New Employment Rights Bill: How Will It Change Your Work Life?
A major shake-up of UK workers’ rights is imminent, but the once-in-a-generation Employment Rights Bill is still being engineered and it is unclear how exactly the Act will work in practice.
The all-new Labour Government, who have promised significant change in Britian since they won the UK General Election by a landslide back in July, have put forth a comprehensive Employment Rights Bill. Once implemented, it will likely be regarded as the biggest upgrade in employments rights for this generation. It will support the Government’s mission to increase productivity and secure long-term sustainable, inclusive and secure economic growth. That said, some businesses, particularly small and medium-sized enterprises (SMEs), have expressed concerns that the new legislation will be a burden on small businesses. This article will highlight some of the most predominant changes.
Zero-Hour Contracts
Through the Employment Rights Bill, the Government will be fulfilling their pledge to end exploitative zero-hour contracts. Although workers will still have the option to be employed on zero-hour contracts if they so wish, the Government will introduce the right to guaranteed hours reflecting the hours qualifying workers have worked during a reference period, which is anticipated to be 12 weeks. This is because the Government recognises that workers face immense insecurity when they do not have set contractual hours, making it difficult to apply for credit or a mortgage, as well as day-to-day expenses. This must be differentiated from agency workers who, critically, can choose not to take up the offer of an assignment if it does not fit in with the worker’s needs. Agency workers have a different employment model because they have an employment contract with the agency but are hired out to an employer, thus it is much harder to identify their employment rights and who is responsible for fulfilling them. As the Bill so far only affects zero-hour contracts, the Government is currently seeking consultations on how the Bill should apply to agency workers.
Unfair Dismissal
Unfair dismissal rights were first introduced half a century ago, and in that time, the qualifying period for claiming unfair dismissal in the workplace has fluctuated between six months and two years, but has been set at two years since 2012. Under new reforms, workers will qualify for protection against unfair dismissal as a day-one right, meaning more than 9 million people will be better off. Naturally though, adjusting to the removal of the qualifying period is likely to be disruptive for employers who will have to readjust elements of their employment contracts such as the probationary period and individual dispute resolution clauses in order to reflect this. Whilst many fear that assessing an employee’s performance will become more challenging, some employers have expressed that it would encourage them to improve their methods in managing employee performance, as well as enhancing the support they provide for the health and wellbeing of their employees.
Sick Pay
The Government has also committed to strengthening Statutory Sick Pay (SSP) by removing the existing requirements to serve three consecutive sickness absences before SSP kicks in. Employees can often feel forced to go into work when they are feeling unwell to avoid missing out on their earnings. For an employee to be eligible to receive SSP, they must earn at least the Lower Earnings Limit which is currently set at £123 per week. This means that up to 1.3 million employees across the UK are not entitled to SSP. In response to this, the Bill will repeal this exclusion on lower-paid workers to ensure everyone is entitled to SSP. Understandably though, it would be unfair for employees to be paid more in sick pay than they do in their normal earnings. The Government has invited consultations with employers and trade-unions to establish the fairest way to establish financial security for employees as well as retaining the incentive to return to work for businesses. The intention is for lower-paid employees to be entitled to a percentage of their weekly average earnings which will be defined in legislation.
Flexible Working
There will also be a minute but crucial alteration to the present flexible working rules. The right to request flexible working has been classified as a day-one entitlement since April of this year in the Flexible Working (Amendment) Regulations 2023; however, the Bill specifies that the flexible working should be the ‘default’ position from the first day of employment. Although this does not compel employers to allow for hybrid or remote-working, for example, employers must only refuse on certain grounds. The specified grounds are similar to the existing grounds for refusing a flexible working request, such as the employer would bear the burden of additional costs, the request would have a detrimental effect on the business’ ability to meet customer demand or that it would have a detrimental impact on quality or employee performance. Employers will have to explain to the employee in writing as to the ground(s) for refusing their application. In preparation for this change, employers are encouraged to carry out a company-wide audit to identify the possibility of flexibility in the workplace as well as certain barriers to flexible working requests in particular roles.
Family-Related Provisions
Along with flexible working practices, the Bill also proposes to extend bereavement leave to a wider group of employees by adapting the current Statutory Parental Bereavement Leave Regime. At present, it is only available to parents who lose a child under the age of 18 or experience stillbirth; however, the Bill looks to broaden the eligibility to cover a wider group that will be specified in secondary legislation. Furthermore, the Bill will make eligibility for paternity leave a day-one right as opposed to the existing law that requires employees to have completed 26 weeks of continuous service. This grants fathers, or the mother’s partner, the flexibility to take time off to support their family following the birth or adoption of a child. The same also applies to parental leave which will also become a day-one right, allowing employees immediate access to up to 18 weeks’ unpaid leave per child up to the child’s 18th birthday, which at present, requires the employee to have completed one year of continuous service.
Repealing the Trade Union Act 2016
The repeal of the majority of the Trade Union Act 2016 is thought to be the cornerstone of the Employment Rights Bill. The Bill intends on removing much of the ‘red tape’ on trade union activity. Under current law, at least 50% of trade union members must participate in a ballot for subsequent industrial action to be legal; however, the new Bill will remove such a requirement. Furthermore, the requirement that the proposed industrial action must receive 40% support amongst its members in vital public services, such as healthcare, education and transport will also be scrapped. The idea behind this is that legislation relating to strike action should not be imposed to prevent strikes as the tighter grip on restricting employees’ ability to strike over the years has meant that grievances against the employer that are the underlying motivations of striking in the first place are never truly addressed. It would also mean that the notice periods for notifying employers of planned strikes are reduced, meaning employers have less time to make alternative arrangements during strike action.
Repealing the Strikes Act
The Strikes Act, originally introduced to mitigate industrial actions effect on critical sectors such as healthcare, education and transport, allowed employers to mandate a minimum service level during strikes. The total abolition of this will likely lead to an increase in industrial action across the public sector. Erica Aldridge, the legal director of Kennedys suggested that ‘employers with heavily unionised workforces may therefore wish to now start reviewing the contingency plan they have in place to deal with industrial action’. However, Rachel Stuff, a senior employee relations advisor for the Chartered Institute of Personnel and Development (CIPD), has stated that the professional body supports the repeal of the Strikes Act as it did not enhance employment relations and undermined the trust between trade unions and employers.
The Future
Looking to the future, the new workplace rights look promising as they attempt to put an end to unfair employment practices and help deliver economic growth by replacing dated employment laws and help boost pay with more fitting legislation for the modern economy. The Bill was formally introduced into the House of Commons on 10th October 2024, and it is unlikely that consultations relating to this raft of reforms will not be held sooner than 2025. With that being said, consultations relating to agency workers who are on zero-hour contracts, as well as amendments top Statutory Sick Pay (SSP) will likely take place by the end of the year. The majority of reforms will not take effect any earlier than 2026 to ensure all businesses have ample opportunity to prepare for the implementation of these reforms. Further guidance will be provided by the Government once the Bill has been granted Royal Assent.
This article was written by Phoebe-Jean Grainger-Williams, you can contact Phoebe-Jean via the following email: [email protected]