Employment Rights Bill: Shifting to a “Pro-Business and Pro-Worker” Landscape
The new Employment Rights Bill introduced today (10 Oct) highlights a strong shift to not just grow businesses, but also protect employees. As reported in the press release today, one in five businesses with more than 10 employees struggle with staff shortages. Hence, offering more flexibility and better protection to retain and attract more talent is the need of the hour.
We explore what the new employment rights bill seeks to achieve, and some key changes to look out for. In addition, we look at what the Government has planned for the next phase of its strategy.
The Need for a Long-Term Plan for Economic Growth: Employment Rights Bill
Upon coming into power, the Labour Party highlighted how the Conservative’s rule had changed the UK workforce. Their manifesto points out that the Tory government has not been able to deal with the issues they faced and failed to update employment protections as well. Therefore, Labour pledged to come up with a better long-term plan.
The New Deal for Working People manifesto elaborated on how Labour wants to ensure more people stay in work. They also aim to ensure UK employees have ample family-friendly policies that can improve their way of life as well. With the new Employment Rights Bill published today, the effort by Labour to improve pay, productivity and security for workers shows.
The Employment Rights Bill is ‘Fit for a Modern Economy’
This bill is considered the first phase of delivering Labour’s Make Work Pay plan. The press release states bringing forward 28 individual reforms, pertaining to employment, pay and other matters related to employment.
Highlighting the changing technologies and Labour market frameworks, Deputy Prime Minister Angela Rayner calls this the “biggest upgrade to rights at work”. She also states that these new laws are “fit for a modern economy”.
She further adds, “The UK’s out-of-date employment laws are holding our country back and failing business and workers alike. Our plans to make work pay will deliver security in work…”. As a refresher, let’s look at some of the key changes being proposed.
Empowering Employees with Day One Rights
One of the most anticipated and talked about reforms is the removal of the two-year qualifying period for unfair dismissal. The bill aims to offer more protection to UK employees, and they plan on doing so by offering day-one protection.
The press release states that the government is putting measures in place to ensure higher job security for all employees. The Employment Rights Bill will not only include unfair dismissal as a day one right but is likely to include paternity leave, and unpaid parental leave as well.
However, not forgetting about the confusion around probationary periods, the government has confirmed the introduction of a new statutory probation period. These periods will allow employers to assess new hires, allowing fair dismissal, while providing employees protection against “unfair” dismissal. Consultations to discuss the length of the period are yet to take place. However, the government suggests nine months.
A reform like this would be monumental and has been well-received by many. Business Secretary Jonathan Reynolds says that the best employers know if their staff is happy. He adds, “It’s vital to give employers the flexibility they need to grow whilst ending unscrupulous and unfair practices”.
Policies to Ensure Greater Job Security
Ending one-sided flexibility is a priority for Labour and they intend to do that by proposing a ban on exploitative zero-hour contracts. Today’s press release highlights that a majority of zero-hour workers prefer guaranteed hours as they offer more security of earnings. Hence, labour proposes the ability of zero-hour or “low hours” workers to shift to contracts that reflect their real hours, should they work more.
While this has been proposed to offer baseline security, Labour has recognised that zero-hour contracts are beneficial for many. Hence, those on zero-hour contracts are free to remain in that type of arrangement if it suits them better. However, under the Employment Rights Bill, individuals working more hours will have the option to have their working hours reviewed, and contracts adjusted accordingly.
Abolishing Fire and Rehire practices are also a core aspect of Labour’s plan. While they acknowledge that businesses need to be able to restructure, they aim to remove any practices that leave employees at the mercy of their employers.
Employment Rights Minister Justin Madders points out that employment law rights have failed to keep up with the changing economy. These reforms would “right these wrongs” and “kick start economic growth”.
Increased Support for Working Families
One of the biggest challenges being faced by the British workforce is the lack of adequate support as a working parent. Hence, Labour proposes to make flexible working the default working model, wherever possible. In addition to these, the Bill also proposes to establish rights to bereavement and strengthen statutory sick pay.
Apart from strengthening policies, the Employment Rights Bill will also enable the establishment of a Fair Work Agency. This agency will bring together different enforcement bodies so that employees have one resource for information. This body will also uphold worker’s rights and support the employers who comply with the changes.
To tackle the issue of pay inequality, the Employment Rights Bill will make it a requirement for large employers to produce action plans to tackle pay gaps. Labour also plans on improving support for pregnant employees as well as disabled people with health conditions.
Reforms Beyond the Bill: What Does Labour Have in Store?
While the Labour Party has addressed a lot of what they had planned in their manifesto, there are some missing aspects. However, they have mentioned in a newly published document, the next set of commitments in their strategy that are not necessarily a part of the Employment Law Bill. These commitments will be strengthened using existing powers and routes, and include:
- Tightening the ban on unpaid internships
- Taking forward the Right to Switch Off
- Using the Fair Payment Code to tackle the problem of late payments to small businesses
Labour also wants to expand the Equality (Race and Disability) Bill to enforce measures that will further protect workers. These measures include making ethnicity and disability pay gap reporting mandatory for employers with more than 250 staff. The bill also will ensure employers cannot outsource services to avoid equal pay.
While the above are commitments that can be set in motion now, there are many potential reforms on the horizon. Such as
- Implementing paid carers leave: This will be reviewed to ensure it is beneficial to both workers and businesses, especially small business owners.
- Worker Status: The government will consult on this to ensure there is one framework that clearly differentiates workers from self-employed individuals.
- TUPE: A launch of evidence will likely be raised to assess TUPE regulations and how they are implemented in practice
- Collective Grievances: Labour to consult with ACAS on how employees can raise grievances collectively about workplace conduct.
More updates to follow as the consultations progress