to ensure they are delivering for employers, workers and their loved ones.
Timelines
The bill was introduced into the House of Commons on 10 October 2024. As is typical for employment legislation, further detail on many policies in the bill will be provided through regulations after Royal Assent. The government will begin consulting on the majority of these reforms in 2025, seeking significant input from all stakeholders. For some areas, they will be consulting before the end of the year, including on applying the zero-hours measures to agency workers; modernising trade union legislation; and Statutory Sick Pay.
The government will ensure businesses have time to prepare for the implementation of these reforms and expect that most reforms in the bill will take effect no earlier than 2026. Where more time is needed for businesses to prepare for change, this will be taken into consideration. The government will also publish guidance where this is appropriate.
Useful links
Employment Rights Bill factsheet
Adult Social Care negotiating body
Bereavement, Paternity and unpaid leave
Fair Work Agency
Fire and rehire
School Support Staff Negotiating Body
Statutory Sick Pay
Trade unions
Unfair dismissal
Zero hours contracts
